EUROPEAN TOURISM HAS RALLIED DESPITE COST-OF-LIVING PRESSURES
Europe enjoyed a strong tourism rebound over the summer months as Covid-19 disruptions abated. However, the region was not exempt from turmoil arising from the prolonged war in Ukraine, labour shortages, elevated food and energy prices, and stalling economic growth. Although gas prices have recently decreased, attributed to almost full storage levels and reduced demand in most EU countries due to a combination of warmer than average weather and energy saving initiatives, prices still remain sky-high and are expected to cause economic turmoil this winter.
Travel costs have inevitably spiralled upwards, adding to the many factors sapping consumer spending and confidence. Despite acute challenges, Europe’s travel bounce-back is expected to continue in the remaining months of 2022, led by cost-conscious and value-driven travel. Encouraging data suggests a positive outlook in 2022, with the region expected to recover 73% of 2019 overnight tourist arrival volumes. However, 2019 levels will only be achieved by 2025.
Travel enthusiasm persisted this summer with over half of reporting destinations recovering to at least 77% of 2019 levels of foreign arrivals. The rebound was led mostly by Southern Mediterranean destinations. Based on data to August, Turkey (-5%), Serbia (-8%) and Luxembourg (-9%) made the strongest comeback. While Turkey remains a good value destination, Serbia is open to Russian travellers without visa requirements. Indeed, there has been an influx of Russians arriving in Serbia. In some cases, tourism is likely being used as a pretence for travel; in reality, many are likely fleeing Russia as a consequence of Putin’s war in Ukraine and the impact this has had on life within an increasingly isolated Russia.