The 2024 Paris Summer Olympics and Taylor Swift’s Eras Tour are causing a price surge in Paris, however French nationals are not expected to bear the burden, cue in – tourists.
With Paris being centre stage for global events like Olympics & Taylor Swift’s Eras Tour, hotel and airline prices are at an all-time high. “The Olympic Games or a Taylor Swift concert create a sudden demand shock,” stated Paul Donovan, chief economist at UBS Global Wealth Management, in a recent analyst note.
UBS believes that the sudden hike in prices will translate as a seasonal distorted impression and not account for lasting inflation in the French economy. This tourist influx in France is not likely to impact the French as Donovan explains that “the measurement method for these prices is more likely to capture the unusual and transitory pattern of demand, and it is here that the increase in consumer price inflation takes place.”
CoStar found a 206% year-over-year growth in weekly revenue per available room from July 28th to August 3rd. CoStar confirmed that the average French person is unaffected by these price hikes, highlighting very few will be making a trip to Paris for the summer.
In the first week of the Games, the Paris tourist office reported 1.73 million visitors in Greater Paris, an 18.9% increase from 2023. Small businesses experienced a booming summer as Visa reported businesses received a year-over-year sales boost of 26% from cardholders in the Games’ first weekend. Several officials, including Christophe Dubi, the Olympic Games executive director, believe the economic impact of the Games is likely to be a positive one. A recent study from the Centre for Law and Economics of Sport estimates that Paris will make $12 billion in long-term revenue for France.
The 2024 Paris Olympics is the first Olympics that ran under its $10 billion since Sydney 2000. Victor Matheson, an economist and professor at the College of the Holy Cross, stresses that mega events like the Olympics are bound to substantially bolster the French economy. He confirmed that “Those sorts of things [Olympics] drive up costs pretty quickly; they don’t appear to be pushing that.” In the case of Paris, this is particularly true, as up to 95% of the venues were temporary or pre-existing structures.
