Air France loses $193 million due to Paris Olympics tourist numbers drop

HThe cancellation of the 2024 Summer Olympics in Paris will not help the bottom line of France's national airline. Air France said Monday it expects to lose up to 180 million euros ($193 million) in the current fiscal quarter as tourists avoid Paris during the Olympics, which run from July 26 to August 11, 2024.

Tourists have not flocked to the capital for the Olympics, fearing crowds and rising prices. “International markets are significantly avoiding travel to Paris,” the airline said in a statement. “Travel between Paris and other destinations is also below the usual June-August average, as French nationals appear to be postponing their holidays until after the Olympics or considering alternative travel plans.”

As a result, Air France-KLM expects a “significant negative impact of between 160 million and 180 million euros on future unit revenues for the period June-August 2024.” The airline expects travel to France to normalize after the Olympics, with “demand levels expected to improve at the end of August and September.”

By comparison, Air France-KLM reported third-quarter 2023 revenues of more than $9.3 billion thanks to strong summer demand.

Air France's statement is in line with data from the Paris Tourism Board, which recently projected a 14.8% drop in the number of international visitors in July 2024 compared to the same month in 2023.

The same trend is being seen in the hotel industry. According to CoStar's latest Forward STAR data, with just one month until the start of the Summer Olympics, occupancy rates in Paris hotels peaked at 77.8% on the night of Saturday, July 27, when the 14 gold medal events will be held. This was followed by opening day, Friday, July 26, with occupancy at 77.7%. The lowest occupancy rate during the Summer Olympics this year was 59.8% on the final day of competition, Sunday, August 11.

However, occupancy rates for the entire Olympics period will be below the average of 81.4% in July 2023, as reported by France's official statistics agency INSEE.

Despite all this, the 2024 Summer Olympics is expected to be a positive for Paris, It generated 8.9 billion euros ($9.6 billion) in economic benefits for the city, Independent Research The report comes from the Centre for Sports Law and Economics (CDES), which has been monitoring the Paris Games for the International Olympic Committee (IOC) and Paris Olympic organizers.

Between 2.3 million and 3.1 million ticket-holder tourists are expected to visit Paris during the Olympics, about two-thirds of whom will be French, and domestic and international visitors are expected to spend $2.8 billion, according to the Paris Tourist Board.

Then add in corporate and private funding: Most of the $7.5 billion in funding for the Paris Games will come from media rights, sponsorship and ticket sales, but there will also be significant private investment in long-term infrastructure projects, including a $1.7 billion contribution from the IOC.

An additional $3.2 billion in public funds are being pumped into projects that address the long-term needs of the community, with 80 percent of this going to Saint-Denis, one of France's poorest Paris suburbs. Home to France's national soccer and rugby stadium, the Stade de France, Saint-Denis also houses the Olympic Village, which will be transformed into 2,800 homes and two new schools after the Summer Games.

Tourism experts say travelers will likely return to Paris quickly once the Olympics are over. “The drop in demand during the early summer months can be seen as a temporary adjustment,” said Christina Schweferty, senior account manager at STR, which provides hotel analytics and benchmarking data. “In the longer term, the Olympics will further solidify Paris' position as a major tourist destination and could attract even more demand in the future.”

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *