Market Beat Greater Paris - H1 2026

INVESTMENT ACTIVITY

In H1 2026, the hotel investment market recorded approximately €845 millions in transaction volume, with 21 hotels representing 1,661 rooms transacted. Transaction activity declined sharply, both in terms of hotels sold and number of rooms. The overall investment volume is somewhat misleading, as it is heavily driven by the Pullman Tour Eiffel transaction, which also significantly impacts the average price per key. Excluding the Pullman Tour Eiffel, the average price per key stands at €291K, broadly in line with H1 2025. Half of the transactions involved upper-upscale hotels.

PRIME YIELDS

Prime yields have broadly stabilized over H1 2026, with levels generally ranging between 4.75% and 5.25% in Paris, reflecting a more balanced investment environment and sustained appetite for core assets. However, a degree of yield compression has been observed for smaller trophy assets in prime Parisian locations, such as Hotel Fauchon (54 rooms) in the 8th Arrondissement, where competition remains particularly intense. In these cases, pricing is increasingly driven by private equity, family offices and real estate funds who have shown a greater willingness to accept tighter yields to secure rare, best-in-class opportunities.

SUPPLY & DEMAND

Supply growth remains constrained by land scarcity, strict building regulations, and high construction and financing costs. As a result, conversions of existing buildings are more common than new developments. Recent openings also confirm an upmarket shift, illustrated by Le Bus Palladium, a former iconic Parisian nightclub converted into a 35-room five-star hotel, and Hotel Salvia, a 39-room four-star hotel resulting from the merger of three hotels.

PERFORMANCE

Greater Paris closed H1 2026 with solid operating momentum, reaching an average ADR of €160  occupancy of 73%, and RevPAR of €116 (+3.7% vs H1 2025). ADR remained flat, just below inflation rate, while occupancy rate improved by 1.8 percentage points. Inner Paris market sees its RevPAR increase by 3.1% compared to H1 2025, reaching €180. This is linked to a modest increase of the ADR rate to €223 (+1.8% vs H1 2025), broadly in line with the inflation rate, alongside a stable occupancy rate (+1.1 points vs H1 2025).