Delta Air Lines braces for a summer slump in sales as travellers opt against Paris this summer. CEO Ed Bastain told CNBC that “travellers 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.” The 2024 Paris Olympics are scheduled for July 26th and August 11th, after the American carrier expects travel to Paris to rise steadily. According to Bastian, “Unless you’re going to the Olympics, people aren’t going to Paris. … very few are.” Summer predictions from the airline also show that business travel to the French capital during the Olympics will dwindle.
A CNBC report explores the impact of the tourist snub on Delta Air Lines, which carries the largest number of American tourists to Europe. Delta’s recent joint venture with Air France amounts to nearly 70% of the American tourist stream into France, based on data from consulting firm ICF. Air France’s parent company, Air France-KLM, forecasted a revenue dip of 180 million euros from June to August, which coincides with the Summer Olympics. Delta’s underwhelming third-quarter profit and revenue forecasts highlighted the slow summer ahead.
Glen Hauenstein, Delta’s president, shed light on the surreal hike in hotel prices in Paris this summer due to the flood of athletes and their teams in the city’s capital. STR, a hotel data firm, analysed soaring hotel prices in July and August and predicted them to rise beyond 45% in Paris. Yet Hauenstein reassured investors of a late-summer recovery starting in September. “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 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,” said Hauenstein on an earnings call on Thursday. Additionally, Delta is expecting to see a diversion in its summer tourist route towards the east as travellers are expected to flock to Japan. The favourable exchange rate for U.S. tourists has diverted Americans to Japan.
