Paris 2024 Olympics: Unexpected Low Tourist Turnout Forces Hotels And Airlines To Halve Prices

As the Paris 2024 Olympic Games approach, set to begin on July 26, the city is experiencing an unexpected trend, a significant shortfall in international tourist numbers, prompting hotels to slash prices.

According to data from Paris je t'aime, the city's tourism board, Paris is expecting 11.3 million visitors during the Olympics, but only 1.5 million of these will be international tourists. This figure, while sufficient to keep stadiums busy, has caused concern for hotels, airlines, and travel agencies that anticipated a tourism boom.

Hotels Condition

Alan Bachand, owner of the sports travel firm 14sb, has faced a steep decline in sales. Known for pre-purchasing blocks of hotel inventory for major events and selling them with ticket packages at competitive prices, Bachand reported an 80 per cent drop in sales compared to the previous Olympic Games. He noted that this is the first time in 25 years that his company will earn less than it spent on hotel rooms contracted 30 months ago.

Sales typically begin a year before the event, but the exorbitant hotel prices-up to 1,000 dollars per night for rooms usually costing 400 dollars-led to lower demand. As the event nears, many providers have halved their prices, hoping to attract last-minute bookings.

Airlines Situation

Airlines are also feeling the pinch. On July 11, Delta Air Lines Inc. estimated 100 million dollars in losses as travellers chose to skip France during the Olympics, resulting in numerous unsold seats. Similarly, Air France-KLM, which increased its flight capacity from US cities to Paris by 15 per cent, reported a revenue loss of at least 180 million euros (195.5 million dollars) in July and August due to the Olympics. Air France has started slashing prices, particularly for bookings with points.

Gilbert Ott, a spokesman for the reward travel search engine point.me, highlighted the availability of discounted reward flights. He found flights on Air France from New York for 20,000 points one-way, Atlanta for 15,000 points one-way, and Los Angeles for 30,000 points one-way. These points translate to roughly 200 dollars, using the typical exchange rate of a penny per point.

Overall, the growth in international flights to Paris for the Olympics is significantly lower than in previous Games. Data from travel analytics company ForwardKeys showed an eight per cent increase in flights to Paris, compared to a 115 per cent increase in flights to Rio de Janeiro during its 2016 Olympics.

The high prices have deterred many travellers, who chose to wait and see how geopolitical events and the French election played out before making a decision. With the opening ceremony just days away, hotels are scrambling to boost occupancy by reducing nightly rates and eliminating minimum stay requirements.

Cutting Prices

The city's hotel industry, including apartment rentals and luxury hotels, has been impacted. Orso Hotels' Director of Operations Gilles Le Bras explained that to stay competitive, many properties have continuously lowered their prices. The boutique group's four-star rated Wallace hotel, close to various Olympic venues, has reduced its rates to 340 dollars per night during the first week of the Games. The Hôtel Dame des Arts, located in the Latin Quarter, is offering a 15 per cent discount for stays between July 26 and August 11.

Paris hotel occupancy during the event is expected to be around 80 per cent, according to CoStar data from June 26. This is lower than the occupancy rates of 88.6 per cent in London in 2012 and 94.1 per cent during Rio 2016.

Not all hotels are cutting prices. Generator, which offers a mix of hostel and traditional hotel rooms, has maintained higher rates. Its CEO Alastair Thomann reported that a bed in a large dorm room costs around 76 euros per night, double the previous year's price, while private rooms are 205 euros, a 72 per cent increase from 2023.

With the high planning required for Olympic events, a sudden influx of tourists is unlikely. Families and friends of athletes, who secured spots on national teams recently, have already made their travel plans.

Bachand remains hopeful of breaking even if he can sell just 100 more hotel rooms, taking advantage of last-minute deals. While the event has been a disappointment for his business, he is looking ahead to next year's Super Bowl.