Editorial team · Services, Advice, Chains
InfoWeb Marketplace · Editorial team
Published on 26 September 2022 · 5 min read
Observatory 2021 of Palace Hotels: Commercial and Operating Indicators
InfoWeb Marketplace · Editorial teamPublished on 26 September 2022 · 5 min read
As of 31 August 2022, the Atout France Palace distinction applied to 31 hotels, representing a stock of 3 144 rooms spread across the French Riviera, Paris, the Alps, the South-West, Provence and the Caribbean.
The figures presented are based on the analysis of data collected from a sample of nearly 1 800 rooms, or approximately 60% of the approved Palace stock in 2021 (excluding Courchevel).
A sub-segmentation by market, based on geographical criteria, was carried out in compliance with statistical confidentiality:
- the Paris panel represents nearly 60% of capacity in number of rooms, or approximately 1 100 rooms and suites;
- the Riviera panel accounts for nearly 60% of capacity in number of rooms, or approximately 300 rooms and suites (170 days of opening in 2021 on average);
- the Other regions panel, which does not include hotels located on the Riviera and in Courchevel, comprises approximately 450 rooms and suites (220 days of opening in 2021 on average).
It should be noted that an expansion of the panel, mainly linked to the award of the Palace distinction to 6 new establishments in 2019, partly explains the changes observed in the "Other regions" panel in the same year. Moreover, the growth in the representativeness of the Paris panel in 2022 also creates a panel effect on the commercial performance observed in 2021.
The year 2021 shows mixed levels of recovery, notably linked to opening periods and returns of foreign clientele that varied by panel (Paris, Riviera and Other regions - excluding Courchevel). Establishments also remained constrained by government restrictions that continued until 19 May 2021, significantly affecting activity (up to -60% in food and beverage revenue compared with 2019 for some establishments). It was only from 9 June 2021 that restaurant interiors could reopen. Unfortunately, the full set of government restrictions did not allow the Courchevel Palaces to open for the 2020-2021 winter season.
The overall occupancy rate of French Palace hotels, all regions combined (excluding Courchevel1), rose by 21,1 points between 2020 and 2021, reaching 39,1%. This level nevertheless remains 20 points below 2019 (59,4%). This trend varies by region:
- in Paris, the occupancy rate 2 of Palaces rose by 20,2 points on average between 2020 and 2021, ranging between 25% and 35% for a majority of the establishments in the panel over the full year. This level remains nearly 27 points below that of 2019 (30,4%). Attendance was driven mainly by domestic and European clientele (40% of total overnight stays) but also by the gradual return of long-haul international clientele from the second half of the year, notably from the Middle East and the United States (approximately 50% of foreign overnight stays in 2021 in Parisian Palaces, a level comparable to 2019).
- on the Riviera, the occupancy rate of Palaces rose by 22,5 points on average between 2020 and 2021, with a longer average opening period than in 2020 (170 days), but shorter than in 2019 (220 days). For the whole panel, European clientele accounted for more than 45% of foreign overnight stays, followed by clientele from the United States, which contributed nearly 40% of foreign overnight stays. The situation is nevertheless mixed across the region: establishments in Saint-Tropez continue to benefit from their historic European and domestic clientele, which can account for up to 80% of their foreign overnight stays in 2021.
- the occupancy rate of Palaces in the Other regions panel rose by 15,4 points on average between 2020 and 2021, reaching 61,9%. In 2020, these hotels had benefited from a larger domestic clientele and had maintained an occupancy rate close to 50%. In 2021, domestic clientele remains the majority in the establishments of the Other regions panel (more than 65% of total overnight stays on average) and European overnight stays account for 65% of foreign overnight stays on average, compared with 30% in 2019.
*1 Excluding Courchevel - the Palaces did not reopen for the 2020/2021 winter season.
*2 The occupancy rate of Parisian Palaces is calculated over 365 days.
The average price, all regions combined (excluding Courchevel1), rose by nearly 8% between 2020 and 2021, reaching 1 076 ? excl. VAT. In 2021, the average price of Palaces thus exceeds the level reached in 2019 (+4,5%), with some establishments posting average prices 30% higher than those of 2019. In Paris, the majority of establishments posted average price increases between 2020 and 2021, with an overall rise of 5%, reaching an average price of 1 097 ? excl. VAT. The average price of Parisian Palaces has thus risen to a level +6% higher than the average price of 2019 2. It should be noted, however, that average prices of Parisian Palaces vary widely between establishments (a gap of approximately 900 ? excl. VAT between the minimum and maximum observed). On the Riviera, the average price reaches 1 803 ? excl. VAT in 2021, an increase of approximately 15% between 2020 and 2021, although this varies between establishments. All establishments also show growth in their average price compared with 2019 (17% on average).
