The European tourism sector successfully endured another challenging summer despite worsening inflation and staff shortages threatening its recovery.
According to the most recent edition of the European Tourism Trends & Prospects quarterly report from the European Travel Commission (ETC), Europe’s travel bounce-back will continue in the remaining months of 2022 with the region expected to recover close to 75% of 2019 inbound travel volumes this year.
However, warnings have also been cast that with a looming recession and higher inflation rates across Europe this winter a drop in consumer spending and tourism demand could delay, but not derail the sector’s recovery. The prolonged war on Ukraine and additional travel restrictions for Russian tourists across Europe will also push back the recovery in Eastern Europe.
Luís Araújo, ETC’s President commented: “European tourism is proving exceptionally resilient to inflation. While the cost-of-living crisis is causing many to change their approach to travel, it is not dampening their desire to explore Europe completely. Short-haul travel will be a lifeline for the sector over the next months, as more travellers opt for shorter and closer trips.”
ETC predicts that in the face of economic uncertainty and surging inflation, short-haul trips, which tend to be more economical, will be the preferred travel option. Overall the price of holidays will be key among households grappling with having less disposable income. This could however be to Europe’s benefit as intra-European holidays alongside domestic travel tends to be cheaper than longer-haul alternatives. Short-haul travel currently makes up around 72% of total visits in Europe and is set to grow in popularity for the remainder of the year.
With long-haul travel into Europe still hampered by restrictions and lingering negative sentiment from Asia and the Pacific, the Chinese market has shown minimal progress towards a recovery due to the slower removal of travel restrictions.
However, amid the strength of the US dollar, which has appreciated around 20% against the euro over the last year, transatlantic tourism will get a boost from American holidaymakers. A strengthened dollar has already proven a lifeline to many European destinations, with the latest data showing that three in five reporting countries have recovered at least 70% of 2019 US travel volumes so far this year. A number of destinations exceeded 2019 travel demand. Turkey saw the strongest rebound, followed by Portugal, Lithuania, Montenegro and Poland.
