Hotels in Paris: selling and buying in the Paris market

Paris is the most closely followed hotel market in France. Institutional investors, hotel groups, family offices and overseas buyers are looking for assets there all the time, while the supply of hotels for sale stays thin. For an owner, that tension cuts both ways. It supports interest in the hotel. It also means that any information about a sale can be put to use by others straight away. This page covers the city itself and the inner ring of suburbs, the petite couronne (Hauts-de-Seine, Seine-Saint-Denis, Val-de-Marne), which work in quite different ways.

Demand that does not rest on one client base

Paris draws its resilience from variety. Different guests take over from one another across the week and the year, which cushions a fall in any single segment.

• Corporate travel. Head offices, government bodies, international organisations, consultancies and law firms fill rooms on weekdays. La Défense, spread across Courbevoie, Puteaux and Nanterre, generates office demand of its own.
• Trade fairs and conferences. The Palais des Congrès at Porte Maillot, Paris Expo Porte de Versailles and the Paris Nord Villepinte exhibition centre host a crowded calendar. Nearby hotels live by it.
• Events. Fashion weeks, fixtures at the Stade de France or Roland-Garros, major concerts: these dates create peaks that any buyer will pick out of the trading history.
• International leisure. Museums, heritage, food and luxury retail make Paris a leisure destination in its own right, including at weekends and in summer, when corporate demand eases.

Access completes the picture: Charles de Gaulle and Orly airports, the mainline stations, including Gare du Nord for London and Brussels, and a transport network that the Grand Paris Express is set to extend into the suburbs. Walking distance to a metro station is still one of the first things a buyer checks.

The assets you find

The Paris hotel stock is old, fragmented and dense. It is made up mainly of:

• family-owned independents of small and medium size, held for one or two generations, with property and business sometimes together, sometimes split over successive inheritances
• Haussmann-era or older buildings converted into hotels, with rooms of uneven size, narrow staircases and lifts added later
• branded hotels, under franchise or management agreements, more common in the business districts and the suburbs
• larger properties near stations, airports and exhibition centres, where trading depends on groups and trade fairs

A buyer approaches these assets through the operation first and the bricks second. RevPAR and average daily rate are benchmarked against a tight competitive set, at neighbourhood level rather than city level. The ownership structure matters just as much: a business run under a commercial lease in a building owned by a third party is not valued like a hotel sold with its property, or murs et fonds. The guide Asset deal or share deal sets out the options.

In the suburbs, the reading changes. Demand there depends more heavily on one specific driver: a business district, an exhibition centre, an airport. The buyer then looks at how durable that driver is, as closely as at the hotel itself.

What the building allows

In Paris, the building largely dictates what a buyer will be able to do. Three subjects come up in almost every due diligence. They are best documented before going to market.

Heritage protection

Much of the city is covered by protection rules. Near listed monuments, the state heritage architect (architecte des Bâtiments de France) gives an opinion on a wide range of works. The Marais and the 7th arrondissement are covered by conservation plans that are stricter still. An added storey, a change to the facade, a rooftop or courtyard extension can never be taken for granted. A business plan that assumes extra rooms needs a feasibility study behind it.

Permitted use

Paris protects its housing stock. Turning residential premises into a hotel generally requires an authorisation and compensation. Any conversion project, or an extension into neighbouring units, should be reviewed with a property lawyer and the notary, under the rules in force at the date of the transaction.

Fire safety, accessibility, co-ownership

A hotel is a building open to the public (an ERP). In an older building, fire safety and access for people with reduced mobility raise practical questions: corridor widths, lifts, adapted rooms. The latest fire safety committee reports and any waivers belong in the file. Where the hotel occupies only part of the building, the co-ownership rules and the permitted use of each unit fall within the scope of the audit too.

Key point: in Paris, part of the value depends on what the building permits. It is better to document its constraints than to let a buyer find them in the audit.

Many buyers, few assets

Scarcity attracts very different profiles: an institution seeking a liquid, long-term asset, a group that wants an address, a family office, an overseas investor new to the market. That competition is an asset. It is also a temptation: to open the sale widely and see how high the bids go.

The downside is well known. A hotel shown to many buyers and then withdrawn without a deal stays in people’s minds. It is read with suspicion afterwards, and the next negotiation starts from that failure. The guide Why a failed public sale process damages a hotel explains how. A restricted process, with buyers chosen for their criteria and their financial capacity, keeps competitive tension without exposing the asset.

Buyer quality is checked early: identity, beneficial owners, source and proof of funds, financing plan. When expressions of interest are numerous, that screening avoids months spent with a counterparty who will never be able to sign.

Selling without Paris finding out

Among professionals, the Paris market is small. Intermediaries, advisers, banks and operators all know one another. Word of a sale travels fast and eventually reaches the staff, group clients and competitors. The consequences are predictable: people leave, clients hold back on commitments, buyers wait for the price to drop.

Confidentiality is therefore built in the detail.

• A teaser that is genuinely anonymous. In Paris, a star rating, a room count and an arrondissement can be enough to find a hotel on booking platforms within minutes. The location stays at the level of a broad area, capacity is given as a range, and no photograph is recognisable. Someone who knows the neighbourhood runs a re-identification test before anything is sent.
• Competitors described by type. Naming the hotels in the competitive set gives the location away. In the information memorandum, they are described by category and size until the hotel’s identity has been disclosed.
• Two-stage disclosure when the staff must not know: name, address and photographs are released only at the visit or the letter of intent.
• Visits with no contact with the staff, arranged to look like an ordinary meeting or stay.

In some sales, French law requires employees to be informed in advance. The timing is planned with the lawyer, so that the information arrives when intended rather than through a leak.

How we work

We act for the seller only, with one client per transaction and under an exclusive mandate. Each opportunity is presented to qualified buyers one at a time, under a non-disclosure agreement. For a hotel in Paris or the inner suburbs, see our hotel sale advisory service.