Riding the momentum of 2025, the first quarter of 2026 reaffirms the structural health of the French hospitality industry, with the continuation of a dynamic that has clearly split in two directions: the upscale segment and the Île-de-France region (Paris included) are driving performance upward in value terms, while the budget end of the market remains under pressure. The resilience of leisure demand has helped offset — for now — the ripple effects of the Iranian conflict.
Hospitality’s Proven Ability to Absorb Shocks
Among all economic sectors, hospitality continues to demonstrate its capacity to weather disruption, provided shocks are neither structural nor prolonged. As the Iran–US conflict caught the world off guard in early March, average daily rates held their upward trajectory (+1.4% to +3.0% depending on the segment), reflecting a market carefully balancing occupancy and pricing in an uncertain economic environment. The two-year comparison — which neutralizes the distortions created by major 2024 events — confirms that fundamentals remain broadly solid, with the notable exception of the budget segment and certain peripheral markets.
March 2026: Moderate Growth, Led by the Upscale Segment
March 2026 underscores the resilience of the French hotel sector, with overall occupancy up +1.7 percentage points year-on-year. Performance on the rate side was equally encouraging, with overall ADR up +1.4% versus the prior year, driving RevPAR growth of +4.3% over the same period.
The upscale segment continued to lead the way, posting RevPAR growth of +4.1% YoY, while the midscale segment stood out with the strongest occupancy gains and a remarkable RevPAR increase of +5.0% YoY — a performance reflecting sustained demand from both corporate travelers and domestic leisure guests.
The economy segment has stabilized and is beginning to regain traction, while the budget segment is buckling under pressure — the only segment to record a RevPAR decline, down -7.5% versus N-2 and still -0.8% versus the prior year.
Q1 2026: Overall Positive, Buoyed by an Accelerating Upscale Segment
Across the full first quarter of 2026, the French hotel market delivered a broadly positive performance, with RevPAR up +3.5% versus the prior year.
Upscale is pulling further ahead, posting the strongest performance in both absolute and relative terms. The two-year comparison is even more telling: +9.1%, reflecting a sustained recovery in both rate…
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