Europe -  Paris, France

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 recent ‘yellow vests’ (gilets jaunes) movement. The EIU forecasts GDP growth to pick up to around 1.5% for the foreseeable future. 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. The capital of France returned to the ‘top five’ in this year’s HVI index.

The recovery from some slower years following the terrorist attacks, an increased perception of security and a strong momentum in arrivals and overnights, resulted in a spectacular growth in hotel performance for Paris with a 12% RevPAR growth in 2018. 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 and the Hotel Lutetia in 2018.

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. Large-scale events were organised in the capital, including Maison & Objet (100,000 attendees), the ERS International Congress, the Ryder Cup, Fashion Week, the SIAL (150,000 visitors) and the Mondial Paris Motor Show. RevPAR levels dropped in December due to the disruption caused by the gilets jaunes movement in the capital, which forced the closure of several businesses and tourist attractions. The Paris hotel market suffered, driven by a decrease in visitors from the USA and Asia, who are particularly sensitive to safety concerns. This trend is expected to continue in the first months of 2019.

In 2018, hotel openings included the 128-room Hotel Lutetia; the 54-room Fauchon, known worldwide for its high-end food stores; the 76-room Hôtel de Berri, a Luxury Collection Hotel; the first Motel One in Porte Dorée; and the 25hours Hotel in Gare du Nord. In terms of 2019, the Hotel du Louvre is expected to come back to the market under a Hyatt brand in the first half of the year, and the AccorHotels-branded JO&JOE Paris-Gentilly is expected to open in April with 240 rooms.

Furthermore, the 149-room Kimpton hotel (IHG) is scheduled to open in early 2020 in a converted office building on boulevard des Capucines and rue Daunou. Other projects over the next three years include various re-openings: the 79-room Le Lotti (early 2020), the Cheval Blanc in the former Samaritaine department store (early 2020), a 76-room Bulgari Paris (H2 2020) and a 200-room SO Sofitel Paris on the Champs-Élysées (early 2022).

The market remains a favourite of investors and no uncertainty seems to have been factored into acquisitions. Paris is still one of the most attractive markets in Europe and, once again, has the highest price per room in our index. The general resilience and strong fundamentals of the Paris market has led us to consider that a continued improvement in performance can be expected in 2019 despite a lower number of large events planned compared to 2018, thanks to an improved economic environment and a return to status quo following the terrorist attacks. We highlight that France has recently been awarded the 2019 FIFA Women’s World Cup, the 2023 Rugby World Cup and the 2024 Olympic Games.

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%

Paris RevPAR Change (€Euro)

Paris RevPAR (€Euro)

For more information, please contact:

Sophie Perret, MRICS, MBA
[email protected]
  • +44 20 7878 7722 (w)
Magali Castells
[email protected]
  • +44 20 7878-7710 (w)
  • +44 7 850205149 (m)