Paris Olympics 2024: France faces major financial loss as tourism drop hits airlane and hotel industries
Hosting an Olympics is seen as a badge of honor for any city, but for France, hosting the Paris Olympics 2024 is slowly turning into a money guzzler with little hope of a return on their investment.
While hosting an Olympics is always an expensive affair, cities hope to recoup their investments from an increase in tourism to the host nation. However, for France, the situation has not transpired that way, with the number of international tourists to Paris being much lower than expected.
According to a report from the Telegraph, France, which is usually one of the premier travel destinations in Europe due to its rich cultural and historical heritage, has seen little to no changes in travel interests during the period of the Paris Olympics 2024. Hotel and flight bookings as well as tourist advisors are painting a bleak picture of the present scenario of tourists coming to Paris to watch this year’s summer Olympics.
Air France, which is the flag carrier of France, has reported a loss of 180 million euros in the current quarters. The main cause of this seems to be an apprehension about the overcrowding and price inflation caused by the Paris Olympics 2024.
“International markets show a significant avoidance of Paris,” Air France said in a statement. “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.”
The Paris tourism office itself, according to Forbes, forecasted a 14.8 percent drop in foreign arrivals in July 2024 compared to a year ago.
Meanwhile, hotel bookings have peaked at around 77 per cent during the first two days of the Paris Olympics and will drop as low as 59.8 percent on the last night of the event. For context, the hotel occupancy in Paris stood at 81.4 percent on July 2023.
Will France be successful in keeping the Paris Olympics 2024 costs down?
France, for its part, has pledged to invest more than 8 million euros (8.75 billion USD) in preparations for the Paris Olympics 2024. While the figure may sound high, it is the cheapest Olympics yet – if France can pull it off within the limit. For context, the Tokyo Olympics 2020 cost Japan a whopping 13 billion USD, while the Sochi Winter Olympics 2014 cost a mouthwatering 25 billion USD.
However, even then, France is looking to make a loss on its investments, owing to low amounts of tourist interest in the quadrennial event. Furthermore, as the past four Olympics have shown, host cities usually tend to overshoot their budgets, often by two to three times.
“I won’t be surprised if all in, the costs are $15 billion for Paris, and the revenue from the games is just $5 billion to $6 billion,” Andrew Zimbalist, a professor of sports economics at Smith College in Massachusetts, told Quartz.