The 2024 Olympics in Paris brought a wave of new Airbnb hosts hoping to cash in on the influx of visitors, but this resulted in a significant oversupply of vacation rentals and ultimately a decline in revenue for many operators. According to a study by eviivo and Key Data, a leading short-term rental analytics firm, the vacation rental market in Paris experienced a 24% drop in revenue per property this summer compared to 2023. This surge in supply outpaced demand, causing a challenging situation for existing hosts.
Despite the challenges, the Olympics undeniably boosted Paris’s hospitality sector. Demand for short-term rentals soared by a whopping 229%, while the number of available properties increased by 201%. This influx led to a 37.5% rise in occupancy and a 16% increase in average daily rates, resulting in a 37% year-over-year increase in revenue per available room. However, the oversupply issue began to emerge even before the Games officially started. Between June 1st and July 25th, supply rose by 196%, significantly outpacing the 151% increase in demand. This imbalance led to an 11.5% drop in occupancy and a 37% decline in revenue per available room compared to the same period in 2023.
The oversupply issue also affected booking patterns. The average booking window shortened by 31%, from 32 days to 22, making last-minute bookings more accessible. This shift, combined with the preference for shorter stays to attend specific events, resulted in a 21% reduction in average stay length, dropping from 4.9 to 3.9 days compared to the previous year.
The post-Olympics period saw a continuation of this trend. From August 12th to August 31st, demand rose by 166%, but supply surged by 200%, leading to a decrease in occupancy by 10.4% and a 23% drop in revenue per available room compared to the same period last year. The study highlights the significant challenges the broader hospitality industry faces in managing the aftermath of major events, particularly when it comes to balancing supply and demand effectively. While the Olympics provided a boost to the Paris hospitality sector initially, the oversupply of vacation rentals has resulted in a significant drop in revenue for many operators, underscoring the importance of carefully managing market fluctuations after major events.
