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ETC publishes quarterly report 1/2020

ETC publishes quarterly report 1/2020


The COVID-19 outbreak across Europe has left countries struggling to support their economies, leaving a significant scar on the tourism sector across the region. That is according to the European Travel Commission’s (ETC) latest quarterly report “European Tourism: Trends & Prospects”, which notes that pandemic concerns will intensify as travel restrictions continue into the peak summer travel season. Latest forecasts indicate that travel to Europe is expected to be 39% lower in 2020 than in 2019, representing half of the loss in visitor volumes globally.

Amidst a high level of uncertainty, estimating the consequences of the pandemic depends on its evolution over the coming weeks and months, in particular the duration of international and domestic travel bans, and how social distancing protocols are managed.

Most destinations expect tourism declines between 30-40% in 2020

Following the results of the ETC member survey, an impact assessment was carried out in April amongst national tourism authorities on the disruption caused by the pandemic. Significantly, most respondents expect a decline in tourism of between 30-40% in 2020 compared to 2019, while several others anticipate a decline in excess of 50%. In addition, some destinations expect dramatic GDP and employment contractions, and others mention losses between 60-70% in terms of tourism revenue.

The latest Tourism Economics scenario predicts that France is expected to be the most heavily impacted European country in volume terms with nearly 38 million fewer inbound visits in 2020, although the largest percentage impact is in Italy (-49%). Spain is predicted to be also heavily affected, with around 34 million fewer arrivals in 2020 compared to a year ago. Together, these three important destinations will account for around one-third of the fall in European international arrivals.

The air transport industry is likely to be amongst the most severely damaged with worldwide flights down almost 80% by April than at the start of the year. As a result, hotel occupancy rates across Europe are less than 10% and will remain at these low levels while current travel restriction are in place.

Domestic travel

One area where ETC believe attention should be focused, is the role domestic travel can play in the sector’s recovery. In comparison to the impacts on international travel, domestic travel is predicted to be significantly less affected with a 23% decline expected in 2020 for Europe as a whole. While it is unclear when travel restrictions will be lifted, domestic movement restrictions are projected to be eased before international travel restrictions, meaning tourists will substitute international travel plans for domestic ones.

Rising to this opportunity are ETC members who are already considering how to promote increased domestic demand later in the year. According to the survey of ETC members, several countries believe there is a chance for domestic tourism to ‘fill some of the gap’ left by the dramatic declines in inbound international tourism.

A holistic approach to support the revival of the sector

Although the road to recovery will be long, it is in everyone’s interest to see the sector recover quickly. Looking at the wider tourism ecosystem, the sector is the third largest of the EU economy, generating 9.5% of the EU’s GDP and accounting for some 22.6 million jobs. The World Travel & Tourism Council (WTTC) estimates that in 2020, some 13 million tourism jobs in Europe are in jeopardy due to the COVID-19 outbreak.

In terms of what needs to be included in a successful recovery package, ETC survey respondents outlined the following:

  • Any recovery plan must be rooted in data and evidence, including improved data and tracking methodologies.
  • Domestic tourism ‘recreational’ vouchers would help support the earlier domestic travel recovery to partly offset lower international travel activity.
  • Continued marketing and promotion will be crucial to keep travel and destinations top of mind among potential travellers to ensure future travel returns. Since long-haul travel is likely to take longest to recover, marketing budgets need to be shifted away from Asia and the United States to nearer European markets.
  • Shift focus to new activities to take advantage of potential recovery outside of the traditional summer peak season. Flight and ferry routes must remain open into the autumn and winter as well as some seasonal accommodation, which could help lay foundations for a reduction in overtourism during peak periods over the longer-run.

Looking to the future

The current crisis has left many considering what tourism will look like post-coronavirus. The level of disruption caused by the pandemic is far more severe than previous crises and will bring fundamental changes to the travel industry. The expectation that pre-crisis levels of tourism demand will not be achieved before 2023 provides opportunity to reshape the industry towards one that is more sustainable, more innovative, quality driven and that equally benefits travellers, the environment, local communities and economies. So far, the outbreak has forced businesses to embrace new technologies, and has somewhat softened worries about overtourism.

Eduardo Santander, Executive Director of ETC stated: “This crisis creates a downturn, but also an opportunity. We have the chance to think carefully about what kind of future we want for European tourism and what directions and measures are needed to get us there. We shall use this opportunity to create a more resilient and sustainable destination Europe in the future, which is better for our communities and our visitors.”

Full report* can be downloaded here

* The full report contents data sources updated on 6 May 2020 and may not reflect today’s trends due to the speed of change happening in the Travel & Tourism sector as well as the uncertainties of the development of the COVID-19 crisis.