Airbnb poses challenge to Paris’s luxury hotels

The home-sharing website Airbnb has taken over Paris like no other city in the world and now it is even giving the capital’s famed deluxe hotels a run for their money.

Airbnb poses challenge to Paris's luxury hotels
Photo: AFP

No other city in the world has more apartments on offer through Airbnb than Paris.

But the home-sharing website that has dramatically altered the tourist accommodation industry is not just providing an alternative to budget hotels.

It is increasingly challenging the luxury market in the French capital, which is not going down well with a hotel industry that has already declared war on the website it accused of providing unfair competition.

Airbnb currently has on offer around 400 apartments in the French capital priced at over €500 a night and of those some 40 are listed at over €1,000 a night.

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” – all for €1,200 a night.

Then there is the Penthouse on the Champs-Elysée that stands opposite the Bristol Hotel and offers “exclusivity in the heart of Paris” for a cool €1,589 a night.

A map shows most of the luxury apartments are located in the ultra-chic west neighbourhoods of the capital around the Champs Elysée and the 16th arrondissement.

The chance of renting a deluxe apartment for a no-expenses-spared stay in the French capital could be a popular option for flushed visitors from the Middle East, the States or Russia, who might usually stay in one of the famed plush hotels like the Ritz or the Bristol.

“The Paris market is going to get very difficult,” Didier le Calvez, managing director of the Bristol told Reuters.

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.”

Airbnb has had a fraught relationship with the hotel industry in Paris.

In February The Local reported how hoteliers penned an open letter to the Prime Minister urging him to even out the competition.

The French Hotel Union UMIH said the key was that the rental sites weren't playing by the same rules when it came to taxes, even though they are essentially offering the same product as hotels.

“Without respect for the rules, our profession, our values, our jobs, and our investments are in danger,” wrote Roland Heguy, the president of the union.

Airbnb’s CEO Brian Chesky visited authorities in Paris earlier this year to reassure Paris them about the merits of his company in boosting tourism.

“I don’t think for us to win [that] anybody has to lose,” he said after the meeting with Deputy Mayor Bruno Julliard

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Local authorities in France get power to crack down on Airbnb rentals

Authorities in Paris and other French towns will be able to regulate local businesses who wish to rent property on Airbnb, according to a decree published by the French government. 

Local authorities in France get power to crack down on Airbnb rentals
This illustration picture taken on July 24, 2019 in Paris shows the logo of the US online booking homes application Airbnb on the screen of a tablet. (Photo by Martin BUREAU / AFP)

The news was welcomed by authorities in Paris, who have long battled to keep a check on Airbnb and its impact on the rental market. 

On Sunday, the French government published a decree that allows the City of Paris to subject the renting of local businesses to prior authorisation. 

This decree applies to all types of offices, stores or medical offices who may be turned in holiday rentals. 

It aims to allow towns to limit the growth of rentals on Airbnb, “protect the urban environment and preserve the balance between employment, housing, businesses and services on their territory,” says the decree. 

The news was welcomed by authorities in Paris, which has been witnessing “the multiplication of ground floor business premises being transformed into holiday rentals,” said deputy mayor Ian Brossat, who is in charge of housing, in a press release

This decree which comes into effect on July 1st, “will prevent local businesses from being turned into holiday rentals,” Brossat added on Twitter.

The conditions businesses will have to meet in order to get an authorisation still have to be defined said Brossat, according to Le Figaro. But Paris aims to draft these regulations and get them voted by the end of 2021, so they can come into force at the beginning of 2022. 

Other towns allowed to apply the decree are those who have put into effect “the procedure of a registration number for furnished holiday apartments, owners and, subject to contractual stipulations, tenants of local businesses who wish to rent them as furnished holiday apartments.” 

In recent years, Paris city authorities have made tax registration obligatory for apartment owners and have restricted those renting out their primary residence to a maximum of 120 days a year.

Now if owners want to rent a furnished property for less than a year to holidaymakers, they must apply to local authorities for permission to change the registered use of the space.

They are then required to buy a commercial property of an equivalent or bigger size and convert it into housing as compensation. 

Until then, these onerous and time-consuming tasks did not apply to local businesses who only had to fill out a declaration.  

In February, France’s highest court, the Court of Cassation, ruled that regulations introduced to counter the effects of Airbnb and other short-term rental sites on the local property market were “proportionate” and in line with European law.