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 time in comparison with 2023, in keeping with analysis by eviivo and Key Knowledge.
Regardless of a short-term surge in the course of the Video games (July 26 – August 11), total summer time occupancy (June 1 – August 31) was down by 4.9% year-over-year (YoY) – with occupancy averaging 58% and RevPAR (Income Per Accessible 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 Knowledge, a brief time period rental (STR) information specialist, highlights the immense problem dealing with the broader hospitality business in sustaining momentum following landmark occasions.
The information 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 bounce 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 reducing 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 exhausting, together with year-round skilled operators. Based on the info, demand elevated by 166% between the tip 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, stated: “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 could have thought they had been taking part in a assured gold rush by renting out their rooms in the course of the Video games. However, for a lot of, they’ll have really made much less cash than they might have had they rented out their property throughout summer time 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 truth is that massive occasions just like the Olympics – which frequently set off a short-lived increase as beginner hosts bounce in to make a fast revenue – can go away 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 site of the property, not permitting low occupancy to linger for too lengthy earlier than taking motion. For this, they depend on software program with stay market information that may sync charges throughout numerous reserving channels, however much less skilled hosts usually miss out on these sorts of insights and are rather more weak.”
Sally Henry, VP of Enterprise Improvement EMEA at Key Knowledge, 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 terms of future high-profile occasions and seasonal swings.
“The important thing takeaway for managers, nevertheless, is that staying aggressive requires extra than simply reacting to massive occasions, it’s about proactively refining methods to keep up occupancy and profitability, even when the highlight isn’t shining.”