Paris’ luxury hotels fear the rise of Airbnb

Fred Dufour, AFP file picture | Doormen stand outside the famed Plaza Athenee hotel in Paris, on August 19, 2014

Nowhere in the world has more accommodation available on Airbnb than Paris. Now the home-sharing website that has transformed budget travel to the French capital is giving its super-deluxe hotels a fright too.


“The Paris market is going to get very difficult,” said Didier le Calvez, managing director of the French capital’s famed Bristol Hotel. Along with bosses of the city’s other luxury hotels, he denounces Airbnb as a menace that enjoys an unfair advantage.

A trawl of the Paris region’s 50,000 Airbnb offerings - there were only 7,000 across the whole of France in 2012 - suggests le Calvez and his colleagues have reason to be concerned.

Now, Paris has become the No. 1 destination for Airbnb users – and is increasingly attracting wealthy renters. Airbnb currently has on offer between 380 and 400 Paris apartments at over €500 a night and, of those, about 40 charge over €1,000.

Add in the attraction of individuality, anonymity and in some cases extra beds, and that puts them potentially in competition with the 1,000 euro a night luxury Bristol Hotel and half a dozen other high-end Paris hotels, which have about 1,500 rooms to offer in total.

The Paris luxury sector is already worried about a surge in competition from newly opening hotels. Consultants JLL Hotels & Hospitality estimate that capacity will be 60 percent higher in 2018 than a decade earlier.

A downturn in visits from wealthy Russians and Brazilians as their economies falter, and fears among US visitors of rising anti-semitism in France, are also a factor.

Seventeenth century penthouse

The Bristol suffered a 20 percent drop in revenue in the first half of this year and an occupancy rate that fell to 61.2 percent from 69.2. The renowned Four Seasons George V saw a 5 percentage point drop in occupancy to 66 percent in the same period. These factors saw The Plaza Athenee cut its prices by 20 percent last winter.

At the same time, maid and concierge services and other extras are all available along with some seriously upscale real estate on Airbnb, the US-based firm which has been valued at around $10 billion.

One flat available was once the home of film star Brigitte Bardot, and whose “140 metre square terrace offers you a breathtaking 360 degree view of the capital city” - all for £1,200 a night.

Another similarly-priced flat has a view of the Eiffel Tower from its luxurious-looking bathroom.

American actress Judith Freiha gets rave reviews for her one bedroom apartment on the stunning Ile Saint Louis, an island in the River Seine near the heart of the city whose buildings date back to the 17th Century.

At €900 euros a night her bijou 54 square metre penthouse - with its two terraces facing south to a secluded courtyard and north onto the main street - attracts Silicon Valley professionals, supermodels and wealthy courting couples. One romantically inclined client proposed to his girlfriend there.

Included in the price is a “meet and greet” service from Freiha herself, who has family in Paris with whom she can stay.

She lets her flat around six weeks a year, for stays ranging mainly from two nights to a week.

Airbnb, however, says it is not in competition with the the French capital’s hotels.
“It’s a totally different thing,” said Nicolas Ferrary, director of the company’s operation in France.

A spokeswoman added: “These residences are chosen for the unique experience they offer, but which remain very different from what a luxury hotel can propose.”

Earlier this year, Airbnb’s CEO Brian Chesky also paid a visit to the capital to reassure Paris city officials that his company has only boosted tourism to the city .

“I don’t think for us to win [that] anybody has to lose,” he said after the meeting with Deputy Mayor Bruno Julliard, noting that Airbnb chiefly serves as an alternative for those who struggle to find affordable accommodation and who would otherwise not be able to afford visiting Paris.

Julliard agreed, saying: “Airbnb has become an essential offering for accommodation in Paris, especially for younger tourists”.

But despite those arguments, the city’s high-end hotels are not so sure.

Does the new law change anything?

A recent change in the law, which was previously unclear about sub-letting homes, gave French people the right to do so with their main residence for four months of the year.

Although they should declare any income for tax purposes, they do not face the other tax and social charges that a business such as a hotel has to pay.

“It’s a tax attack,” said François Delahaye, managing director of the Plaza Athenee.

Jose Silva, who runs the Four Seasons George V, said: “It’s obvious that a large part of our clientele, especially the families, will abandon the hotels.”

The surge in super-luxury hotel capacity that began in 2008, just before the financial crisis struck, was aimed at satisfying demand for the ultimate pampering city break.

For Silva at the George V, the industry just needs to keep raising its game. The refurbished Ritz, opening at the end of this year, and the updated Crillon, which will be bookable in 2017, are testament to that.

“Wealth and world demand is going to grow,” he said. “Hotels should continue to offer a radically different experience.”


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