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Hotels: activity returning to normal and models set to change


While hope returned to the whole sector in late September 2021, the December fifth wave heralding in the Omicron variant curbed a recovery that was well underway. A quick tour of the hotel market and a few shared convictions about the future of the industry.

In terms of activity in France, provincial regions, supported by national and local customers, particularly in the leisure sector, managed to limit the damage since the outbreak of Covid by posting two reasonable summer seasons given the circumstances. Meanwhile, major conurbations, particularly Paris, were hit hard by the absence of international customers, especially in the long-haul, business and event segments impacted by the cancellation of trade fairs and widespread rollout of teleworking. Each time restrictions were lifted, customers lost no time in returning, prompting talk of “revenge travel”.

Mixed performances in Europe

Accordingly, France ended 2021 with revenues down 43% versus 2019 (down 61% in 2020). However, the recovery was clearly felt over the final months of 2021 and there is no doubt it will continue in 2022.

Regardless of the economic aid provided by different countries to prop up their tourism sectors, France has come out well compared to its European neighbours. While southern countries like Spain and Greece had a good summer, the situation elsewhere varied depending on the specific traits of each country. The UK managed to save the day by maintaining average prices (and devaluing its currency), whereas Germany was penalised by its dependence on trade fairs and business travel.

In my opinion, the mobility crisis we have been through will not undermine the robust foundations of the hotel industry over the medium and long term. However, we can expect to see a few tweaks and changes to the business model applied to the previous cycle.
Besides purely performance-based considerations, resilience and transformation are set to become permanent additions to the key value creation pillars underpinning the hotel industry.

Towards a hybrid, flexible offering

At a time when consumers are increasingly seeking to infuse meaning into their consumption of tourist industry goods and services, hotel operators are increasingly encouraged to add more content to their value propositions.

Guests will have many opportunities for consumption during a single stay. The historical divide between business and leisure behaviour is now obsolete! At the same hotel, you must be able to propose a hybrid offering involving more flexible use of space. Guests must be able to have fun, socialise, eat a meal, grab a bite, have a glass, rest, relax, work, talk and meet people….as well as sleep! The hotel will certainly be one of the epicentres of third places in the future city centre. This is one of the exciting opportunities that tomorrow holds in store.

Human and green transition

Against a backdrop of rising service production costs (payroll, energy prices, etc.), operational leverage is an absolute must. Creating value from operating assets depends on matching the product to its market, as well as on the capacity of the operator and its teams to deliver the service. Therefore, the story told by each establishment or brand will play a key role over the coming years.

Just as we need to restore meaning to the customer, we also owe this to our employees in the field, who carry the service promise on a daily basis and are essential cogs in the value creation machine. They are the ones who will drive the transformation of our sector over the next decade, starting with productivity gains and green transition.

Read more: Assessment of the hotel industry in 2021: The French hotel industry still marked by the crisis in 2021, positive signals can be seen at the end of the year | Hospitality ON (