Strong support from the French government combined with Paris’ continued global appeal has resulted in a dynamic rebound in the city’s tourism sector post-pandemic, ensuring its lead is maintained as one of the top destinations for hotel investors, according to Paris – A Spectacular Start the recovery, our latest Market Pulse.
Compared to other gateway markets, the city has seen a solid increase in demand from June 2021, supported by the well-balanced customer mix it attracts, the diversity of demand sources and the broad seasonality of the tourist market in Paris.
A recovery initially driven by domestic and European leisure customers is further supported by the slow but steady return of large-scale events, which should crystallize the recovery of international tourism to pre-pandemic levels.
“Paris remains one of the most popular destinations in Europe, both for tourists and investors. The pandemic has proven the resilience of the market, with no significant sales, if any. The performance recorded in the second half of 2021 suggests that the ‘hotel market could recover even sooner than expected,’ commented the report’s co-author, Mathilde De Bona, an analyst at HVS’s London office.
Paris has seen a marked decline in hotel performance with the outbreak of the COVID pandemic, although to a lesser degree than other European capitals. The recovery from the second half of 2021 demonstrates the resilience of the market, with RevPAR reaching around 50% of 2019 levels in 2021 compared to around 20% in Amsterdam and 30% in Brussels.
A modest hotel pipeline combined with reasonable existing supply means the city can capitalize on additional demand from events such as the 2023 Rugby World Cup and the Olympics in 2024, while limiting the post-Olympic performance adjustments seen in other destinations with a large pipeline of hotels before a major event.
“The outlook for the hotel sector in Paris is very strong. The city has remained among the top destinations for hotel investment across Europe, with prices pushed to record highs despite the performance impact of a series of ‘difficult events since 2015/16 such as the terrorism attacks, the Yellow Vests movement, the June 2019 heat wave and transport strikes,’ commented report author Sophie Perret, Senior Director at HVS London.
“The main uncertainty lies in the industry’s ability to absorb cost pressures resulting from the pandemic, subsequent wage negotiations and the war in Ukraine.”
You can download a copy of Market Pulse: Paris – A Spectacular Start to the Recovery by Mathilde De Bona and Sophie Perret here.
HVS is the global leader in consulting and valuation services focused on the hospitality, restaurant, condominium, gaming and leisure industries. Founded in 1980, the company performs over 4,500 assignments per year for virtually every major player in the industry. HVS directors are considered the best professionals in their respective regions of the globe. Through a global network of over 50 offices staffed by 300 experienced industry professionals, HVS provides an unrivaled range of complementary services for the hospitality industry. For more information regarding our expertise and the specifics of our services, please visit www.hvs.com.