London, 10 September 2024 — A surge of “have-a-go hoteliers” cashing in on the Olympics led to a 24% drop in per-property income in Paris’ trip rental market this summer season in comparison with 2023, in accordance with analysis by eviivo and Key Information.
Regardless of a short-term surge throughout the Video games (July 26 – August 11), general summer season occupancy (June 1 – August 31) was down by 4.9% year-over-year (YoY) – with occupancy averaging 58% and RevPAR (Income Per Out there Rental) plunging by a staggering 24% to €151.
This analysis1 by eviivo, an all-in-one property administration software program (PMS) utilized by over 27,000 hospitality companies, and Key Information, a brief time period rental (STR) information specialist, highlights the immense problem going through the broader hospitality business in sustaining momentum following landmark occasions.
The info reveals that there was a white-hot 229% surge in STR demand throughout the Video games interval – outpacing the 201% enhance in provide and boosting Paris hospitality sector with a 37.5% rise in paid occupancy to 66%, and a 16% enhance in ADR to €319, resulting in a 37% YoY soar in RevPAR to €210.
The elevated variety of STR properties additionally led to a noticeable shift in visitor behaviour, with the common reserving window shortening by 31%, from 32 to 22 days. The rise made it simpler for last-minute bookings which, alongside demand for shorter stays to catch particular occasions, contributed to common keep lengths lowering by 21%, from 4.9 to 3.9 days in comparison with the earlier yr.
Nevertheless, the enduring oversupply post-event is hitting the entire of the Paris STR market onerous, together with year-round skilled operators. In response to the info, demand elevated by 166% between the top of the Olympic Video games on August 12 and August 31, three days after the Paralympics opening ceremony. Nevertheless, provide was nonetheless up by 200%, leading to a 10.4% drop in occupancy from 48% to 43%, and a 23% decline in RevPAR in comparison with the identical interval final yr.
The STR market weakened even earlier than the Video games started. Between June 1 – July 25, a 151% demand enhance was outpaced by a 196% provide surge. This led to a 11.5% drop in occupancy from 69% to 61%, and a 37% RevPAR decline in comparison with the identical interval in 2023.
Ruth Whitehead, COO at eviivo, mentioned: “A surge of have-a-go hoteliers signifies that the Paris hospitality market is now grappling with the aftermath of a marathon it might not have been anticipating.
“Parisians might have thought they have been collaborating in a assured gold rush by renting out their rooms throughout the Video games. However, for a lot of, they may have truly made much less cash than they’d have had they rented out their property throughout summer season 2023.
“Sadly, the knock-on impact hasn’t been confined to the town’s STR market alone. Skilled hosts, property managers, and hoteliers are all feeling the burn of such spectacular oversupply. The fact is that huge occasions just like the Olympics – which frequently set off a short-lived growth as novice hosts soar in to make a fast revenue – can depart the hospitality professionals grappling to keep up momentum as soon as the crowds have gone.
“When there’s a lot provide, property managers have restricted choices however the extra skilled amongst them will normally undertake pricing methods that imply they’re not caught out. More often than not this implies recognising oversupply early and factoring that into pricing, discounting sooner and, relying on the desirability and placement of the property, not permitting low occupancy to linger for too lengthy earlier than taking motion. For this, they depend on software program with reside market information that may sync charges throughout numerous reserving channels, however much less skilled hosts typically miss out on these sorts of insights and are far more weak.”
Sally Henry, VP of Enterprise Improvement EMEA at Key Information, added: “Because the Olympic torch fades, Paris’ hospitality sector is left to rebalance provide with demand. The 2024 Summer season Olympics have given us loads of meals for thought, classes that can show invaluable in the case of future high-profile occasions and seasonal swings.
“The important thing takeaway for managers, nonetheless, is that staying aggressive requires extra than simply reacting to huge occasions, it’s about proactively refining methods to keep up occupancy and profitability, even when the highlight isn’t shining.”
