Paris Hotels Back on Track After Rocky Start in 2019

According to global hotel consultancy HVS, hotels in Paris have seen a recovery in Q2 2019 following a rocky start to the year.

In 2018 hotels in the city saw a 10.6% increase in RevPAR [rooms revenue per available room] year-on-year, but visitor numbers took a knock at the end of the year and the start of 2019 with the unrest caused by the 'gilets jaunes' movement. Visitation and bed nights from the Middle East, Asia and South America decreased in the first quarter of 2019 leading to fairly flat RevPAR growth in the year to date.

However, recent months have seen some recovery in Paris, in part due to visitors coming into the city for the Women's Football World Cup and the Paris Air Show as well as the return to relative calm.

"Paris has an exceptionally well-balanced mix of business and leisure demand which, alongside London, had made it one of the most desirable destinations for hotel investment for over a decade," commented report co-author Dayk Balyozyan, senior associate, HVS London.

"While the unrest in Paris prompted visitors to stay away, particularly international guests from outside Europe, this would only ever have been a temporary blip and we are now seeing a recovery in both RevPAR, visitor numbers and average rates," he added.

According to the Market Pulse report Paris has a substantial hotel pipeline, with over 6,800 rooms, 8% of existing supply, coming on stream over the next five years although around half of the new supply will be located outside the city centre. Major openings in the city over the next year include the 72-room luxury Cheval Blanc hotel at the Samaritaine, and the 149-room Kimpton Hotel close to the Opera. Other operators opening new properties include Hyatt, Marriott, Hilton and Accor.

"The on-going popularity of Paris means that the influx of new rooms is unlikely to have a major impact on hotel performance going forward, although the luxury and five-star properties will feel the most pressure as a third of the new supply falls into this category," said Balyozyan.

"The general resilience and strong fundamentals of the Paris market indicate that a continued improvement in performance can be expected for the rest of 2019, September and October being generally stronger months for the city. The organization of large events such as the 2023 Rugby World Cup and the 2024 Summer Olympic Games will certainly help maintain, and even improve, Paris's strong performance."