Paris Olympics Impact on Travel: Delta Air Lines Forecasting $100 Million Hit
The excitement of the upcoming Paris 2024 Olympic Games may be a dream come true for over 10,000 athletes, but for Delta Air Lines and potential tourists, it’s a different story. According to CEO Ed Bastian, travelers are shying away from Paris this summer, opting for alternative destinations instead. This shift in travel patterns is expected to cost Delta a significant $100 million during a time that’s typically bustling with European travel.
Delta’s third-quarter profit and revenue forecast fell short of Wall Street expectations as airlines flooded the market with additional flights. Despite this setback, the airline remains firm in its full-year outlook. With the most service to Paris among U.S. airlines and a joint venture with Air France, Delta and its partner hold a dominant 70% market share in nonstop services between the U.S. and France.
July 1 saw Air France-KLM, the parent company of Air France, projecting an estimated revenue loss of up to 180 million euros ($195.5 million) from June to August due to the Olympics. International markets are showing a noticeable avoidance of Paris during this period, with travelers either postponing their trips or exploring other vacation destinations.
One factor contributing to the decrease in Paris-bound tourists is the expected surge in hotel room prices during July and August. STR, a hotel-data firm, forecasts a staggering 45% increase in revenue per available room for upscale hotels in the City of Light compared to the previous year. In comparison, London and Rome are estimated to see more modest increases during the same period.
Despite the challenges faced by the traditional peak travel season, Delta’s president, Glen Hauenstein, points out a silver lining. Many travelers are extending their European vacations beyond the summer months, presenting airlines with opportunities to generate revenue outside of the usual peak season. Additionally, favorable exchange rates are driving increased travel to destinations like Japan, where U.S. tourists are taking advantage of the current financial benefits.
As the Paris Olympics draw near, the short-term impact on travel patterns may be evident, but the outlook for post-Olympics demand remains optimistic. Stay tuned for more updates on the evolving travel landscape and the financial implications for airlines like Delta Air Lines.
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