I. A Market That Remains Dynamic, but Less Homogeneous

Tourist residences occupy a unique position within the commercial lodging sector. They offer furnished accommodations—operated either year-round or seasonally—with shared services and amenities, all managed by a single operator. This model differs both from hotels—due to the self-contained nature of the units and the possibility of longer stays—and from scattered furnished tourist accommodations, which are often managed as part of individual real estate portfolios. This definition is based on Article D. 321-1 of the Tourism Code 1.

Following the disruptions caused by the health crisis, tourist visitation has rebounded. In the third quarter of 2025, occupancy at collective tourist accommodations in France rose by 2.9% year-over-year, and tourist residences contributed to this positive trend. 2 The 2024–2025 winter season was also deemed satisfactory for tourist residences, with an average occupancy rate of 63%, up one percentage point from the previous season, according to Atout France and the ANMSM. 3

However, this growth should not obscure the disparities between regions and property types. Tourist residences located in major metropolitan areas, well-connected mountain resorts, and coastal destinations that attract international guests have significant advantages. Conversely, establishments that rely on a single season, a domestic clientele, or a property portfolio that is rarely updated remain more vulnerable to fluctuations in demand and household spending decisions.

Foreign guests are now a key supporting factor. INSEE notes that non-resident guests continued to drive tourist visitation in 2025, while resident guests remain the majority in shared accommodations. 4 This situation favors accommodations that can offer a clear, well-presented selection on booking platforms and cater to a variety of customer segments, including families, business travelers, and international visitors.

II/ The Main Drivers of Growth

The sector’s primary growth driver stems from the versatility of the product. An apartment with a kitchen, living space, and shared amenities can accommodate stays ranging from a few nights to several weeks. This flexibility is particularly well-suited to families, groups, mobile workers, and guests seeking a middle ground between a hotel and a traditional rental.

The growth of aparthotels illustrates this trend. According to data cited by the specialized business press, the number of residences offering studios or apartments with kitchens has risen sharply in France over the past decade, as has the number of overnight stays. 5 This trend reflects changing patterns of use, with growing demand for accommodations that offer more independence, are better equipped, and are suitable for stays that combine leisure and business.

The second driver lies in the professionalization of distribution. Operators now combine direct bookings, online agencies, specialized distribution networks, corporate clients, and local partnerships. This diversification improves commercial visibility, but it also increases customer acquisition costs and dependence on intermediaries who take a cut of the profit margin.

The third driver is linked to the renewal of the product offering. The most successful residences no longer limit themselves to offering furnished housing. They are developing additional services, such as dining, workspaces, sports activities, concierge services, equipment rentals, or bundled offers with local partners. The economic value of the product therefore depends increasingly on the quality of operations and the customer experience, rather than solely on property ownership.

III/ A Business Model Under Pressure

The sector nevertheless remains exposed to a structural contradiction. Investor-owners often expect significant predictability regarding rents and operating expenses, while operators bear the direct burden of fluctuations in occupancy, marketing costs, personnel expenses, maintenance work, and renewal investments.

This tension is exacerbated when residences have been marketed on the basis of rental returns presented as relatively secure. When actual performance no longer covers contractual rent, operators may seek to renegotiate leases, reduce rent, return certain units, or change the residence’s market positioning. The DGCCRF has already noted in the sector that managers facing insufficient revenue have negotiated rent reductions with property owners. 6

The aging housing stock is another source of vulnerability. After several years of operation, the residences must finance the renovation of apartments, the replacement of furnishings, the upgrading of common facilities to meet current standards, and improvements to their energy efficiency. These projects can be difficult to organize in complexes owned by a multitude of co-owners, especially when the interests of investors, the operator, and the co-owners’ association do not align.

The issue of financing has also become more sensitive. Rising borrowing costs and investor caution are reducing the ability to finance new projects based solely on the prospect of guaranteed rent. The market is therefore gradually shifting toward renovation, the restructuring of existing assets, and projects in locations with proven tourist demand.

IV/ A More Stringent Legal Framework

The tourist residence model is frequently based on a condominium structured around a single operator. Article D. 321-2 of the Tourism Code specifically provides for a long-term obligation to rent out at least 70% of the furnished residential units, for a period of no less than nine years, as well as management of the entire residence by a single natural or legal person 7.

This structure limits the individual freedom of the co-owners, but it is essential to the commercial coherence of the establishment. The Court of Cassation, however, reiterated in 2025 that the requirement for a single operator does not necessarily extend to the entire condominium when only a portion of the premises legally falls under the category of a tourist residence. An overly broad interpretation of the co-ownership regulations may therefore be invalidated if it prohibits any independent rental, whereas the single-operator requirement applies only to a portion of the units 8.

Financial transparency is another key consideration. The operator of a classified tourist residence must maintain separate operating accounts for each residence and provide them to owners upon request. The operator must also provide all owners annually with a financial statement detailing, in particular, occupancy rates, significant events, and changes in the main expense and revenue categories 9.

Recent case law confirms the operational nature of this obligation. Courts have ordered the disclosure of accounts and financial statements in disputes between owners and operators. However, on May 21, 2025, the Court of Cassation clarified that the operating statement required by Article L. 321-2 of the Tourism Code must show operating expenses and revenues, without being confused with a comprehensive income statement that includes financial, extraordinary, or depreciation items 10.

Commercial leases also remain a key component of the model. Leases entered into between owners and operators of tourist residences must have a minimum term of nine years and may not, in principle, be terminated upon the expiration of a three-year period 11. The Court of Cassation has, however, ruled that this rule does not apply in the same way to renewed leases, for which the option to terminate after three years may once again apply 12. The wording of the lease, its history, and the date of its renewal are therefore decisive.

