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Preliminary RevPAR data for December 2016 are in line with our scenario and seem to confirm that the market is bottoming out. RevPAR is in low negative territory at -1.4% (vs. November +1.0% and -5.9% in the first ten months of the

year), but we note that COP 21 was held in Paris in December 2015. We believe the French market should be helped by easier comparables in 2017E. Accor (Buy) is the most exposed company to France (c.22% of its total EBIT).

*RevPAR down 1.4% in December 2016

HotelCompSet data shows Preliminary RevPAR in December 2016 down by 1.4% in France, with an occupancy rate of +2.0 pts and ADR of -5.1%. This performance is in line with our scenario of RevPAR being down by low single-digits in December (climate change event COP 21 was held in Paris in the first two weeks of December last year). Nevertheless, this highlights that trends are stabilizing in France, and it follows an encouraging month of November (+1.0%). It also suggests that RevPAR is down 5.1% in FY 2016E in France.

* Regions are robust, Paris improving but still negative

By area, Regions remain robust with RevPAR increasing by 3.6%. Performance in Paris is encouraging with RevPAR down 3.8% (the lowest decline in 2016). Ile-de-France (the Paris’ region) is weak with RevPAR down 10.8%.

* Budget segment is outperforming, upscale improving

By segment, budget hotels show the best performance with RevPAR up 1.3%. Economy and midscale segments are mixed with RevPAR decreasing by 3.0% and 2.1%, respectively. We note the encouraging figure in the upscale segment with RevPAR only slightly down (-0.8% in December vs. -9.1% YTD).

* We rate Accor as Buy with a target price of €41

Accor is the largest operator in France and derives about 22% of its total EBIT from France. We believe that better RevPAR trends in France, helped by easier comparables (with the terrorist attacks occurring in Paris in November 2015), should improve market sentiment. We maintain our Buy rating with a target price of €41 on Accor.