Preparations for the 2024 Summer Olympic Games are already in full swing in
Paris. The world-famous monuments are being turned into sports arenas, official merchandise is selling like hotcakes, and the city's real estate market is gearing up for a busy summer ahead.
Even now, in the early days of 2024, we already see booking trends that might indicate how the Olympics will impact Paris real estate. What will be the average price per night for hotel rooms during the Olympics? What are the market trends? Have hotel and rental bookings increased this year? Will the Olympics change the city’s real estate market for good? We're comparing Paris short-term rentals with hotels and it's hard not to take notice of the changes. Our analysis report will lay it out for you!
What's The Market Price Now?
First, let's take a look at how real estate prices are changing as the
Paris 2024 Olympics draws near. As of early 2024, we’ve noticed that average prices for short-term rentals in Paris have gone up twice or 2.5 times higher than before. Meanwhile, hotels are charging around triple or 3.5 times higher for their rooms per night. On average, the price per night for short-term rental apartments in Paris is 35% lower than that of hotel rooms. Even the average booking value is 40% lower than the prices listed on various platforms. So what does this mean?
For one thing, there's a big difference between what's currently listed and what's being booked. The average listing price ranges from €700.00 to €800.00 per night, but the actual booking value is only €450 per night. This shows a stark disparity between what’s being listed and what’s being booked.
Currently, properties listed at three, four, or five times higher than before are not getting booked. As such, the only available
rental apartments in Paris right now are those listed with very high asking prices. This also aligns with what happened in London's real estate market when the city hosted the 2012 Summer Olympic Games. The market expected to see prices increase up to 10 times more one year before the event; however, the average price only increased by 80%, much lower than what was forecasted prior to the event. Since both Paris and London are major capital cities and are well-populated, we can expect that the same will happen this summer with a market price correction.
Early 2024 Occupancy Rates in Paris
Hotels have something to look forward to, though. Based on our market research, the occupancy rate of hotels has increased to 50% this early in 2024 and it's expected to rise even higher as we get closer and closer to the Paris Olympics. On the flip side, the occupancy of short-term rentals is also increasing, albeit at a slower 30% rate increase. Just like with hotels, we can expect this to go even higher as the global sporting event draws near. At that point, however, there will be many more new listings on the Paris market. This could then lead to a substantial decrease in the average price per night if we take into account the law of supply and demand.
Hotel Room Inventory Forecast
Speaking of hotels, how many rooms have already been booked? According to different studies, hotel rooms in Paris are currently showing 26% of their availabilities before the event. We don’t know if hotels are already fully booked or if they’re purposefully not releasing their full inventory on the market right now. However, if we consider the occupancy rate is currently at 50% as of early 2024, it means hotels are hiding some of their inventories for potential last-minute bookings. Nevertheless, this strategy to downplay the offers in order to keep a high price level on the market can be risky. If hotels release their full inventory on the market as the event approaches, however, this may create more offers on the market and reduce the average price per night.
Only time will tell whether what the hotels are doing now will be effective or not, especially since there's also a huge risk of most visitors finding other options. Instead of booking a room in a hotel, they can easily rent a short-term rental in Paris which is usually cheaper than a hotel room. This gives them more flexibility, privacy, and the opportunity to
host watch parties of the Paris games.
How Could The 2024 Olympics Impact The Paris Short-Term Rental Market?
As excited as Paris already is for the upcoming 2024 Summer Olympics,
its overall impact on the city's furnished rental market could be limited. A majority of the audience is expected to be French residents coming from different parts of the country and the average length of stay for the visiting spectators is estimated to only be a few nights. Not only will this reduce the need for temporary accommodations, but the few nights estimation casts further doubt on any potential increase in demand that could boost the market for short-term rentals.
Only property owners offering up their registered main residences can lease out their real estate under a short-term rental or tourist rental lease, resulting in a limited market. As such, we expect other property owners who have never leased out their properties to try their hand in the rental game, especially since the listed prices right now are quite high. This will create more short-term rentals on the market, which in turn will lower the prices of the properties already listed.
Other property owners that are not eligible to register their real estate as short-term rentals can still offer up their secondary homes under the mobility lease. This permits tenants to rent an apartment for a minimum of one month under specific conditions. But since the demand during the Olympics will only require a few nights stay, we don't expect a huge increase in demand as a result.
Nevertheless, the Paris 2024 Olympics will undoubtedly boost the city's tourism even further. The positive showing of the French capital might just improve the city's image after a variety of tragic and tumultuous events over the past few years (i.e. violent political protests, the 2019 Notre Dame fire, etc.). With this possible change, we can still expect a higher demand for short-term/tourist rentals from foreigners.
How Many People are Going to The Paris 2024 Olympics?
Of course, all of these findings won't matter without some data on the number of people going to Paris for the 2024 Summer Olympics. Based on everything released so far, we can expect the French capital to welcome about 15 million visitors this July, and about 1.5 million of them will come from overseas. With 13.5 million tickets going on sale, there’s a good chance that 90% of all visitors would be French. Most of them will likely book around one to three nights for their accommodations, which will pose a new set of problems for hotels and hosts abiding by minimum stay restrictions.
The Important Takeaways
Perhaps the most important thing to take away from all this data analysis is that it's vital to stay informed of the real estate market trends in Paris right now. They further stress the true
impact of the 2024 Olympics on Paris real estate. The event is only a couple of months away and many changes have already occurred. Overestimating the demand can lead to various losses at an opportune time for real estate success. Property owners who want to rent out their apartments to visitors during the Olympics should also be careful not to increase the price too much. An over-increase in price per night lessens the chances of getting booked.
How Can You Rent Out Your Paris Apartment?
Do you own property in Paris? Perhaps you can also join the rental real estate market, especially with fascinating trends going on now thanks to the Paris 2024 Olympics. There's arguably no better time to lease out your apartment in Paris than now. Whether you partner up with an agency or not, the process is fairly simple.
- Declare your intention to rent out your apartment at City Hall.
- List your property online.
- Talk with interested tenant candidates.
- Look over their tenant profiles.
- Negotiate on the terms of the lease.
- Seal the deal by signing the contract.
Do note that if you're renting out your secondary residence, you don't need to declare it at City Hall as long as it falls under the
mobility lease with a one-month minimum stay.
What are The Related Costs?
Will leasing out your apartment in Paris cost a lot? According to the
French tax system, yes, a bit! The process of renting out your property comes with a whole host of taxes. Most notably, the rent counts as income and will be subject to income tax under the category of industrial and commercial profits (BIC). You'll also have to pay professional fees for any real estate agency you hire for this endeavor.
Can You Sublet Your Apartment During the Olympics?
Let's say you
moved to Paris and currently renting an apartment. A great way to join the real estate game during the Olympics is to sublet your place. Subletting is legal in Paris and as long as you get the consent of your landlord, you can do it too. It's a great way to earn a few extra bucks and even help a friend out. Just remember that you will still be responsible for the property, especially for any damage done by the sub-tenant. The landlord also reserves the right to terminate your existing lease if any major problem arises during the subletting.
As of early 2024, we're already seeing major shifts in the Paris real estate market, especially when it comes to short-term rentals, their prices, and booking rates. These findings further stress the impact the Paris 2024 Olympics will have on the city.
Are you interested in leasing out your apartment in Paris during the Olympics? We will be happy to assist you with the rental process. List your home for the 2024 Paris Olympics with us now!