V. The Impact of Regulations on Furnished Vacation Rentals

The tourist residence sector operates in a competitive environment marked by the growth of short-term rentals. The law of November 19, 2024, strengthened the powers of municipalities and condominium associations to regulate furnished tourist accommodations. In particular, it allows for greater oversight of local permits, strengthens reporting requirements, and improves monitoring of rentals offered through online platforms. 13

This development may indirectly benefit professional tourist residences. By tightening restrictions on certain unregulated tourist rentals, it narrows part of the regulatory gap between professionally operated accommodations and individual rentals. However, it does not eliminate competition from online platforms nor does it guarantee an automatic shift in demand toward tourist residences.

Condominium associations are themselves becoming more actively involved. Condominium bylaws established since November 21, 2024, must explicitly state whether furnished tourist rentals are permitted or prohibited. 14. When a unit is registered as a furnished tourist rental, the co-owner or authorized tenant must notify the property manager, who will add an informational item to the agenda of the next general meeting 15.

However, a distinction must be made between a classified tourist residence—which is subject to organized management and a specific regulatory framework—and a tourist rental operated on an individual basis. Regulations governing short-term rentals do not automatically transform a condominium into a tourist residence and do not exempt operators from complying with rules regarding classification, the building’s intended use, commercial leases, and collective management.

VI/ Outlook for the Coming Years

The most likely scenario is one of consolidation within the sector. Operators with a strong brand, an efficient distribution network, investment capacity, and a diversified portfolio should be better positioned to weather the storm. Stand-alone, aging properties or those located in secondary markets, on the other hand, will have to choose between extensive renovation, commercial repositioning, repurposing, or exiting the tourism model.

The sector’s future will also depend on its ability to move away from a guaranteed-rent model that is disconnected from actual operating performance. Relationships between owners and operators will need to better incorporate tourism cycles, renovation expenses, transparency requirements, and risk-sharing mechanisms. Recent legal disputes show that the disclosure of operating data has become a central issue in the contractual relationship.

Tourist residences nevertheless have significant advantages. They meet a demand for flexibility, can accommodate various types of guests, and help professionalize the tourism offering in regions where traditional hotels are not always suitable. Their competitiveness will depend less on the proliferation of real estate developments than on the quality of their locations, the financial strength of the operators, and the ability to maintain the assets to a high standard.

Conclusion

The vacation residence sector is not in a general crisis, but it is undergoing a period of consolidation. Tourism demand remains strong, and these residences are well-positioned to meet new travel trends. However, achieving profitability is more challenging, renovation costs are high, and the legal framework governing relationships between operators, owners, and condominium associations has become more stringent.

The main challenge now is to align the real estate model with the economic realities of operations. This requires sufficiently accurate financial information, carefully drafted leases, clear governance of the condominium association, and a proactive renovation strategy. Stakeholders capable of meeting these conditions will be able to capitalize on the growth in tourist demand, while models based on guaranteed rents, aging assets, and limited transparency will remain vulnerable to an increase in renegotiations and legal disputes.

 

Sources

  1. Article D321-1 of the Tourism Code — In effect since July 9, 2010 • https://www.legifrance.gouv.fr/codes/article_lc/LEGIARTI000022450804
  2. In the third quarter of 2025, occupancy at collective tourist accommodations increased by 2.9% year-over-year – Quick Facts – 286 | INSEE • www.insee.fr
  3. www.atout-france.fr • https://www.atout-france.fr/sites/default/files/2025-06/Note%20conjoncture%20Mai%202025_%20version%20adh%C3%A9rents.pdf
  4. 2025 Summer Tourism Season – INSEE Focus – 363 • www.insee.fr
  5. Client Challenge • www.lemonde.fr
  6. www.economie.gouv.fr • https://www.economie.gouv.fr/dgccrf/laction-de-la-dgccrf/les-enquetes/investissements-dans-les-residences-de-tourisme
  7. Article D321-2 of the Tourism Code — Effective as of January 16, 2026 • https://www.legifrance.gouv.fr/codes/article_lc/LEGIARTI000053371279
  8. Court of Cassation, Third Civil Chamber, October 16, 2025, No. 24-14.303 • https://www.legifrance.gouv.fr/juri/id/JURITEXT000052484739
  9. Article L321-2 of the Tourism Code — Effective as of July 25, 2009 • https://www.legifrance.gouv.fr/codes/article_lc/LEGIARTI000020898030
  10. Court of Cassation, Commercial, Financial, and Economic Chamber, May 21, 2025, No. 24-12.695 • https://www.legifrance.gouv.fr/juri/id/JURITEXT000051661502
  11. Article L145-7-1 of the Commercial Code — Effective as of July 25, 2009 • https://www.legifrance.gouv.fr/codes/article_lc/LEGIARTI000020898001
  12. Court of Cassation, Third Civil Chamber, November 16, 2023, No. 22-14.091 • https://www.legifrance.gouv.fr/juri/id/JURITEXT000048430351
  13. Vacation Rentals: New Rules in 2025? • www.service-public.gouv.fr
  14. Article 8-1-1 of Law No. 65-557 of July 10, 1965, establishing the status of co-ownership of buildings — Effective as of November 21, 2024 • https://www.legifrance.gouv.fr/codes/article_lc/LEGIARTI000050617303
  15. Article 9-2 of Law No. 65-557 of July 10, 1965, establishing the status of co-ownership of buildings — In effect since November 21, 2024 • https://www.legifrance.gouv.fr/codes/article_lc/LEGIARTI000050618105