How France’s mountain hotel industry is exploring new routes

Previously the preserve of local families, the hotel industry across the region is undergoing a transformation as properties change hands or owners decide to renovate.

In recent years, institutional investors and French investment funds such as Algonquin or Sofival have built a presence in the sector. Now, it’s continuing to attract non-specialist investors looking to consolidate or diversify their portfolios.

“Until recently, the mountain hotel market fitted a similar profile to that of the urban hotel industry in France in the 1980s and ‘90s,” says Gwenola Donet, director of JLL’s Hotels & Hospitality business in France. “We’re now seeing consolidation in the hotel sector to optimise revenues and better manage costs.”

Established brands such as Club Med and Pierre & Vacances have long seen the potential of the French mountain hotel market with several establishments across a range of ski resorts and a strong winter sports consumer base. Club Med, for example, recently opened a new property in Les Arcs; with 433 rooms, it shows how it’s possible to provide high-end facilities and a wide range of services on a large scale. This can both optimise costs and offer a complete experience for the consumer, says Donet.

Several hotel groups are also following the same strategy, such as Belambra, which recently opened a 250-room club in the Avoriaz valley.

“Operators see the mountain as a market for the future,” says Donet. “By opening clubs of a significant size, they believe there will be ongoing demand for accommodation in the Alps.”

Industry forecasts support their position. According to figures from Domaines Skiables de France, the Haute-Savoie region registered a 3 percent rise in visitors compared to the previous four winters, with growing numbers of winter holidaymakers coming from beyond Europe.

“In addition to Europeans, we’re seeing more Chinese tourists holidaying in the Alps – even a small increase in their numbers represents an interesting source of growth,” says Donet. “It’s partly due to the fact that the development and expansion of skiing in China is being driven by alpine initiatives such as the China Ski Academy, a partnership signed in 2012 between Club Med and the French national ski school.

“Both the nature and the volume of demand for France’s Alpine resorts is rapidly changing,” she adds.

Marketing efforts reflect this changing consumer base. “Hoteliers are now trying to attract people to the mountain outside the peak skiing time of January to March. They’re promoting Christmas offers to encourage people to spend their holidays skiing or during the spring when the snow starts to melt, they’re offering additional activities such as hiking or spa days,” says Donet.

Non-skiers are also being catered for far more than in previous years. “The percentage of non-skiing days increased among visitors increased from 9 percent to 15 percent between 2007 and 2017,” says Donet.

“The mountain is no longer reserved for winter sports enthusiasts but it’s also a place where people come to recharge their batteries and disconnect from everyday life, reflecting a much wider demand in line with trends in the wider industry such as getting back to nature, authenticity and spending time with friends and family.”

For hotels that have kept pace with modern traveller preferences, the mountain environment has become a good place to be. According to JLL, it takes luxury mountain hotels 130-140 days to achieve a similar turnover as it does for those in the same price bracket in Marseille or Lyon – or for the ultra high-end, Paris – over a full year.

“It comes down to the limited number of mountain hotels and their proximity to popular winter sports areas that enables operators to charge high prices while maintaining good occupancy rates,” says Donet. “Some hotels are even rethinking traditional Saturday to Saturday booking patterns and accommodating more flexible stays of a few days at a higher rate to maximise their revenue per available room (RevPAR).”

However, mountain holidays are no longer just for affluent visitors, with the industry moving to accommodate those with less disposable income. The group, France Hostel, for example has opened a new property in Les Deux Alpes which aims to offer attractive design and high-quality customer service and good catering at an affordable price.

Other brands are also looking to both enter and breathe new life into the market with Hyatt Centric in La Rosière unveiling the first hotel in a European ski resort for the luxury American chain, while the well-known aprés-ski bar La Folie Douce is taking over the former Club Med Chamonix in partnership with a new brand Les Hotels Très Particuliers, marking its debut in the hotel industry.

And as the variety and style of accommodation evolves, coupled with the growing number of international visitors, the investment potential of the area will increase, Donet believes.

“In the future, we expect a growing interest from investors already in the space and probably the arrival of foreign capital,” she explains. “Resorts in the French Alps are of a high quality but there are also high barriers to entry due to the limited availability of land and the difficulty in simply creating additional new resorts.”