Despite Conflict, Europe Looking Strong

All week we're running a special report on what agents can expect from the travel industry in 2015. Here's our look at the industry as a whole, and here is a series of tips on how to be proactive with clients heading into the New Year. 

While the final numbers for 2014 have yet to be released, the year seems likely to be a strong one for international travel to Europe, in spite of airline strikes and political conflict in Russia. With overall visitor numbers rising and improving numbers in hotels (especially in the north), Europe seems poised to see a positive 2015.

According to the European Travel Commission’s (ETC) most recent report, “European Tourism – Trends & Prospects,” European tourism saw a 4 percent increase in foreign visits through August 2014. Growth in large destinations in Southern and Northern Europe exceeded expectations, while smaller destinations also saw positive numbers.

Among Europe’s top destinations by international tourist arrivals, the ETC notes that Spain, the second-most visited destination, grew by 9 percent through August, on top of nearly 61 million visits reported for 2013. At number four, Turkey saw a 7 percent increase, while Germany, the continent’s fifth-most visited destination, is holding steady at 5 percent. At number 10 on the list, Greece grew by 16 percent, which the ETC credits to the recovery of business travel.

The ETC has predicted a “positive outlook” for Europe’s tourism future and expects business to grow by 4 percent for 2014 and by between 2.5 percent to 3.5 percent in 2015. International tourist arrivals to EU destinations are expected to grow by 2.1 percent or 9 million international arrivals per year on average until 2025, while worldwide international arrivals are expected to grow faster by 3.5 percent. The Commission notes that these numbers mean that, despite continuous growth, EU’s share of the international tourism market “will inevitably decline as a result of tourism growing faster in emerging world regions.”

Hilton Paris Opera is among more than 200 Europe hotels set to debut in 2015.
Hilton Paris Opera is among more than 200 Europe hotels set to debut in 2015.

Hotel Numbers

In early December, the European hotel industry was seeing mixed results compared to 2013’s numbers. “Each month this year, Europe has reported either flat or positive performance in the three key performance metrics,” Elizabeth Winkle, managing director of STR Global, said in a statement when the company posted its October results in November, noting that the actual average daily rates for the month—€110.42 (about $138)—was the highest STR Global has seen for any October over the last 10 years. “Compared to last year, ADR increased 3.8 percent. The growth is driven mostly by Northern Europe, with help from Southern Europe,”  Winkle said.

“In Northern Europe, when measured in local currency year to date, markets such as Dublin, London, Copenhagen and Edinburgh have contributed to ADR growth,” Winkle said. “With the exception of Dublin, the markets mentioned do not use the euro, which has an overall impact on the exchange rate. When measuring in constant currency, year-to-date ADR increased 4.4 percent for the Northern region. Athens, Lisbon and Madrid have all contributed to Southern Europe’s ADR growth.”

“Year to date, Western Europe still is achieving the highest actual ADR levels [€117.34/$146] of all sub-regions,” Winkle said. “Amsterdam, Geneva, Paris and Zurich saw the highest year-to-date ADR levels in the region.”

Athens, Greece, reported the only double-digit occupancy increase, rising 18.2 percent to 79.6 percent. On the flipside, Moscow, Russia, reported the largest ADR decrease, falling 21.7 percent.

visiting europe

Upcoming Hotels

In 2015, STR Global expects 235 hotels (36,788 rooms) to open throughout Europe, most of them upscale.

The Club Med Val Thorens opened on December 5 in the French Alps’ Three Valleys region, with direct access to the world’s highest and largest ski domain. The all-inclusive packages here include accommodations, meals and beverages, ski passes with lift tickets, ski instruction for all experience levels, select activities and entertainment. The resort will have 384 rooms, including 12 deluxe rooms, five junior suites and six suites.

The Hilton Paris Opera debuts in January following the completion of a $50 million restoration from the former Concorde Paris Opera. The hotel is in the heart of the city’s Right Bank district and close to the Champs-Elysées, Opéra Square and Rue de la Paix. In Switzerland, meanwhile, the Kameha Grand Zurich, a business hotel, is set to open in spring 2015.

Marriott International is bringing its JW Marriott Hotels & Resorts brand to Italy in March. The JW Marriott Venice Resort & Spa will open on a private island, Isola delle Rose, in the Venetian lagoon. The resort is expected to have more than 16 acres of gardens and outdoor space and a sizeable spa.

Look for the Six Senses Douro Valley to open in Portugal this spring. The resort, which marks Six Senses’ Europe debut, covers 19 acres and has 71 guest rooms, suites, and one-, two- and three-bedroom villas. The 24,000-square-foot spa has 10 treatments rooms.

Also in Portugal, Viceroy Hotel Group plans to open its first European property in 2017 with the luxury Viceroy Algarve at Quinta da Ombria.

Tour Company Perspectives

Trafalgar President Paul Wiseman says that early booking trends for Europe in 2015 are “very positive,” which he credits to an attractive dollar-to-euro exchange rate, “fairly stable” land prices and reasonable airfares. “With those three at work, we’ve seen very good early bookings,” he says. Still, he is hesitant to make early predictions. “Once upon a time, I could tell you what the year ahead would look like in December, but I’m not that brave anymore,” he says. “So many things happen in a year these days that early trends are no guarantee of final results.”

And while the evergreen destinations remain evergreen, Wiseman has noticed that frequent travelers are venturing off the beaten path and going beyond the main cities. “In Italy, it’s not just Rome and Venice; in France, it’s not just Paris. It’s the regions around them.” Trafalgar’s Hidden Journeys trip focused on Bordeaux, he notes, is “doing very well.”

At Europe Express, meanwhile, Vice President of Sales Kier Matthews says that Italy, France, the UK, Spain and Germany are all selling well for 2015, but that he is mostly excited by the increases in Switzerland and Germany, which are up 31 and 30 percent, respectively. In Germany, he notes, Bavaria is tops, especially with small groups and extended families traveling together. In Switzerland, it’s all about Lucerne: “It is so approachable and easy and beautiful,” he says. “Americans are drawn to that. It’s [also] easy to navigate.”

Already, Europe Express’ numbers for 2015 are up 52 percent compared to this time last year, and he expects an overall industry growth of 20 to 30 percent. “That includes escorted tours that will see some growth,” he notes, adding that customized tours are no longer an exclusive niche but are trickling into many facets of the industry. “Customization is no longer a luxury,” he says. “It is a necessity.”