The Paris 2024 logo, representing the Olympic Games, is displayed 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, reaching Paris this summer is a dream come true. Thousands of potential tourists feel differently.
Delta Air Lines says travelers are avoiding the city this summer and booking for destinations elsewhere, amounting to a $100 million hit to the airline during an otherwise busy summer for European travel, CEO Ed Bastian said.
Delta’s third-quarter profit and revenue forecast fell short of Wall Street expectations as the airline flooded the market with added flights. The airline reiterated its full-year outlook on Thursday.
“If you’re not going to the Olympics, people aren’t going to Paris … very few are going,” Bastian told CNBC. “Business travel, you know, another type of tourism is potentially going elsewhere.”
Delta has the most services of any US airline to Paris and maintains a joint venture with Air France. Together, the two operators have roughly 70% of the market in nonstop service between the US and France, according to consulting firm ICF.
On July 1, Air France-KLM, the parent of Air France, forecast revenue of up to 180 million euros ($195.5 million) in the June to August period due to the Olympics.
“International markets show a significant shift away from 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, is likely to 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 obvious drawback to midsummer travel to Paris: Hotel room prices are set to skyrocket.
Hotel data firm STR said revenue per available room for luxury hotels in the City of Light will rise by up to 45% in July and August from the year-ago period. Meanwhile, it predicts a 3% to 5% increase in metrics in London and 2% to 4% in Rome for the same months.
Many travelers were already moving their European vacations beyond the traditional summer travel season, Delta President Glen Hauenstein said on an earnings call Thursday. This gives airlines a chance to earn more revenue outside of traditional peak seasons.
“We see the season expand as a whole group of people, whether or not they’re retired, whether or not they’re dual-income earners and no kids, who don’t have the worries of school,” he said. “It’s actually a better time to go to Europe in September and October than it is potentially 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, largely thanks to a favorable exchange rate for American tourists.
“When you were 83 [per U.S. dollar], it was very difficult to be able to afford to go see Japan and all the wonderful things that Japan has to offer. With the yen at 160, it’s a very different world for American 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.