(VitalNews.org) – The Olympic Games are causing a rise in prices in the area, but it’s alleged that French consumers aren’t supposed to feel this rise.
Olympics or other popular events like Taylor Swift’s Eras Tour led to a rise in demand for hotels, airline tickets, and other services that would be needed for an influx in visitors in the area. However, according to UBS, consumers aren’t expected to see the impact of this themselves.
The data could reflect a skewed view because of the methods used to calculate consumer price and the spike in some areas like hotels could have a distorted impression on people.
“The Olympic Games or a Taylor Swift concert create a sudden demand shock,” said Paul Donovan, chief economist at UBS Global Wealth Management.
He continued, “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.”
This kind of jump in price with the Olympics was already seen when Taylor Swift arrived for her Eras tour in the area as it boosted hotel revenue heavily in cities where she was performing.
The Olympics seems to be causing the same result. “The tourists flocking to Paris for the Olympics, and paying the price, are not representative of French consumers,” Donovan continued.
The Olympics has saved the hotel business in Paris as it experienced a sixty percent drop in occupancy rates in the beginning of the month. Currently during the Olympics, hotel bookings are up ninety percent, but they are expected to drop back down to a low compared to a year ago once the Olympics are over.
Part of the reasoning for Paris’ hotel occupancy difficulty is the price increase of hotels in the city and surrounding areas.
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