Air France, the national airline of France, has announced that it anticipates a loss of up to €180 million ($193 million U.S.) during the current financial quarter due to the hosting of the 2024 Summer Olympics in Paris. The airline attributes this projected loss to a significant decrease in tourist arrivals during the Olympics, which are scheduled to take place from July 26 to August 11, 2024.

According to Air France, international markets are showing a notable avoidance of Paris, which has resulted in below-average travel between the city and other destinations. This avoidance is believed to be driven by concerns over crowded conditions and inflated prices associated with the Olympic Games. Similarly, residents of France are either postponing their holidays until after the Olympics or considering alternative travel plans.

As a consequence, Air France-KLM estimates that its forthcoming unit revenues will be negatively impacted by approximately €160-€180 million for the period between June and August 2024. However, the carrier remains optimistic that travel to France will normalize after the conclusion of the Olympics, with encouraging demand levels expected in late August and September.

These projections from Air France align with data from the Paris tourism office, which forecasts a significant drop of 14.8% in foreign arrivals during July 2024 compared to the same month in 2023. This trend is also reflected in the hospitality industry, with Paris hotel occupancy levels for the Olympic period peaking at 77.8% on Saturday, July 27, and 77.7% on opening night, July 26.

Despite these challenges faced by Air France and the tourism sector, the 2024 Summer Olympics are still expected to have a positive overall impact on Paris. An independent study conducted by the Centre for Law and Economy of Sport (CDES) indicates that the event will generate an estimated economic impact of €8.9 billion ($9.6 billion U.S.) for the city. This projection takes into account the anticipated 2.3 to 3.1 million ticket-holding visitors, with around two-thirds of them being French citizens. Additionally, tourists are expected to spend $2.8 billion during their visit, contributing to the local economy.

The funding for the Paris Olympics primarily comes from media rights, sponsorship, and ticket sales, amounting to approximately $7.5 billion. Private investment in long-term infrastructure projects, including a $1.7 billion contribution from the International Olympics Committee (IOC), has also played a significant role. Moreover, $3.2 billion in public funding has been allocated to address the long-term needs of local communities, with 80% of this investment going towards Saint-Denis, a suburb of Paris known for its socioeconomic challenges. After the games conclude, the Olympic Village in Saint-Denis will be transformed into housing units and schools.

Tourism experts believe that the lower demand observed during the early summer months due to the Olympics is a temporary adjustment. They predict that Paris will regain its status as a major tourist destination once the games are over, further solidifying the city's appeal and potentially attracting even more visitors in the future.

In conclusion, while the hosting of the 2024 Summer Olympics in Paris has caused Air France to anticipate significant losses, the overall economic impact and long-term benefits for the city are expected to outweigh these short-term challenges.