By Dominique Vidalon
PARIS (Reuters) - French hotels are headed for lasting tough times as foreign tourists stay away from France after Islamist militant attacks and traditional hoteliers are increasingly challenged by the likes of Airbnb, research firm KPMG said on Tuesday.
Stephane Botz, KPMG partner for real estate and hotels, told a news conference that French hotels could suffer a revenue drop of around 10 percent on average this year, mirroring a 10 percent fall in visits by foreign tourists, notably from Asia and the United States.
"There should be difficulties for at least 18 more months. For 2017, there will be either a stagnation or a slight decline in hotel revenue," he said.
"A lasting and more structural phenomenon are alternative offerings such as Airbnb," he added.
Paris is online home-sharing group Airbnb's biggest market.
Air France (PA:AIRF) forecast a further fall in bookings in the coming months after reservations fell 5 pct in the June to August period, partly as a result of the attacks..
Foreign tourists have shunned France since Islamic State gunmen killed 130 people in an attack in Paris last November. On July 14, a gunman drove a truck into crowds celebrating Bastille Day in the Riviera city of Nice, killing 86.
Last week, the French government pledged more aid to help the country's struggling tourism sector cope, bringing to 10 million euros its contribution to a campaign to promote the country abroad.
The impact of the attacks on tourism revenue in key regions such as the Ile de France and the Riviera could spread to the whole industry from mid-2016 and 2017, with an impact on investment and transaction volumes in France, Botz also warned.
Hotel investment in France was 2.2 billion euros in 2015, down from 2.8 billion in 2014 while it jumped 58 percent to 22.2 billion in Europe, driven by Britain and Germany, KPMG said.
"While the attacks do not seem to have curbed hotel transactions (in 2015 in France), they have had a negative impact on hotel performance and value," the report said.