European tourism will remain resilient amidst risks on multiple fronts, according to the European Travel Commission’s (ETC) most recent edition of its quarterly report European Tourism Trends & Prospects. The report monitors the impact of the COVID-19 pandemic as well as current economic and geopolitical headwinds and anticipates that European tourism will continue recovering in 2022, albeit at a slower pace than previously hoped.
While international tourist arrivals to Europe are forecast to be 30% below 2019 volumes in 2022 and this sector is not expected to exceed 2019 levels until 2025, domestic travel is projected to fully recover this year.
Despite remaining in negative territory, year-to-date data for Q1, 2022 showed that across all reporting destinations, arrivals are estimated to be 43% lower on a weighted basis relative to 2019 – an improvement over the 60% decline observed in the previous quarter. The fastest rebounds based on data to February were reported by Serbia (-11%) and Turkey (-12%). Other destinations recovering at a faster pace based on data to February-March 2022 are Bulgaria (-18%), Austria (-33%), Spain and Monaco (both -34%) and Croatia (-37%).
Luis Araujo, ETC’s President said: “Over the course of the pandemic, the European tourism sector has become adept at dealing with uncertainties and challenges. The sector is steadily recovering from COVID-19 and there is cause of optimism. Nevertheless, European tourism will have to maintain this fortitude throughout the year as Europe continues to deal with the significant fallout from the ongoing Russo-Ukraine conflict. ETC calls on EU institutions to continue to provide sufficient and timely financial aid and other support to the sector, especially to destinations heavily reliant on tourism from Russia and Ukraine.”
The report also shows that COVID-19 is ebbing as the primary factor influencing consumer travel plans. Helped by the COVID-19 vaccines and boosters, as well as destinations’ health protocols and certifications, international travellers are now less hesitant about visiting Europe. Many countries, such as Spain, France, and Italy, have removed the requirement for COVID testing prior to travel, conditional on vaccination status. As a result of these actions, Western Europe is forecast to be the best performing region globally this year, albeit 24% below 2019 levels.
The US remains among the best performers of all long-haul source markets with transatlantic travel between the US and Europe this year one of the key drivers of the European travel sector’s recovery.
In contrast, there have been no immediate signs of Chinese tourist arrivals returning to pre-pandemic levels. China, the world’s largest spender, is currently enduring a severe outbreak of the Omicron variant in Shanghai and other big cities, prompting authorities to reimpose strict lockdowns and mandatory testing to suppress the spread of the virus. More than 50% of reporting destinations saw declines of more than 90% in Chinese tourist arrivals compared to 2019.
The report also underlines that the Russo-Ukrainian conflict will result in reduce outbound travel from both source markets. In the short-term, neighbouring countries and those most reliant on Russia and Ukraine as source markets will be worst affected in terms of tourism performance. Eastern Europe’s recovery has been pushed back to 2025 due to the conflict, with arrivals now forecast to be 43% lower in 2022 compared to 2019.
The impact of the war could mostly hurt destinations such as Cyprus, Montenegro, Latvia, Finland, Estonia and Lithuania, where Russians made up at least 10% of total inbound travel in 2019. Beyond the visitor impact, Russian tourists tend to be high spenders meaning that an even greater impact will be felt in terms of tourism expenditure in these destinations.
Besides the direct effects of reduced travel from both Russia and Ukraine, the conflict has created other problems for the European travel sector, including inflationary effect of economic sanctions on Russia. These will continue to exacerbate rising jet fuel prices and could cause airfare price hikes this year. Other rising costs such as food and energy could also erode consumer demand for travel. In addition, a recent survey by MMGY Travel Intelligence indicates that 62% of US travellers planning to visit Europe stated concerns about Russia’s war on Ukraine spreading to other countries as a factor impacting their travel plans.