Covid-19: the descent into hell continues for the hotel industry

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The second confinement turns out to be a brutal shock for the French hotel industry. While activities were slowly starting back in September, the recent turn of the health situation led to the closure of important strongholds of the French luxury hotel industry.


At the beginning of November 2020, it is in Paris that the second wave of the Covid-19 pandemic is being felt the most. When the establishment had relaunched its activities on August 24, the Hôtel de Crillon, for example, announced its closure until December 1. The Shangri-La, which was supposed to reopen on the same date, will remain “closed until further notice.” The Peninsula and the Royal Monceau have not even reopened their doors, which have remained closed since mid-March. Unique vestiges of the hotel’s economic dynamism, five of the Royal Monceau’s private apartments are still on the market today.



Representing a final defeat for the Parisian hotel industry, the Paris Inn group – whose four and five stars establishments are mainly located in the capital – has closed all of its park, that is to say around thirty hotels. For its president, Jean-Bernard Falco, it is a “disaster”. This observation can nevertheless be qualified by the remaining existence of the activities of the Ritz, the Four Seasons George V, the Meurice, the Plaza Athénée or even the Bristol. However, the confinement is accompanied for these establishments by the closure of their swimming pools, spas, shops, as well as their bars and restaurants which constitute an essential part of their revenues. In-room catering services are therefore now offered to the rare customers of this period.



Facing this alarming situation, some representatives of the luxury hotel sector took the floor. The general manager of the French section of the BWH Hotel Group, Olivier Cohn, thus noted the closure of “75 hotels for a fleet of 300 units” on November 2, 2020. That said, the manager specified that ” there shouldn’t be too many additional closings this week. The hoteliers are watching what happens to make up their minds.” The boss of the Western Europe section of the B & B Hotels group, Vincent Quandalle, also confirms that “the week will bring some light on the maintenance of activity.” Although the B & B located near Disneyland Paris has ceased its activities, the situation “is not yet very clear” for the rest of the group’s establishments. The president of the GNI employers’ group, Didier Chenet, explains that “there is great uncertainty about the activity beyond this month of confinement. And the government’s policy of small steps ends up annoying. Facing such a situation, many hoteliers prefer to close.” According to an internal survey by UMIH, the main employers’ organization, one out of two professionals intend to close their establishment in November due to the lack of clients.



The president of the upscale hotel sector of Umih and general manager of the InterContinental hotel on the Opera place, Christophe Laure, gave us a few figures to conclude about this difficult period for the hotel sector : “This second confinement is a blow made to the head for the upscale and luxury hotels in Paris. We really thought that the activity would resume, even slightly, at the start of the school year. However, September-October were not very favorable. At the end of September, the unit revenue per available room was down by 70%. With the second confinement, we will be between -75 and -80% at the end of the year, especially since it could be prolonged.”



In addition, Christophe Laure told us his concern about the consequences of the pandemic on employment in the sector. Indeed, the 31 hotels benefiting from the “Palace” label, of which 12 are located in Paris, alone represent 10,000 employees. Anticipating a job protection plan for the year 2021, the director does not consider any improvement before spring, nor group reservations before September 2021. In view of these alarming prospects, Christophe Laure recalls that “the State’s support is fundamental.”





Featured photo: © Le Meurice[/vc_column_text][/vc_column][/vc_row]


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Thanks to its extensive knowledge of these sectors, the Luxus + editorial team deciphers for its readers the main economic and technological stakes in fashion, watchmaking, jewelry, gastronomy, perfumes and cosmetics, hotels, and prestigious real estate.

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