The Paris 2024 Summer Olympics celebrate athletic prowess and a golden opportunity for the short-term rental market in France. With a significant surge in bookings and strategic moves by platforms like Airbnb and Vrbo, the landscape of French short-term rentals is evolving dramatically. France is the second-largest market for Airbnb, with a staggering 788,000 listings.
This is unsurprising given the country’s rich culture, history, and scenic landscapes. The French short-term rental market is diverse, from sun-drenched villas in Cannes to cozy ski chalets in the Alps. Before Airbnb’s inception, French culture deeply embedded vacation rentals, catering to both international tourists and domestic travelers. This blog explores how the upcoming Paris Olympics 2024 will reshape the French short-term rental market. During the Paris 2024 Olympics event week, from July 26 to August 11, we expect significant activity in the short-term rental market, including occupancy rates, booked nights, ADR, and total listings. The data for this blog was collected on July 25, 2024.
Occupancy Trends
The data taken on July 25 shows that for the event period, occupancy is 42.91%. This represents a 12% decrease compared to the first two weeks of July 2024 (July 1 to July 14, 2024), which had an occupancy of 55.11%. It also shows a 9% decline in occupancy that was noted for the same period last year (July 28, 2023, to August 13, 2023) on July 25, 2023, which had an occupancy of 51.83%.
The unexpected decrease in occupancy during the Paris 2024 Olympics can be attributed to several factors. A primary reason is the significant increase in vacation rental listings, which rose from 74,386 during the same period last year to 140,539 during the event week this year. This oversupply has diluted demand across a larger number of properties.
According to Thibault Masson’s podcast, regular tourists are also deterred by the fact that iconic attractions like the Eiffel Tower are being utilized as Olympic backdrops, making them inaccessible. Furthermore, the extensive construction work leading up to the event has caused congestion and traffic issues, while the influx of Olympics visitors has led to overcrowding. Concerns over potential terrorism threats have also negatively impacted French tourism. To add to these challenges, poor weather in Paris has made outdoor activities less appealing, further discouraging typical tourist visits.
Hosts should implement pricing strategies to increase the occupancy rate to ensure they are not overcharging or undercharging for their listing.
Booked Nights Surge
Despite the drop in occupancy rates, the number of booked nights in Paris has seen a remarkable surge during the Olympics. As of July 25th, 2024, compared to the same date last year (July 25, 2023), booked nights increased by an impressive 56%, jumping from 594,195 to 926,855 for the dates July 28 to August 13. This significant growth in data underscores the heightened demand for accommodations during the event, reflecting the overall boost in rental activity despite lower individual occupancy rates. It is likely driven by longer stays and the influx of athletes, officials, and spectators. The increase in booked nights highlights that while individual occupancy rates may have dipped, the overall volume of rental activity experienced a substantial boost.
ADR Boost
The average daily rate (ADR) for vacation rentals in Paris increased during the Olympics. During the event week from July 26, 2024, to August 11, 2024, the ADR reached €342.15, compared to €238.03 during the first two weeks of July 2024. This represents a 44% rise, which may come as a disappointment to Parisian hosts, who were expecting a 2x to 3x increase in their ADR during the Olympics.
Hosts can still increase their revenue, but not as much as they thought, as it’s essential to remain competitive and attractive to potential guests, and they can’t do that by charging premium prices. As seen above, the number of Airbnbs in the area has significantly increased. Hosts must be mindful of their nightly charges to avoid losing potential bookings to other lower-priced Airbnbs.
Length of Stay (LOS) Shifts
During the Paris 2024 Olympics, the length of stay (LOS) trends have shown notable shifts. For stays lasting 7-14 days, there was a significant increase, with 30% of bookings falling into this category during the event week (July 26, 2024, to August 11, 2024), compared to 18% in the first two weeks of July 2024. In contrast, shorter stays of 1-6 days saw a decrease, accounting for 49% during the event week, down from 60% during the same period last year. This shift suggests that visitors, likely including athletes and officials, are opting for longer stays during the Olympics, which benefits hosts by reducing turnover and increasing revenue stability.
RevPAR Improvement
As of July 25, 2024, the revenue per available rental (RevPAR) has increased during the Paris 2024 Olympics. For the event week from July 26 to August 11, 2024, RevPAR is €146.80. This represents a 12% increase compared to the first two weeks of July 2024, when RevPAR was €131.20. Hotels, on the other hand, have reported a decrease in RevPAR by 25% for the event period, which suggests that there is more demand for short-term rentals than hotels. People traveling in groups or with families prefer short-term rentals over hotels.
Strategic Moves by Airbnb
To capitalize on the Olympics, Airbnb has launched several initiatives to increase the supply of listings. The platform has been actively recruiting new hosts, emphasizing the financial benefits and the unique cultural exchange hosting offers. Additionally, Airbnb introduced “Airbnb Rooms,” allowing hosts to rent out individual rooms in their homes. This move provides more affordable options for budget travelers and helps hosts in cities with strict regulations on entire property rentals to participate in the market. With this move, Airbnb can cater to a wide range of preferences and price points of travelers and provide more revenue opportunities to new hosts.
What Does This Mean for Hosts and Investors?
The Paris 2024 Olympics presents an unparalleled opportunity for vacation rental hosts in the city. Here’s what it means for them:
- Revenue Maximization: With the Average Daily Rate (ADR) significantly higher during the event period, hosts can command premium prices. Implementing dynamic pricing strategies can help optimize revenue.
- Encouraging Longer Stays: The trend toward longer stays is clear, with a 13% increase in bookings over 7-14 days. Hosts can capitalize on this demand by implementing minimum stay restrictions and offering targeted promotions and discounts for longer stays.
- Enhanced Marketing: Hosts still have time to attract last-minute bookings by leveraging effective vacation rental marketing strategies, such as targeted advertising, promotional discounts, and enhancing their online presence.
- Optimizing Occupancy: Despite a dip in overall occupancy rates, the increase in total booked nights and higher ADR balances out the vacation rental performance in Paris. Ensuring optimized listings are highly visible on platforms like Airbnb and Vrbo can help maintain high occupancy rates.
- Investment in Property: Now is the time for hosts to invest in upgrading their properties. Ensuring top-notch amenities and services can lead to better reviews, repeat business, and a competitive edge during the high-demand Olympic period.
The Future Outlook
As the Paris 2024 Summer Olympics are here, the short-term rental market in Paris is expected to continue experiencing dynamic changes. Despite current challenges, such as high vacancy rates and increased competition, the Olympics offer growth opportunities for hosts who may not be garnering as much revenue as expected but still higher than the previous year. With the surge in demand for accommodations, particularly longer stays, hosts can strategically position themselves to capitalize on this high-traffic period.
The marked increase in listings and fluctuations in ADR highlight the need for hosts to remain competitive while optimizing their pricing strategies. Those who can effectively balance competitive pricing with high-quality offerings will stand out in the crowded market. The comparative rise in RevPAR and booked nights underscores the growing appeal of short-term rentals over traditional hotels, reflecting a shift in traveler preferences toward more spacious and cost-effective accommodations.
Airbnb’s strategic initiatives, including the expansion of “Airbnb Rooms” and recruitment of new hosts, will likely continue to positively influence the market.