Fear of Islamist attacks kept foreign tourists away from Paris and the Riviera last year, costing French hoteliers an estimated 650 million euros (NZ$978 million) in lost revenue, the head of hotel research firm MKG told Reuters.
Activity picked up slightly in the last quarter as hotels, notably in Paris, slashed prices during the year-end festivities and a stronger US dollar brought back US tourists.
Trade fairs such as Le Bourget air show, held every other year and next due in June, should help hotel room demand this year through a wait-and-see approach before the spring presidential elections could weigh on business.
"2017 can only be better than 2016 though we are unlikely to return to 2014's levels," MKG's Georges Panayotis said.
More than 230 people have been killed in militant attacks in France over the past two years, including 86 during last year's July 14 national holiday celebrations in the Riviera resort of Nice.
Revenue per available hotel room (RevPAR) plunged 14.6 percent in Paris in 2016 compared to 2015 and 2.8 percent in the French Riviera - but rose 4.4 percent elsewhere in the country, according to MKG data.
Overall RevPAR fell 5.1 percent on average in France last year to 56.30 euros, with occupancy rates down by 1.2 percentage points to 64.2 percent and average prices down 3.3 percent.
By comparison, average RevPAR was 59 euros in 2014 in France.
During the December 29-31 period, hotels in Paris alone cut prices by 7-8 percent on average and by as much as 15 percent in some luxury hotels.
France, which is seeking to revive its economy, depends heavily on tourism, which generates between 7-8 percent of national gross domestic product.
France is the most-visited country in the world, with almost 85 million foreigners last year.