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The highly anticipated 2024 Summer Olympics may have drawn global attention to Paris, but for the city’s short-term rental (STR) market, the event triggered a significant downturn in profitability. A surge in “have-a-go hoteliers” eager to capitalize on the influx of visitors has led to a 24% decline in per-property revenue for the vacation rental market compared to 2023. This concerning trend reveals the pitfalls of oversupply in a post-event landscape, according to recent research by eviivo and Key Data, two leading firms in property management and short-term rental analytics.

Olympic Gold Rush Turns Sour

While many Parisians were eager to open their homes to visitors during the Olympics, hoping for a financial windfall, the reality was far less lucrative. From June 1 to August 31, 2024, Paris’ overall STR occupancy dropped by 4.9% year-over-year, with occupancy rates averaging 58%. Revenue per available rental (RevPAR) saw a dramatic 24% plunge, settling at just €151.

This decline occurred despite a temporary surge in demand during the Games, from July 26 to August 11. The Games drove a 229% increase in STR bookings, outpacing a 201% rise in available properties. Paid occupancy jumped by 37.5% to 66%, with average daily rates (ADR) rising by 16% to €319. The result was a 37% year-over-year increase in RevPAR during the Olympic period, reaching €210.

However, this boom was short-lived. The post-Games market, weighed down by an influx of new hosts, saw demand falter. Ruth Whitehead, COO of eviivo, remarked, “A surge of have-a-go hoteliers means that the Paris hospitality market is now grappling with the aftermath of a marathon it may not have been expecting.”

The Post-Olympic Hangover

When the Olympic flame was extinguished, Paris’ STR market faced a harsh reality. Between August 12 and August 31, three days after the Paralympics began, demand increased by 166%. Yet this was overshadowed by a 200% increase in supply, resulting in a 10.4% drop in occupancy from 48% to 43%. RevPAR took a significant hit, falling by 23% compared to the same period in 2023.

This post-event dip wasn’t a sudden occurrence. Even before the Games began, from June 1 to July 25, Paris STR demand rose by 151%. However, the surge in new hosts led to a 196% increase in available properties, resulting in an 11.5% decrease in occupancy from 69% to 61% and a 37% drop in RevPAR.

Ruth Whitehead emphasized the situation’s complexity, stating, “Parisians may have thought they were participating in a guaranteed gold rush by renting out their rooms during the Games. But many will have made less money than they would have had they rented out their property during summer 2023.”

A Shift in Guest Behavior

The oversupply of short-term rental properties impacted revenue and led to noticeable changes in guest behaviour. The average booking window was shortened by 31%, dropping from 32 to 22 days. This shift made last-minute bookings easier and decreased the average length of stay, which fell by 21% from 4.9 to 3.9 days, as visitors sought shorter stays to catch specific Olympic events.

This influx of amateur hosts—often inexperienced in managing STR properties—led to price competition and shorter booking windows, which seasoned property managers typically plan for. Professional operators have strategies to adjust pricing when faced with market oversupply. Whitehead explained that experienced property managers often rely on real-time market data to change prices and avoid lengthy low-occupancy periods. However, she added that many amateur hosts struggle to react appropriately without access to such tools, making them vulnerable to sudden market changes.

Challenges for Professional Operators

Professional hosts and hoteliers depend on year-round bookings and are particularly feeling the strain. The overwhelming number of new entrants into the STR market during the Games has saturated the market, leading to longer-term challenges in sustaining demand.

Sally Henry, VP of Business Development EMEA at Key Data, stated, “As the Olympic torch fades, Paris’ hospitality sector is left to rebalance supply with demand. The 2024 Summer Olympics have given us plenty of food for thought, lessons that will prove invaluable when it comes to future high-profile events and seasonal swings.”

Henry’s comments reflect a broader challenge faced by hosts and operators globally, who must carefully manage supply and demand cycles, especially after large-scale events that disrupt the normal flow of tourism. “The key takeaway for managers,” she added, “is that staying competitive requires more than just reacting to big events; it’s about proactively refining strategies to maintain occupancy and profitability, even when the spotlight isn’t shining.”

Lessons for Future Events

The aftermath of the 2024 Paris Olympics offers several important lessons for the global STR market. While major events like the Olympics create short-term booms in demand, they can also lead to prolonged periods of oversupply once the event concludes. Professional property managers can mitigate these risks by employing dynamic pricing strategies and relying on comprehensive market data to make informed decisions.

For future hosts, the takeaway is clear: capitalizing on significant events requires more than just opening doors to guests. As the Paris STR market has shown, oversupply and market saturation can quickly erode profitability, leaving amateur hosts and seasoned professionals grappling with the consequences.

By understanding the dynamics of supply and demand, property managers and hosts in major cities worldwide can better prepare for the inevitable market shifts that accompany large-scale events, ensuring sustained success in peak and off-peak seasons.