EUROPEAN TRAVEL TO EXPERIENCE SLOWER BUT STEADY RECOVERY DESPITE NEW CHALLENGES IN 2022
European tourism seems to remain resilient to economic, pandemic and geopolitical headwinds. The ongoing Russo-Ukrainian conflict has led to an elevated oil and gas crisis. Soaring energy and commodity prices, which are driving inflation, have increased business costs, disrupted supply chains and could hurt consumer spending for much of 2022. Lingering uncertainty remains about the extent to which the oil-price shock will weigh on travel due to the sector’s energy reliance. Should the conflict persist, the impact could be translated into increased transportation costs, while holidaymakers are likely to explore closer-to-home destinations and reduce travel spending.
Latest available data suggests that in 2021, international tourist arrivals were 61% below pre-pandemic levels. The outlook remains bleak in global growth terms, however, in 2022 arrivals to Europe are forecast to be 30% below 2019 volumes supported by domestic and short-haul travel. Domestic travel is projected to recover fully in 2022, while international travel is now expected to exceed 2019 levels only by 2025. Uncertainty about possible new Covid-19 variants or further outbreaks and a prolonged war in Ukraine affecting travel to neighbouring countries could take its toll on European tourism recovery this year.
Despite remaining in negative territory, year-to-date data for 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%) compared to 2019.