Parisian recovery sets hotel investors' pulse racing

According to Paris – A Spectacular Start to the Recovery, a Market Pulse report from global hotel consultancy HVS, the French capital is seen as one of the most desirable destinations for hotel investors. The report states that this strong post-pandemic position is down to strong support from the French government combined with the continued worldwide appeal of Paris. Compared with other gateway markets, the city has seen a solid rise in demand from June 2021, supported by the well-balanced customer mix it attracts, diverse demand sources and the broad seasonality of its tourist market. A recovery initially driven by domestic and European leisure customers is being further supported by the slow but continued return of large-scale events, which are expected to solidify the recovery of international tourism to pre-pandemic levels, the report notes. Mathilde De Bona, co-author of the report and an analyst with HVS London, stated: “Paris remains one of the most popular destinations in Europe, both for tourists and investors. The pandemic has proved the resilience of the market, with no significant, if any, distressed sales. Performance recorded in the second half of 2021 suggests that the hotel market could recover even earlier than expected.” A modest hotel pipeline combined with a reasonable existing supply means the city can capitalise on additional demand from events such as the 2023 Rugby World Cup and the Olympic Games in 2024, while at the same time limiting post-Olympic adjustments in performance seen in other destinations with a large hotel pipeline ahead of a major event. Sophie Perret, co-author of the report and a senior director at HVS London, commented: “The outlook for the hotel sector in Paris is very strong. The city has remained amongst the core hotel investment destinations across Europe, with prices being pushed to record levels despite performance being impacted by a series of challenging events since 2015/16 such as terrorist attacks, the yellow-vest movement, the heatwave of June 2019 and transport strikes. “The main uncertainty lies in the ability of the industry to absorb the cost pressures resulting from the pandemic, the subsequent wage negotiation and the war in Ukraine.” To see the full report, please click here.