The Paris 2024 logo, representing the Olympic Games, is seen near the Eiffel Tower three months before the start of the Paris 2024 Olympic and Paralympic Games on April 21, 2024 in Paris, France.
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For more than 10,000 Olympic athletes, getting to Paris this summer is a dream come true. Thousands of prospective tourists feel differently.
Delta Air Lines says travelers are avoiding the city this summer and booking destinations elsewhere, costing the airline $100 million during an otherwise busy summer for European travel, CEO Ed Bastian said.
Delta’s third-quarter earnings and revenue forecasts fell short of Wall Street expectations after airlines flooded the market with additional flights. The airline reiterated its full-year outlook on Thursday.
“Unless you go to the Olympics, people won’t go to Paris … very few go,” Bastian told CNBC. “Business travel, you know, another type of tourism can go elsewhere.”
Delta has the most service of any US airline to Paris and has a joint venture with Air France. Together, the two carriers have about 70% market share in direct services between the US and France, according to consultancy ICF.
On July 1, Air France-KLM, the parent of Air France, forecast revenues reached 180 million euros ($195.5 million) in the June to August period due to the Olympics.
“International markets show significant avoidance of Paris,” the company said. “Travel between the city and other destinations is also below the usual June-August average, as residents in France appear to be postponing their holidays until after the Olympics or considering alternative travel plans.”
Bastian said Paris demand after the Olympics, which run from July 26 to August 11, will likely be strong. “During the period itself there is a little hesitation,” he said. Air France-KLM had a similar projection.
Delta Airlines check-in desk at Paris-Charles-de-Gaulle Airport.
Bertrand Guay | Afp | Getty Images
One clear deterrent to mid-summer travel to Paris: Hotel room rates are about to skyrocket.
Hotel data firm STR said revenue per available room for luxury hotels in the City of Light will increase by up to 45% in July and August compared to the previous period. Meanwhile, it predicts a 3% to 5% increase in the measurement in London and 2% to 4% in Rome for the same months.
Many travelers had already shifted their European vacations beyond the traditional summer travel season, Delta President Glen Hauenstein said on an earnings call Thursday. This gives airlines the opportunity to earn more revenue outside of traditional peak seasons.
“We’re seeing the season expand as a whole group of people, whether it’s retirees or not, or people with dual incomes and no kids, who don’t have the school concerns,” he said. “It’s actually a better time to go to Europe in September and October than it probably is in July and August when the weather is so hot and everything is so packed.”
He also said Delta is seeing a boom in travel to Japan, thanks in large part to a favorable exchange rate for U.S. tourists.
“When the yen was 83 [per U.S. dollar], it was very difficult to be able to afford to go and see Japan and all the great things that Japan has to offer. With the yen at 160, it’s a very different world for US travelers and they seem to be taking a lot of advantage of that,” Hauenstein said.
Disclosure: CNBC parent NBCUniversal owns NBC Sports and NBC Olympics. NBC Olympics is the US broadcast rights holder for all Summer and Winter Games through 2032.
