Hotel Market Beat 2025 H1 - Greater Paris

INVESTMENT ACTIVITY

In the first half of 2025, hotel transaction volume in Greater Paris exceeded €600 million, with a total of 28 hotels and 2,120 rooms sold. Although transaction volume has declined by 46%, there was a significant increase in the total number of properties and rooms sold. This decline in transaction volume is mainly due to fewer large-scale deals compared to H1 2024, when four hotels accounted for nearly 80% of the total volume. Despite this, the hotel market remains in good momentum supported by a strong demand.

PRIME YIELDS

Throughout the first half of 2025, yields slightly compressed, particularly for prime assets, settling in the 4.5% to 5.0% range. This reflects a strong investor appetite for high-quality assets in core locations and a limited supply of trophy properties. Greater Paris remains highly attractive and dynamic, reinforced by its position as one of Europe’s leading hospitality real estate hubs.

SUPPLY & DEMAND

Hotel supply increased slightly during the period, notably, marked by the openings of Upper Upscale and Luxury properties in prime locations, such as Maison Barrière Vendôme and Hôtel SAX Paris, catering to travellers seeking premium experiences. On the demand side, Greater Paris confirmed its appeal in H1 2025 (+3% vs H1 2024), supported by the return of international travellers and positive economic momentum. International demand rose sharply (+9% vs H1 2024), led by traditional markets including the USA, UK, Germany, and Spain, as well as notable growth from more distant markets such as Brazil, China, and Canada. In contrast, domestic demand edged down slightly (-1% vs H1 2024).

PERFORMANCE

RevPAR grew significantly in H1 2025, up 7.7% relative to H1 2024. This was driven by a 2.2 percentage points rise in occupancy and a 4.4% increase in ADR. Greater Paris RevPAR growth outperformed the European average (2.6%), highlighting the market’s strong momentum. A particularly robust performance was recorded within the high-end segment (Upscale to Luxury), with RevPAR increasing by 12.3%.