Paris Olympics: Tourists Drive Prices, Locals Unmoved

The Olympic Games are driving a surge in prices, yet French consumers are unlikely to feel the effects. Mega events like the Olympics or major concerts such as Taylor Swift’s Eras Tour generate a spike in demand for hotel rooms, airline tickets, and various services catering to the influx of visitors. However, most consumers may remain unaffected, according to UBS. Paul Donovan, chief economist at UBS Global Wealth Management, noted in a recent analyst report that “The Olympic Games or a Taylor Swift concert create a sudden demand shock.” He explained that the way prices are measured tends to capture this unusual and fleeting demand pattern, leading to a temporary rise in consumer price inflation. This trend was evident during the Eras Tour, which significantly boosted hotel revenues in U.S. cities hosting Swift's performances. In June, U.K. hotel prices saw an uptick, but Donovan suggested that the increased costs “may have been absorbed by a select group of Swift’s fans,” particularly with her concert at Wembley Stadium that month. Similarly, the Summer Games are creating a comparable scenario in Paris. Donovan emphasized that “the tourists flocking to Paris for the Olympics, and paying the price, are not representative of French consumers.”