Europe -  Paris

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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 hotel investment in Europe for more than a decade.

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 Hotel de Crillon (2017), the Hotel Lutetia (2018), the Hotel du Louvre (2019), the Cheval Blanc (2021), the Bulgari Paris (2021) and Madame Reve (2021).

The city recorded a steep decline in hotel performance in 2020 and 2021 compared to 2019, on account of the COVID-19 pandemic. However, the Paris hotel market proved to be quite resilient compared to other gateway markets in Europe, particularly in 2021 when RevPAR levels reached 80% of the 2019 RevPAR performance towards the end of the year.

Large-scale events are traditionally 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. Several events postponed in 2020 are expected to take place again from March 2022. The Rugby World Cup in 2023 and the Olympic Games in 2024, both to be hosted in Paris, should further boost the appeal of the city for these years.

The current hotel pipeline in Paris includes 23 projects, totalling approximatively 3,600 rooms with approximatively 50% of these rooms expected to materialise in 2022. The most anticipated projects in 2022 include the opening of the first SO/ brand hotel (Accor) in July as part of the Morland Mixite Capital mixed-used development and the 139-room Tours Duo MGallery (Accor) hosted from the 17th to the 27th floors of the newly built third-highest complex in Paris after the Eiffel and the Montparnasse towers, expected to open from Spring 2022. Other projects include the opening of the luxury 163-room 1 Hotel in 2023, the 150-room Canopy by Hilton Quartier Latin in 2023, and the 101-room Sofitel Paris Champs Élysées in 2024.

Paris 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. Recent transactions include four Parisian properties sold by JJW Hotels & Resorts to Groupe Bertrand in June 2021 for an estimated €105 million or €530,000 per room, the 253-room Timhotel Berthier bought for renovation by Swiss Life AM in July 2021 for a reported €73 million or €289,000 per room, and the forward sale of the 139-room Livelyfhere Gambetta Paris in August 2021 for an estimated €52 million or €376,000 per room. Overall, hotel values increased by 6.8% in 2021 compared to 2020 and compares favourably with the European average increase of 5.0%.

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: More than -10%

For more information, please contact:

Sophie Perret, MRICS, MBA

[email protected]
  • +44 20 7878 7722 (w)
Nikola Miljković

[email protected]
  • +44 20 7878-7724 (w)
  • +44 7 593572865 (m)
Mathilde De Bona

[email protected]