Focus on France Ian Sparks reports from Paris

EURO-REPORT

FOCUS ON... France

Ian Sparks report from Paris on new competition for hotels and railways.

The bosses of Paris’s luxury hotels are demanding that the French government clamp down on the Airbnb home letting website which they claim is now stealing their wealthiest clients.

Three years ago there were just 7000 properties for rent on the property site across the whole of France. But today there are 50,000 flats and houses to let on the site in Paris alone, making the city the world’s top Airbnb destination.

The site is also increasingly attracting wealthy renters, and currently offers around 400 Paris apartments at over 500 euros a night and, of those, about 40 charge over 1000 euros. In comparison, Paris’s seven most luxurious hotels have less than 2000 rooms in total, with many rooms costing up to 2000 euros a night and suites costing in excess of 10,000 euros a night.

Although private landlords on the website must pay income tax on any revenue they earn on Airbnb, hotels complain they are not subjected to other taxes and social charges which they have to pay.

The Paris luxury sector is already worried about a surge in competition from newly opening hotels, a downturn in visits from wealthy Russians and Brazilians as their economies falter, and fears among US visitors of rising anti-semitism in France.

As a result of the competition, the Bristol Hotel suffered a 20 per cent drop in revenue in the first half of this year and an occupancy rate that fell to 61.2 per cent from 69.2. The renowned Four Seasons George V saw a 5 percentage point drop in occupancy to 66 percent in the same period. These factors saw The Plaza Athenee cut its prices by 20 per cent last winter.

At the same time, maid and concierge services and other extras are all available along on some of the most expensive Airbnb properties in Paris. One flat available 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’ for 1400 euros a night. The same floor space at the George V Hotel would cost around 8000 euros.

Didier le Calvez, managing director of the French capital’s famed Bristol Hotel, said: “Airbnb is a menace that enjoys an unfair advantage. The Paris market is going to get very difficult.”

François Delahaye, managing director of the Plaza Athenee, said: “It’s a tax attack on our livelihoods. Although Airbnb landlords 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.”

And Jose Silva, who runs the Four Seasons George V, added: “It’s obvious that a large part of our clientele, especially the families, will abandon the hotels.

“The best way for the hotel industry to respond is for us to keep raising our game. Wealth and world demand is going to keep on growing, so hotels should continue to offer a radically different experience to a bed and breakfast.”

But Airbnb has insisted that it is not in competition with the French capital’s hotels. A spokeswoman for the website said: “We offer a totally different thing. These residences are chosen for the unique experience they offer, but which remain very different from what a luxury hotel can propose.”

Earlier this year, Airbnb’s CEO Brian Chesky also paid a visit to the capital to reassure Paris city officials that his company has only boosted tourism to the city. He said after the meeting with Deputy Mayor Bruno Julliard: “I don’t think that for us to win, anybody has to lose. Airbnb chiefly serves as an alternative for those who struggle to find low cost accommodation and who would otherwise not be able to afford visiting Paris.

Mayor Julliard agreed, saying: “Airbnb has become an essential offering for accommodation in Paris, especially for younger tourists. Whatever anyone says, it has only boosted the number of visitors to Paris, and for us that is a good thing.”

Boost for coach travel

This year has also seen a resurgence in France’s coaching industry as the government finally lifts rules that for decades have protected the state-run SNCF rail company from competition.

The opening up of the country’s coach sector is just one of the outcomes of the Macron Law, a new economic bill designed to modernise the French economy, speed up growth and deregulate many industries. Several coach companies are already cashing in on the new rules, with 250 new routes now available across France and into Germany, Amsterdam, Spain and Brussels.

Prior to the change in law, bus services usually only covered routes for which there was no train connection, and are sometimes run by or for the SNCF. But now, the most popular coach journeys are between Paris and other major French and European cities such as London, Amsterdam, Brussels, Barcelona, Lyon and Marseille. Facilities on the coaches are also improving, with reclining seats, air conditioning, toilets, Wi-Fi, entertainment and disabled access all now standard.

The GoEuro travel website says the deregulation of the market will see a 10–70 per cent drop in ticket prices over the next year as more operators cash in on the changes. The move is expected to bring in over five million new coach passengers within the next year, resulting in the creation of an extra 22,000 jobs.

A spokesman for France’s coaching industry union said: “We have always been competitive and had the potential to rival the railways but until now were prevented from doing so. The rule changes have been a major boost to our industry, bringing wealth and employment to thousands.” n