Hotel Market Beat 2023 - Greater Paris

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 high-end 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.

About Cushman & Wakefield

Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and 60 countries. In 2023, the firm reported revenue of $9.5 billion across its core services of property, facilities and project management, leasing, capital markets, and valuation and other services. It also receives numerous industry and business accolades for its award-winning culture and commitment to Diversity, Equity and Inclusion (DEI), sustainability and more.

For additional information, visit www.cushmanwakefield.com

Katell Bourgeois
Head of Hospitality France
+33 672 594 171
Cushman & Wakefield

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