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Paris Hospitality MarketBeat

The hospitality Marketbeat greater Paris region analyses the activity of commercial real estate in Paris region in the hospitality sector, taking into account supply, take-up and transactions across markets and submarkets.

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Last update: january 2024

Investment Trends

In 2023, the hotel transaction volume in Greater Paris reached €1.7 billion, marking a 27% rise from 2022. The significant increase was primarily driven by The Westin Paris transaction, making up 40% of the total volume, with a price per key exceeding €1.5 million. Excluding this major transaction, the total volume would have been 23% lower than the level recorded in 2022.

Prime Yields

Following a sharp increase in benchmark interest rates initiated in mid-2022 to combat inflation and a series of rate hikes halted in October 2023, the eurozone now stands at around 4%. Confident in its monetary policy and its ability to bring rates back to around 2%, 2024 holds promise, with analysts forecasting a potential rate cut starting in the summer of 2024.

Market Performance

Hotels recorded outstanding performances in 2023, with a RevPAR of 178€ in inner Paris (+35.7% vs 2019) and 61€ in Greater Paris (+7.5% vs 2019). Operational performances were mainly driven by a strong ADR (226€ for inner Paris and 89€ for Greater Paris) while occupancy rates reached 78.9% in inner Paris and 68.5% in Greater Paris, representing a decrease of -1.1 and -5.6 percentage points compared to 2019.

Supply Outlook

In 2023, the hotel supply increased by 40 properties (newly opened and renovated properties), adding approximately 4,000 rooms, most of which opened in the first half of the year. This included primarily midscale to upper-upscale properties in central Paris and the periphery, but also highly expected highend assets such as the Domaine de la Reine Margot MGallery, Maison Delano Paris and Le Grand Mazarin by Maisons Pariente.

Demand Outlook

During 2023, Greater Paris pursued its recovery in terms of demand, recording an increase of approximately 10% in the number of hotel arrivals compared to the previous year, but a decrease of around 5.0% compared to 2019. It is anticipated that 2024 will accelerate this trend, allowing Paris to regain pre-COVID levels of visitors, notably due to the summer period and the hosting of the Olympic Games.

Related Insights

Research • Economy

Outlook 2024 France, what can we expect in Commercial Real Estate in 2024?

2024 begins with a glimmer of hope for the French economy, after four years of major disruption linked to global health, political and economic crises. Against this complex backdrop, France is seeking to maintain its indicators despite persistent challenges, notably tensions over energy prices. The European Commission, however, has revised its estimates downwards, taking into account persistent inflation and high key interest rates. Let's take a look at the main aspects and convictions for the year ahead.
Christelle Bastard • 23/01/2024


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