Paris hotels will experience short-term pain but a strong recovery to follow, according to HVS London.
The comments came as the French government announced a €18bn rescue plan Thursday to support the tourism sector.
The government will also permit French residents to travel within the country and its overseas departments in July and August for holidays.
Paris was expected to benefit from the Olympic Games in 2024, in addition to plans to invest €2bn in Disneyland Paris.
Maria Coll, consulting & valuation analyst, HVS London, said: “The characteristics of the Paris hotel market from its demand sources to its transport links and supply dynamics will play a significant role in the recovery of the hospitality industry once travel returns.
“We expect domestic demand to recover faster largely due to growth in ‘staycations’ which will shift the balance in the short term. While this will help initially, the gap left by international tourism will present a challenge until international visitors can return. Traditionally high rates in Paris might give hotels operators some room to manoeuvre, with tactical discounting to boost demand, although the city may well miss out on leisure travellers on a budget, who might opt for cheaper destinations.”
While Paris ranked first in the world for its meetings business in 2018, as with most European cities group business and MICE demand is likely to take longer to return. However, visitation will be boosted with the staging of popular events in the city such as the Tennis Open, the biennial Air Show, and the haute couture fashion shows once they resume, although this may well be into 2021.
Paris has a high number of hotel rooms in its pipeline - some 4,000 rooms by 2022. While those under construction are expected to open at some point, the pandemic was likely to delay many new openings, which will be of benefit to existing hotel supply.
“Paris has remained one of the most attractive hotel markets over the past decade, both for visitors and investors and, following a paced return once demand can resume, should continue to be one of the top tourism destinations worldwide.”