The CEO of French hotel group Accor, which has hotels in 5,300 desintations around the world including via chains such as Mercure, Sofitel, Novotel and Ibis, has called on hotels to increase their prices.
Sébastien Bazin said during a shareholders’ meeting on May 20 that hotel managers should up the prices of rooms to “regain financial viability and adapt to operating costs”.
The hotel industry faced a difficult two years during the Covid pandemic and is still in recovery mode.
On top of this, operating costs have risen significantly recently. Inflation in France was up 4.8% annually in April. Energy bills and building materials (for hotel maintenance) are also up, a consequence of Russia’s invasion of Ukraine in February.
And following pressure from unions and in order to attract new staff following the pandemic, salaries of hotel workers are set to increase by an average by 16.3%.
One quarter of hotels surveyed in a recent report by the French association representing hospitality businesses, Groupe national des indépendants de l’hôtellerie et de la restauration(GNI), have already increased their prices, Ouest-France reported.
A further 45% of hotel managers surveyed have said they will increase their prices.
Another post-Covid effect has been the return of business trips and conferences, which is pushing up demand for rooms.
Céline Bardin, head of ODT Travel that specialises in business trips, told Ouest-France that it is becoming harder to find rooms for clients in medium-range hotels in big French cities for under €100 per night.
She said that because of work-related trips, rooms are “sometimes cheaper on the weekend than during the week”.
Mark Watkins, head of Coach Omnium, a company that provides financial and marketing advice to hotels, said that the price of a room in Paris has doubled or even tripled recently.
He said, though, that hotels that push prices up too much could face consequences if guests give bad ratings on review sites, such as Tripadvisor.
He said that in a study carried out by the company, 76% of guests they spoke to said that they felt “hotel prices were too high for what they were worth”.
Most guests only stay in hotels for a couple of days at most, with the average stay being 1.8 days, according to Coach Omnium.
“For stays longer than two days, customers are turning to Airbnb-type offers," Mr Watkins said.