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Paris Hotel Market Shows Signs of Recovery

News Last years were challenging for the economy of France. In 2019, the situation seems to stabilize as the purchasing power is growing, the unemployment rate is decreasing, and experts now forecast small GDP growth of 1.5% for the country. France also keeps its position as a popular tourist destination, and Paris remains the top choice. The city has a great mix of leisure and business tourism that makes the City of Lights a sought-after destination all year round. Paris and London have been the most popular hotel investment choices for more than a decade.

Paris hotels do not feel any shortage of customers as the demand for tourism to Paris remains steady. Approximately 15-16.5 million guests have visited the city over the last decade. Terrorist attacks in 2015 – 2016 had their negative impact but the market recovered quickly in 2017, reaching new heights in 2018. This has become possible thanks to the growth of international tourism and large events like the Ryder Cup 2018. The United States remain the biggest source market for the French capital.

The end of 2018 and the first quarter of 2019 were the time of decreases for the tourism industry of Paris due to the “gilets jaunes” movement. Naturally, many tourists decided to refrain from visiting the capital during the period of mass protests. The second quarter of 2019 had stronger results due to such large events as the Paris Air Show and the Women’s Football World Cup.

Hotels in Paris had good revenue levels in 2018 but they were still behind the fantastic results of 2012 when hotels in the capital of France had their occupancy higher than 80%. The occupancy fell down again in the first quarter of 2019. The luxury market suffered the most as upscale international guests decided to postpone their visits to Paris due to the “gilets jaunes” movement. Paris hotels had a double-digit growth in RevPAR in 2018 that fell down significantly at the start of 2019. That being said, the performance of Paris’s hotels is still one of the best in Europe.

Current pipeline in the City of Lights is more than 6,800 rooms, which is 8% of the existing hotel supply. Luxury and upscale hotels will suffer the most as the majority of new openings will fall into this category. At the end of 2018, there are 1,600 hotels with a total of 82,500 rooms in Paris. Some of the most notable hotel openings of 2018 include the 76-room Hôtel de Berri (the Luxury Collection), the 54-room Fauchon, the 128-room Hotel Lutetia, and the first Motel One in Porte Dorée. This year, the 164-room Hotel du Louvre (Hyatt), the 25hours Hotel Terminus Nord, and the first JO&JOE Paris-Gentilly opened in the city.


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