The Paris Olympics are set to kick off on July 26th, but the anticipated tourist boom hasn’t materialized as expected. While the city anticipates 11.3 million visitors during the Games, the majority, a whopping 9.8 million, are expected to be French. International visitors are expected to number a mere 1.5 million, leaving travel businesses feeling the pinch.
Hotels and Airlines: A Battle for Occupancy and Revenue
Sports travel firms like 14sb, which typically pre-book hotel rooms for major events, have seen sales plummet by 80% compared to previous Olympic Games. Alan Bachand, the company’s owner, says this is the first time in 25 years he’s facing the prospect of losing money on pre-booked hotel rooms due to a lack of demand.
The reason? Hotels initially set exorbitant prices, prompting potential visitors to wait for discounts. This price gouging backfired as travellers, unwilling to pay inflated rates, opted to wait and see how events unfolded.
Airlines, too, are struggling with unsold seats. Delta Air Lines Inc. predicts a $100 million loss due to reduced demand, while Air France-KLM has reported a staggering €180 million revenue loss in July and August. To salvage some revenue, both airlines have implemented hefty discounts, particularly for those using points.
A Last-Minute Rush? Don’t Hold Your Breath!
Despite the discounts, industry experts aren’t expecting a last-minute surge in tourism. Point.me, a reward travel search engine, reports a glut of award flight availability for late July and August, suggesting a lack of demand. Data from ForwardKeys, a travel analytics company, shows international flights to Paris have only grown by 8% year-over-year, a far cry from the 115% growth experienced during the Rio Olympics in 2016.
The lack of last-minute bookings is likely due to several factors. Firstly, the high initial prices have deterred many potential travellers. Secondly, many are waiting to assess the geopolitical landscape and safety concerns. And lastly, many families and friends of athletes have already secured their travel arrangements.
Hotels Feel the Pressure, Prices Plummet
With the Games just around the corner, hotels are scrambling to boost occupancy. Across the city, from apartment rentals to luxury hotels, nightly rates are being slashed and minimum stay requirements are being eliminated. This price war comes amidst a record year for European tourism, fueled largely by American visitors.
Despite the discounts, hotel occupancy levels during the Olympics are projected to hover around 80%, significantly lower than the 88.6% and 94.1% achieved during London 2012 and Rio 2016 respectively. The only winners in the hotel sector are those who never inflated their prices, like Generator, a budget-friendly hostel chain.
A “Miss” for Some, a Hope for Others
While some travel businesses have already written off the Paris Olympics as a “miss”, others are clinging to hope. Alan Bachand believes that a last-minute surge in bookings is still possible and that he can break even with just 100 additional hotel room sales. However, with just weeks before the opening ceremony, time is running out.
The Paris Olympics may not be the windfall travel businesses had hoped for, but with the Games soon underway, the ultimate impact on tourism will be clear in the coming weeks.