Palaces in the Other regions panel show an average price up by approximately 4% between 2020 and 2021 (and +15% compared with 2019), reaching 584 ? excl. VAT. These changes are nevertheless mixed within the panel, with some establishments posting average prices in 2021 lower than those of 2020. Indeed, the establishments in this panel had benefited from the regionalization of tourism in 2020.
2022: a "catch-up effect" from the spring, potentially a record year?
The return of international clientele to France, particularly long-haul, appears to be materializing during the 2022 summer season, contributing to an unprecedented rise in average prices and unprecedented saturation levels for some destinations. Paris, which had suffered more than other regions since 2020, seems to be regaining its appeal among regular clientele who had been unable to come since 2019. In this catch-up context, conducive to sustained occupancy levels combined with very dynamic pricing policies, 2022 is shaping up to be significantly better than 2021, and even than 2019 for some establishments. 2022: a "catch-up effect" from the spring, potentially a record year?
The return of international clientele to France, particularly long-haul, appears to be materializing during the 2022 summer season, contributing to an unprecedented rise in average prices and unprecedented saturation levels for some destinations. Paris, which had suffered more than other regions since 2020, seems to be regaining its appeal among regular clientele who had been unable to come since 2019. In this catch-up context, conducive to sustained occupancy levels combined with very dynamic pricing policies, 2022 is shaping up to be significantly better than 2021, and even than 2019 for some establishments.
(1) Excluding Courchevel – the Palaces did not reopen for the 2020/2021 winter season
(2) The growth in the representativeness of the Paris panel in 2022 also creates a panel effect on the commercial performance observed in 2021 compared with previous years.
We estimate that the revenue generated by French Palaces fell by approximately 30% in 2021 compared with 2019. Parisian Palaces show the largest revenue loss: -40% between 2019 and 2021. Palaces on the Riviera and in the Other regions panel show smaller revenue declines compared with 2019 (approximately -15%), notably affected by shorter opening periods. Indeed, even though the level of GOP reached 23,5% of the total revenue of French Palaces in 2021, up +1 point compared with 2019 - demonstrating good cost management by the establishments despite complex operating conditions - the average GOP loss is estimated at approximately -30% in value compared with 2019.
Excluding Courchevel - the Palaces did not reopen for the 2020/2021 winter season.
Information from the study "The French Hotel Industry in 2022" carried out by KPMG SA
The figures presented are based on the analysis of data collected from a sample of nearly 1 800 rooms, or approximately 60% of the approved Palace stock in 2021 (excluding Courchevel).
A sub-segmentation by market, based on geographical criteria, was carried out in compliance with statistical confidentiality:
- the Paris panel represents nearly 60% of capacity in number of rooms, or approximately 1 100 rooms and suites;
- the Riviera panel accounts for nearly 60% of capacity in number of rooms, or approximately 300 rooms and suites (170 days of opening in 2021 on average);
- the Other regions panel, which does not include hotels located on the Riviera and in Courchevel, comprises approximately 450 rooms and suites (220 days of opening in 2021 on average).
It should be noted that an expansion of the panel, mainly linked to the award of the Palace distinction to 6 new establishments in 2019, partly explains the changes observed in the "Other regions" panel in the same year. Moreover, the growth in the representativeness of the Paris panel in 2022 also creates a panel effect on the commercial performance observed in 2021.
2021: a hotel year still affected by the health crisis but showing the first signs of recovery
The year 2021 shows mixed levels of recovery, notably linked to opening periods and returns of foreign clientele that varied by panel (Paris, Riviera and Other regions - excluding Courchevel). Establishments also remained constrained by government restrictions that continued until 19 May 2021, significantly affecting activity (up to -60% in food and beverage revenue compared with 2019 for some establishments). It was only from 9 June 2021 that restaurant interiors could reopen. Unfortunately, the full set of government restrictions did not allow the Courchevel Palaces to open for the 2020-2021 winter season.
Occupancy rate of French Palace hotels
The overall occupancy rate of French Palace hotels, all regions combined (excluding Courchevel1), rose by 21,1 points between 2020 and 2021, reaching 39,1%. This level nevertheless remains 20 points below 2019 (59,4%). This trend varies by region:
- in Paris, the occupancy rate 2 of Palaces rose by 20,2 points on average between 2020 and 2021, ranging between 25% and 35% for a majority of the establishments in the panel over the full year. This level remains nearly 27 points below that of 2019 (30,4%). Attendance was driven mainly by domestic and European clientele (40% of total overnight stays) but also by the gradual return of long-haul international clientele from the second half of the year, notably from the Middle East and the United States (approximately 50% of foreign overnight stays in 2021 in Parisian Palaces, a level comparable to 2019).
