Delta says the Olympics will cost it $100 million as travelers skip Paris

For
more
than
10,000
Olympic
athletes,
making
it
to
Paris
this
summer
is
a
dream
come
true.
Thousands
of
potential
tourists
feel
otherwise.

Delta
Air
Lines
says
travelers
are
avoiding
the
city
this
summer
and
booking
to
destinations
elsewhere,
amounting
to
a
$100
million
hit
for
the
airline
during
an
otherwise

bustling
summer
for
European
travel,
CEO
Ed
Bastian
said.

Delta’s
third-quarter
profit
and
revenue
forecast

fell
short
of
Wall
Street
expectations
after
airlines
flooded
the
market
with
added
flights.
The
airline
reiterated
its
full-year
outlook
on
Thursday.

“Unless
you’re
going
to
the
Olympics,
people
aren’t
going
to
Paris
…
very
few
are,”
Bastian
told
CNBC.
“Business
travel,
you
know,
other
type
of
tourism
is
potentially
going
elsewhere.”

Delta
has
the
most
service
of
any
U.S.
airline
to
Paris
and
holds
a
joint
venture
with
Air
France.
Together,
the
two
carriers
have
approximately
70%
market
share
in
nonstop
service
between
the
U.S.
and
France,
according
to
consulting
firm
ICF.

On
July
1,
Air
France-KLM,
the
parent
of
Air
France,

forecast
a
revenue
hit
of
as
much
as
180
million
euros
($195.5
million)
in
June
through
August
because
of
the
Olympic
Games.

“International
markets
show
a
significant
avoidance
of
Paris,”
the
company
said.
“Travel
between
the
city
and
other
destinations
is
also
below
the
usual
June-August
average
as
residents
in
France
seem
to
be
postponing
their
holidays
until
after
the
Olympic
Games
or
considering
alternative
travel
plans.”

Bastian
said
Paris
demand
after
the
Olympics,
which
run
July
26
through
August
11,
will
likely
be
strong.
“During
the
period
itself
there’s
a
little
bit
of
a
hesitation,”
he
said.
Air
France-KLM
had
a
similar
projection.

One
clear
deterrent
for
mid-summer
travel
to
Paris:
Prices
for
hotel
rooms
are
set
to
skyrocket.

Hotel-data
firm
STR
said
revenue
per
available
room
for
upscale
hotels
in
the
City
of
Light
will
soar
as
much
as
45%
in
July
and
August
from
the
year-earlier
period.
Meanwhile,
it
forecasts
a
3%
to
5%
increase
in
the
metric
in
London
and
2%
to
4%
increase
in
Rome
for
the
same
months.

Many
travelers
were
already
shifting
their
European
vacations
beyond
the
traditional
summer
travel
season,
Delta’s
president,
Glen
Hauenstein,
said
on
an
earnings
call
on
Thursday.
That
gives
airlines
a
chance
to
earn
more
revenue
outside
of
traditional
peak
seasons.

“We
see
the
season
extending
as
a
whole
group
of
people,
whether
or
not
it’s
retirees,
whether
or
not
it’s
people
with
double
incomes
and
without
children,
who
don’t
have
the
school
concerns,”
he
said.
“It’s
actually
a
better
time
to
go
to
Europe
in
September
and
October
than
it
is
potentially
in
July
and
August
when
the
weather
is
so
hot
and
everything
is
so
packed.”

He
also
said
Delta
is
seeing
a
boom
in
travel
to
Japan,
thanks
in
large
part
to
a
favorable
exchange
rate
for
U.S.
tourists.

“When
the
yen
was
83
[per
U.S.
dollar],
it
was
very
difficult
to
be
able
to
afford
to
go
see
Japan
and
all
the
great
things
that
Japan
has
to
offer.
With
the
yen
at
160,
it’s
a
very
different
world
for
U.S.
travelers
and
they
seem
to
be
taking
great
advantage
of
that,”
Hauenstein
said.

Disclosure:
CNBC
parent
NBCUniversal
owns
NBC
Sports
and
NBC
Olympics.
NBC
Olympics
is
the
U.S.
broadcast
rights
holder
to
all
Summer
and
Winter
Games
through
2032.