Average daily rates for Paris hotels during the Summer Olympic Games have been described as “exorbitant,” “colossal” and “hallucinatory.”
The numbers are making headlines in France as room prices grow up to 314% between July 26 and Aug. 11, 2024, the dates of the Games.
Average hotel rates are up from €169 ($182) to €690 for the Olympic Games, according to the Paris Tourist Office, with two-thirds of the 160,000 hotel rooms in Greater Paris yet to hit the market. Many of those off-market rooms are being reserved for the Olympic Committee, athletes, organizers and staff.
In November, the Office du Tourisme de Paris sent a message to hoteliers imploring them to make rooms available for all reservation requests.
“Together, let’s get the most out of the Games!” the message said.
So far, that message seems to have fallen on deaf ears.
With approximately 16 million tourists expected to attend the Games, the big question on many people’s lips is will they get a room, and at what price? Over the past few weeks, prices on hotel booking platforms have skyrocketed compared to summer 2023, from double to as much as to 15 times higher.
At luxury hotel Nolinski Paris, close to the Louvre, prices for the duration of the Olympics are approximately €1,500 a night, compared to €1,000 over summer 2023. That rate is double its prices in early winter and more than double the ADR the week following the end of the Olympic Games.
Emmanuel Sauvage, co-founder and managing director of the Evok Collection group of hotels, said hotel rates in Paris might soon drop with increased competition.
“Currently, there are many hotels that are not selling rooms, as they gave a part of their sales to the Games’ organizers, the Olympic Committee, which is going to release them later in December,” he said. “There are going to be lots of rooms on the market. For the time being, we have no idea. … The prices are indicative.”
Budget Bonanza
David Zenouda, vice president of the Greater Paris branch of France’s largest hotel industry trade body, the UMIH, said the “fierce competition” has gone too far. But price gouging is not that widespread, he added.
“Only a few people are taking advantage of the situation, a few months before the opening of the Olympics,” he said.
Zenouda said the price hikes are particularly apparent in the budget hotel sector, where some operators feel they can take advantage of tourists “who don’t look at prices.”
From a study of some 180 hotels, French property assessor Alan Colin, owner of Colin Expertises, said “the average nightly room prices for the Games period were €1,054 for a 3-star hotel ... and €1,362 for a 4-star, compared to €148 and €221, respectively, in 2023,” a rise of 612% and 616%, respectively.
A hotel that might normally cost €80 to €200 in Paris will instead cost €400 to €700 a night, French newspaper Le Monde noted, even “in a neighborhood not very attractive for tourists. … Prices no longer have any connection with the service offered.”
Accor, France and Europe’s largest hotel company, is an official partner of Paris 2023.
Antoine Dubois, Accor’s head of guest experience and loyalty for Europe and North Africa, said “a third of its hotel inventory has entered into contracts with the Games’ organizers and have fixed prices.”
For other hotels not owned by the group, “Accor sent hoteliers recommendations on prices with a cap,” Dubois told French hospitality media site L’Hôtellière-Restauration.
“The prices must be consistent with the positioning of our brands and the location of the hotels,” he added. “We are convinced that there is a price that should not be exceeded, even if the demand is great.”
Supply and Demand
Those caps do seem to have been exceeded in many cases, said Frank Delvau, president of UMIH Paris.
“Prices are excessive when they multiply by [as much as] eight,” he said, adding it is normal to an extent during such an important event “because it’s a very inflationary period … and everyone is free to set their own prices.”
Zenouda said there will be a wave of bookings once more hotel rooms are made available.
“Note that 70% of reservations are not yet online,” Zenouda said. “Others have opened up their bookings, but that doesn’t mean they have sold the rooms. … The fact they are still online suggests not. Accor, for example, have pre-reserved 30% of their rooms, but there is still 60% to 70% not up for sale. It’s a question of yield management, so they are waiting to sell them to guests at the right time, for the right price.”
Delvau said he also believes prices will stabilize as more rooms come on the market starting in January.
“Many hoteliers are still waiting to get a better idea of the level of demand before setting their prices,” he said.
Zenouda said the high rates are not shining the best light on the Paris hotel industry and do not represent “the best method of selling hotel nights.”
Franck Trouet, managing director of independent French hotel organization GHR, said he also predicted “demand will probably dry up … as the entire Parisian hotel network opens up to reservations.”
Trouet said there is danger in the industry’s short-term thinking.
“Anyone who lifts their prices significantly, without offering a level of service to make it palatable to the guest to accept this price, runs the risk of negative reviews,” he said.
Given the lack of regulation of hotel prices in France, that’s the only sanction hotels face.
User backlash to high room rates could lead to lower occupancy, as it did during the 2012 London Olympics.
“Occupancies [during London] were down 12%,” Zenouda said. “Only the 4- to 5-star hotels saw better occupancies. [In Paris], maybe for small hotels, it won’t be a success … it isn’t sure they will be full. But for high-end hotels, it will be very advantageous.”
He said better communication as to what is a “reasonable price policy” is the correct approach to take.
“We have no power to regulate hotels. Hoteliers operate on the basis of supply and demand. As soon as the reservations are open, those prices will adjust,” he said.
Some hoteliers in Paris do not believe prices will drop once more hotel rooms are released for the Olympics. Raghoul Jeminthar, general manager of Hôtel Kyriad Paris Nord, Porte de Saint Ouen — located on the northern edge of Paris — said he anticipates room rates will stay elevated.
At the midscale hotel, early winter ADR is typically around €80, but that generally rises to approximately “€400 in the peak summer season,” Jeminthar said.
“I imagine during the Olympic Games next year … it will be tripled. When the demand is there, that’s the way the market works,” he said.