Paris STR market experiences summer decline as amateur hoteliers attempt to profit from the Olympic Games

A surge of “have-a-go hoteliers” cashing in on the Olympics led to a 24% drop in per-property revenue in Paris’ vacation rental market this summer compared to 2023, according to research by eviivo and Key Data.

Despite a short-term surge during the Olympic Games in France (July 26 – August 11), overall summer occupancy (June 1 – August 31) was down by 4.9% year-over-year (YoY) – with occupancy averaging 58% and RevPAR (Revenue Per Available Rental) plunging by a staggering 24% to €151.

This research by eviivo, an all-in-one property management software (PMS) used by over 27,000 hospitality businesses, and Key Data, a short term rental (STR) data specialist, highlights the immense challenge facing the wider hospitality industry in sustaining momentum following landmark events.

The data shows that there was a white-hot 229% surge in STR demand during the Games period – outpacing the 201% increase in supply and boosting the Paris hospitality sector with a 37.5% rise in paid occupancy to 66%, and a 16% increase in ADR to €319, leading to a 37% YoY jump in RevPAR to €210.

The increased number of  Paris STR properties also led to a noticeable shift in guest behaviour, with the average booking window shortening by 31%, from 32 to 22 days. The increase made it easier for last-minute bookings which, alongside demand for shorter stays to catch specific events, contributed to average stay lengths decreasing by 21%, from 4.9 to 3.9 days compared to the previous year.

However, the enduring oversupply post-event is hitting the whole of the Paris STR market hard, including year-round professional operators. According to the data, demand increased by 166% between the end of the Olympic Games on August 12 and August 31, three days after the Paralympics opening ceremony. However, supply was still up by 200%, resulting in a 10.4% drop in occupancy from 48% to 43%, and a 23% decline in RevPAR compared to the same period last year.

The STR market weakened even before the Games began. Between June 1 – July 25, a 151% demand increase was outpaced by a 196% supply surge. This led to a 11.5% drop in occupancy from 69% to 61%, and a 37% RevPAR decline compared to the same period in 2023.

Ruth Whitehead, COO at eviivo, said: “A surge of have-a-go hoteliers means that the Paris hospitality market is now grappling with the aftermath of a marathon it may not have been expecting.
“Parisians may have thought they were participating in a guaranteed gold rush by renting out their rooms during the Games. But, for many, they will have actually made less money than they would have had they rented out their property during summer 2023.

“Unfortunately, the knock-on effect hasn’t been confined to the city’s STR market alone. Professional hosts, property managers, and hoteliers are all feeling the burn of such spectacular oversupply. The reality is that big events like the Olympics – which often trigger a short-lived boom as amateur hosts jump in to make a quick profit – can leave the hospitality professionals grappling to maintain momentum once the crowds have gone.

“When there’s so much supply, property managers have limited options but the more professional among them will usually adopt pricing strategies that mean they’re not caught out. Most of the time this means recognising oversupply early and factoring that into pricing, discounting sooner and, depending on the desirability and location of the property, not allowing low occupancy to linger for too long before taking action. For this, they rely on software with live market data that can sync rates across various booking channels, but less experienced hosts often miss out on those kinds of insights and are much more vulnerable.”

Sally Henry, VP of Business Development EMEA at Key Data, added: “As the Olympic torch fades, Paris’ hospitality sector is left to rebalance supply with demand. The 2024 Summer Olympics have given us plenty of food for thought, lessons that will prove invaluable when it comes to future high-profile events and seasonal swings.

“The key takeaway for managers, however, is that staying competitive requires more than just reacting to big events, it’s about proactively refining strategies to maintain occupancy and profitability, even when the spotlight isn’t shining.”

The article Paris STR market experiences summer decline as amateur hoteliers attempt to profit from the Olympic Games first appeared in TravelDailyNews International.