- on the Riviera, the occupancy rate of Palaces rose by 22,5 points on average between 2020 and 2021, with a longer average opening period than in 2020 (170 days), but shorter than in 2019 (220 days). For the whole panel, European clientele accounted for more than 45% of foreign overnight stays, followed by clientele from the United States, which contributed nearly 40% of foreign overnight stays. The situation is nevertheless mixed across the region: establishments in Saint-Tropez continue to benefit from their historic European and domestic clientele, which can account for up to 80% of their foreign overnight stays in 2021.
- the occupancy rate of Palaces in the Other regions panel rose by 15,4 points on average between 2020 and 2021, reaching 61,9%. In 2020, these hotels had benefited from a larger domestic clientele and had maintained an occupancy rate close to 50%. In 2021, domestic clientele remains the majority in the establishments of the Other regions panel (more than 65% of total overnight stays on average) and European overnight stays account for 65% of foreign overnight stays on average, compared with 30% in 2019.
*1 Excluding Courchevel - the Palaces did not reopen for the 2020/2021 winter season.
*2 The occupancy rate of Parisian Palaces is calculated over 365 days.
An increase in the average price of French Palace hotels
The average price, all regions combined (excluding Courchevel1), rose by nearly 8% between 2020 and 2021, reaching 1 076 ? excl. VAT. In 2021, the average price of Palaces thus exceeds the level reached in 2019 (+4,5%), with some establishments posting average prices 30% higher than those of 2019. In Paris, the majority of establishments posted average price increases between 2020 and 2021, with an overall rise of 5%, reaching an average price of 1 097 ? excl. VAT. The average price of Parisian Palaces has thus risen to a level +6% higher than the average price of 2019 2. It should be noted, however, that average prices of Parisian Palaces vary widely between establishments (a gap of approximately 900 ? excl. VAT between the minimum and maximum observed). On the Riviera, the average price reaches 1 803 ? excl. VAT in 2021, an increase of approximately 15% between 2020 and 2021, although this varies between establishments. All establishments also show growth in their average price compared with 2019 (17% on average).
Palaces in the Other regions panel show an average price up by approximately 4% between 2020 and 2021 (and +15% compared with 2019), reaching 584 ? excl. VAT. These changes are nevertheless mixed within the panel, with some establishments posting average prices in 2021 lower than those of 2020. Indeed, the establishments in this panel had benefited from the regionalization of tourism in 2020.
2022: a "catch-up effect" from the spring, potentially a record year?
A return of international clientele to France
The return of international clientele to France, particularly long-haul, appears to be materializing during the 2022 summer season, contributing to an unprecedented rise in average prices and unprecedented saturation levels for some destinations. Paris, which had suffered more than other regions since 2020, seems to be regaining its appeal among regular clientele who had been unable to come since 2019. In this catch-up context, conducive to sustained occupancy levels combined with very dynamic pricing policies, 2022 is shaping up to be significantly better than 2021, and even than 2019 for some establishments. 2022: a "catch-up effect" from the spring, potentially a record year?
The return of international clientele to France, particularly long-haul, appears to be materializing during the 2022 summer season, contributing to an unprecedented rise in average prices and unprecedented saturation levels for some destinations. Paris, which had suffered more than other regions since 2020, seems to be regaining its appeal among regular clientele who had been unable to come since 2019. In this catch-up context, conducive to sustained occupancy levels combined with very dynamic pricing policies, 2022 is shaping up to be significantly better than 2021, and even than 2019 for some establishments.
(1) Excluding Courchevel – the Palaces did not reopen for the 2020/2021 winter season
(2) The growth in the representativeness of the Paris panel in 2022 also creates a panel effect on the commercial performance observed in 2021 compared with previous years.
Operating performance 2021 of Palace hotels in France
We estimate that the revenue generated by French Palaces fell by approximately 30% in 2021 compared with 2019. Parisian Palaces show the largest revenue loss: -40% between 2019 and 2021. Palaces on the Riviera and in the Other regions panel show smaller revenue declines compared with 2019 (approximately -15%), notably affected by shorter opening periods. Indeed, even though the level of GOP reached 23,5% of the total revenue of French Palaces in 2021, up +1 point compared with 2019 - demonstrating good cost management by the establishments despite complex operating conditions - the average GOP loss is estimated at approximately -30% in value compared with 2019.
Excluding Courchevel - the Palaces did not reopen for the 2020/2021 winter season.
Information from the study "The French Hotel Industry in 2022" carried out by KPMG SA
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