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Airbnb gives Paris luxury hoteliers a fright

Aug 09 2015 14:45

Paris - 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 Bristol Hotel. Along with bosses of the city's other "palaces", 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 worry.

Airbnb offers between 380 and 400 Paris properties at over €500 a night. Of those, about 40 charge over €1 000  ($1 090).

Add in the attraction of individuality, anonymity and in some cases extra beds, and that puts them potentially in competition with the €1 000 a night Bristol 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 reckon that capacity will be 60 percent greater in 2018 than a decade earlier.

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

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

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

Host owners "Maxime and Fanny" present a flat they say 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 ($1 860) 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 Ile Saint Louis, an island in the Seine river near the heart of the city whose buildings date mostly from 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.

Not included is the 150 euro cleaning fee. "I do that myself. I get a team to clean, but then I go over in detail the things other people don't do," she told Reuters.

"I really try to make my schedule to get there before the people get there. Then I get to meet them, and I enjoy that because I love them to see who I am, to live in my world."

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

Airbnb says it is not in competition with the palaces.

"It's a totally different thing," said Nicolas Ferrary, director of the company's operation in France. A spokesperson added: "These residences are chosen for the unique experience they offer, but which remain very different from what a luxury hotel can propose."

The super-luxury hotels are not so sure.

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 Francois 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 palaces."

Valerie Bodocco, CEO of My Paris Agency which acts as an intermediary between owners and booking web sites, believes Airbnb is seeing off competitors at the top end of the market.

"We have also been using Wimdu and HouseTrip, but Airbnb is definitely the most important platform for us now as the others have had ups and downs," she said.

Of course Paris is Paris, and for some people being seen there is as important as seeing it.

"The month of June has been pretty good," said the Plaza Athenee's Delahaye. 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, he noted.

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."

airbnb  |  travel and leissure
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