Europe -  Paris, France

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Paris, the capital of France, enjoys an exceptionally well-balanced mix of business and leisure demand, which allows the City of Lights to have both a broad seasonality and strong average rate. Alongside London, Paris has remained one of the two most desirable destinations for investment for more than a decade.

Since the presidential election in May 2017, the business environment in France has experienced positive change and Emmanuel Macron is well placed to implement plans to enact pro-business reforms, despite the ‘yellow vests’ (gilets jaunes) movement. Despite a very difficult 2016 for Paris, following the two terrorist attacks in 2015 which were further compounded by similar events in Brussels and Nice in 2016, the hotel market slowly recovered in 2017 and continued to do so in 2018 until the ‘yellow vests’ movement started in November 2018. During 2019, the Paris market was mostly affected by the ‘yellow vests’ movement that lasted until September and the country-wide strikes that started in December 2019 against the pension reform.

The Parisian market enjoyed 11 months of impressive growth until November 2018, thanks to the return of international leisure visitors as well as business and meetings visitors.  RevPAR levels dropped in December 2018 due to the disruption caused by the ‘yellow vests’ movement in the capital, which forced the closure of several businesses and tourist attractions.  2019 was a year heavily disturbed by the ‘yellow vests’ movement and the pension reform strikes in December, resulting in a slight decline in hotel performance for Paris with a 1% RevPAR decline in 2019. The Paris hotel market suffered, driven by a decrease in visitors from the USA and Asia, who are particularly sensitive to safety concerns. However, there is still potential for further growth as RevPAR remained slightly below its previous peak in 2014 (nominal terms), in part due to the additional supply in the luxury market, including the Peninsula in 2015, the Ritz in 2016, the Hotel de Crillon in 2017, the Hotel Lutetia in 2018 and the Hotel du Louvre in 2019.

Large-scale events were organised in the capital, including Maison & Objet (100,000 attendees in 2019), the ERS International Congress, the Ryder Cup, Fashion Week, the SIAL (150,000 visitors in 2019) and the Mondial Paris Motor Show. However, due to COVID-19, several events in 2020 have been cancelled or postponed.

In 2020, hotel openings included the 485-bed JO&JOE Paris Gentilly, Accor’s lifestyle hostel brand, the 135-room MGallery Nest Paris La Défense, formerly the Sofitel la Défense, opened after an extensive refurbishment program in October 2020. Several projects have been delayed to 2021 and later owing to the COVID-19 pandemic such as the 72-room Cheval Blanc, located in the former La Samaritaine department store, expected to come to the market during the summer, at the same time as the 149-room Kimpton Paris. The 76 rooms Bulgari Paris (Marriott) is scheduled to open in late 2021.

Other projects over the next couple of years include various openings: the 118-room Hilton Paris Eiffel Tower (H1 2022), the 150-room Canopy by Hilton Paris Quartier Latin (H1 2023), and a 104-room Sofitel Paris on the Champs-Élysées (late 2023).

Despite a strong contraction of the hotel performance of the market owing to the impact of COVID-19 pandemic and subsequent travel restrictions, the market remains a favourite of investors and no uncertainty seems to have been factored into acquisitions, owing to the general resilience and strong fundamentals of the Paris market.

Change In Value For Market: (€Euro)

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

For more information, please contact:

Sophie Perret, MRICS, MBA
[email protected]
  • +44 20 7878 7722 (w)
Nikola Miljković
[email protected]
  • +44 20 7878-7721 (w)
  • +44 7 593572865 (m)