Study: The hotel industry is experiencing an unprecedented economic situation

22 January 2021

The health crisis has led to a 14 billion euro deficit in the hotel industry, leaving a red iron mark on the tourism sector.

In the year 2020 in France, a third of hotels had to close their doors due to low occupancy, first due to the closure of airports and then due to the various confinements imposed on a national scale.

The group of analysts MKG Consulting, a specialist in the tourism and hotel industry, announced that the room occupancy rate for the year 2020 was only 32.4% while the average income per available room, the RevPar, fell by 61.3%. Thus, the shortfall for the sector reaches 14 billion euros.

A situation that had not been seen for 30 years, in Ile-de-France, the luxury hotel industry is particularly affected. “Such bad figures have never been seen for more than thirty years“, comments Vanguelis Panayotis, president of the specialized firm.

The RevPar dropped 72.8% in 2020 in the region hosting the French capital, which is explained by the loss of wealthy tourists. Many hotels have not opened since March, luxury hotels have lost three quarters of their turnover and employees are on short-time work, this situation of “survival” is supported by the state.

Indeed, the French government is proposing an aid plan for the hotel sector and for all companies in the tourism sector. This aid plan includes full coverage of partial unemployment for employees, as well as exemption from charges and access to the solidarity fund.

According to Vanguelis Panayotis, “20% of hotels are at risk“. The president of MKG Consulting also adds that “their future is not assured, especially since we do not see a recovery before April“. But it is interesting to note that the French hotel sector was favored during the summer compared to other European countries and this is due to French tourists, the expert analyzes.

Featered photo : © Press

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