This photo taken in Paris on March 3, 2024, shows the silhouette of the Eiffel Tower and the city skyline under a cloudy sky.
Stefano Lelandini | AFP | Getty Images
For more than 10,000 Olympians, going to Paris this summer is a dream come true. But thousands of potential tourists won’t see it that way.
Delta Airlines CEO Ed Bastian said travelers are avoiding London this summer and booking other destinations, costing the company $100 million in losses during what would normally be a busy summer for European travel.
Delta Air Lines’ third-quarter profit and revenue outlook fell short of Wall Street expectations as the airline added a ton of flights to the market, and the company reiterated its full-year outlook on Thursday.
“No one is going to Paris unless they’re going to the Olympics. Very few people are,” Bastian told CNBC. “Business travel, other types of tourism will probably go elsewhere.”
Delta Air Lines flies more frequently to Paris than any other U.S. airline and has a joint venture with Air France that together account for about 70% of the market for nonstop flights between the U.S. and France, according to consulting firm ICF.
Air France’s parent company, Air France-KLM, said on July 1 that it expected the Olympics to reduce its revenue by up to 180 million euros ($195.5 million) from June to August.
“International markets are largely avoiding travel to Paris,” the company said. “Travel between Paris and other destinations is also below the usual June-August average as French nationals postpone holidays until after the Olympics or consider alternative travel plans.”
Bastian said demand for Paris will likely be strong after the Olympics, which run from July 26 to Aug. 11. “There will be a bit of hesitation during the Olympics,” he said. Air France-KLM made a similar prediction.
One obvious deterrent to traveling to Paris in midsummer is that hotel prices are set to skyrocket.
Hotel data firm STR said luxury hotel revenue per room in Paris jumped 45% in July and August last year, while it forecast increases of 3-5% in London and 2-4% in Rome for the same months in 2023.
Delta Air Lines President Glenn Hauenstein said on an earnings call Thursday that many travelers are already rescheduling their European vacations to outside the usual summer travel season, giving airlines the opportunity to make more money outside of traditional peak seasons.
“We’re seeing everyone, whether they’re retired or not, whether they’re working and don’t have kids, who don’t have to worry about school, extending their travel season,” he said. “In fact, September and October are better times to go to Europe because July and August are so hot and everything is so crowded.”
He also said Delta is seeing a surge in travel to Japan thanks to favorable exchange rates for American tourists.
“When the yen is 83 yen [per U.S. dollar]”It’s been very difficult to afford to go to Japan and experience all the great things it has to offer. With the yen at 160 it’s a whole different world for American travelers and they seem to be taking great advantage of it,” he said.
Disclosure: CNBC’s parent company, NBCUniversal, owns NBC Sports and NBC Olympics, which holds the U.S. broadcast rights to all Summer and Winter Olympic Games through 2032.
