Greater Paris hotels posted RevPAR of €116 in H1 2026, up 3.7% year-on-year, while the investment market recorded €845 million across 21 hotel transactions — a figure heavily distorted by a single asset, the Pullman Tour Eiffel.

The half-year results point to an operating market climbing on occupancy rather than rate, and a transaction market where volume masks a sharp decline in activity.

How strong is hotel performance in Greater Paris?

Greater Paris closed H1 2026 with an average daily rate (ADR) of €160, occupancy of 73%, and RevPAR of €116, a 3.7% increase versus H1 2025. The gains came almost entirely from occupancy, which improved by 1.8 percentage points.

ADR stayed flat, running just below the inflation rate — meaning operators priced conservatively while filling more rooms.

Inner Paris outperformed the wider market. The intra-muros segment reached RevPAR of €180, up 3.1% against H1 2025, driven by:

• ADR of €223, up 1.8%, broadly in line with inflation
• Occupancy up 1.1 points year-on-year

What is happening in the investment market?

Transaction volume reached approximately €845 million in H1 2026, spread across 21 hotels representing 1,661 rooms. But activity declined sharply in both the number of hotels sold and rooms transacted.

The headline volume is misleading: the Pullman Tour Eiffel deal drives both the total and the average price per key. Excluding that single transaction, the average price per key stands at €291,000 — broadly in line with H1 2025.

Half of the transactions involved upper-upscale hotels, underscoring where liquidity is concentrating.

Where are yields heading?

Prime yields broadly stabilized over the half, generally ranging between 4.75% and 5.25% in Paris, reflecting a more balanced investment environment and sustained appetite for core assets.

Compression has appeared in one segment: smaller trophy assets in prime Parisian locations. Hotel Fauchon, a 54-room property in the 8th Arrondissement, illustrates the trend.

In these competitive situations, pricing is increasingly driven by private equity, family offices and real estate funds — buyers willing to accept tighter yields to secure rare, best-in-class opportunities.

Why is new supply staying scarce?

Supply growth remains constrained by land scarcity, strict building regulations, and high construction and financing costs. Conversions of existing buildings now outnumber new developments.

Recent openings confirm a clear upmarket shift:

• Le Bus Palladium, a former iconic Parisian nightclub converted into a 35-room five-star hotel
• Hotel Salvia, a 39-room four-star property created by merging three hotels

Both projects show owners extracting higher segmentation from constrained real estate rather than adding net new keys.

What comes next?

With occupancy gains doing the work that rate increases cannot, and private capital bidding aggressively for rare trophy assets, the second half of 2026 will test whether inner-Paris operators can push ADR ahead of inflation while the broader transaction market adjusts to sharply lower deal counts.