Year-on-year profit per room at full-service hotels in Paris dropped by 19 percent this month, as the terrorist attacks, which took place on 13 November, were the root cause of a substantial decline in demand for hotel accommodation, according to the latest data from HotStats.
November is typically a buoyant month of performance for hotels in Paris with occupancy levels in the mid to high 70s and strong achieved average room rates, but this year the events which took place in the French capital triggered a 10.6 percentage point decline in room occupancy, to 64.4 percent from 75.0 percent during the same period in 2014.
A decline in visitor numbers in the wake of the attacks was predictable, as was the cancellation of major conferences and exhibitions as security concerns remained. The impact on visitors to the city is illustrated by the 17.5 percent decline in the number of accommodated leisure room nights recorded in our sample of 37 Parisian hotels, equivalent to a drop of more than 6,000 leisure room nights for the month.
However, the negative impact of the attacks on demand was somewhat offset as the world?s media descended on the city in the aftermath of the events, which, in addition to the shift in demand sources, contributed to a 12.1 percent year-on-year increase in achieved average room rate, to ?321.92. As a result, the RevPAR decline for the month was managed at just -3.8 percent.
Reactive adjustments in costs helped to minimise the impact of the top line decline on profit. However, labour costs were recorded at 49.2 percent of total revenue for the month, against 46.9 percent in November 2014. As a result of the movement in revenue and costs, profit conversion at hotels in Paris declined to 16.7 percent of total revenue this month from 19.5 percent during the same period in 2014.
Profit falls 19pc at Paris hotels
