Publication date:
Jul 2022
Language:
English
STRONG PENT-UP DEMAND MEETS HIGH INFLATION AHEAD OF BUOYANT SUMMER SEASON
Destinations across Europe continue to relax travel restrictions as concerns over Covid-19 wither away, enabling the release of strong (short- and mid-haul) pent-up demand. However, skyrocketing energy prices are pushing travel costs yet higher, prompting people to travel closer to home or consider cost-saving options. It remains to be seen how households (especially lower-income earners) will make a trade-off on travel spending this summer amidst consumer price hikes and squeezed disposable incomes.
Worsening inflation, prolonged war disruption, the resurgence of the pandemic and economic turmoil continues to endanger the tourism outlook. Latest available data indicates that European tourist arrivals are 43% below pre-pandemic levels between January and March this year, whereas prospects for the overall year 2022 suggest that the region would have recovered 70% of pre-pandemic travel demand.
Despite headwinds, willingness to travel this summer will prevail. The most recent data shows that across all reporting destinations over four in five posted declines below 50% over 2019 levels. Bulgaria (-8%), Serbia (-10%) and Turkey (-14%) saw the strongest rebounds. Monaco (-22%), Croatia (-30%), Iceland (-35%) and Slovenia (-37%) – the only destinations reporting data to May – also exhibited a strong recovery. At the other end of the spectrum, Latvia’s geographical proximity to Russia is slowing the country’s tourism recovery from the pandemic (-63%) following mass hotel booking cancellations. Slovakia and the Czech Republic are among the Eastern European destinations exceeding the 50% decline.
