The success of the luxury hotel sector in Paris does not bring about only good wishes. This market remains dominated by a major characteristic, which is the depletion that has been taking place for years.

The construction of new hotels has unleashed much interest, because of the arrival of new brands in the French capital, but at the end of the day, the extra supply is marginal. It has shrunken even more because of the major construction that is going to hijack a good portion of a supply that has waited too long to renovate.

If the situation is favorable for establishments that are open, then it has further stimulated real estate speculation. The latest acquisitions done in Paris by Qatari investment funds are placing the bar continually higher. Exceptions are becoming commonplace, and the hunt for trophy assets are disrupting the management rules of hotel operators. Logically, the profitability of an investment should bring a progressive increase of rack tariffs. It's also a large a playing field for parasite–like practices on behalf of private individuals landlords.

Marginal phenomenon, a few years ago, the rental of furnished apartments for short-term periods has become a true parallel industry. With internet, it is increasingly easier to choose from a selection of upscale apartments for a short stay in a trendy neighbourhood, for the same price as a single night on avenue Montaigne. In infraction with urban and commercial laws, thousands of furnished apartments are literally asphyxiating a market that is losing leeway. Do we need to wait for someone to get hurt because of a lack of hygiene or security before we act? At the same time, investors that are trying to create new projects are having a hard time finding the rest of their financing. The true entrepreneurs that bring a potential for economic growth and that are ready for recruitment meet their fate. The surprising resistance of the upscale hotel sector should not enter a new war where they are faced with snipers that don't play fair.

If hotel groups have more commercial means to react to this new disloyal competition, they are not safe from the abnormal deflection of clientele. Furthermore, it's once again the independent hoteliers that are going to pay the price of the degrading market, as if they haven't already enough to do to take back control of their online distribution from OTAs. Public authorities need to make the call to order of the competition a priority.

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