Full European Tourism Recovery Not Expected Until 2025

European tourism is expected to continue its recovery throughout 2022, although at a slower pace than previously hoped, according to the latest edition of the “European Tourism Trends & Prospects” quarterly report from the European Travel Commission (ETC).

The outlook: In 2022, international tourist arrivals to Europe are forecast to be 30 percent below 2019 volumes, supported by domestic and short-haul travel. On that front, domestic travel is projected to recover fully in 2022, while international travel is not expected to exceed 2019 levels until 2025.

Despite remaining in negative territory, year-to-date data for Q1 2022 showed that across all reporting destinations, arrivals are estimated to be 43 percent lower on a weighted basis relative to 2019—which is an improvement over the 60 percent decline observed in the previous quarter. The fastest rebounds based on data to February were reported by Serbia (-11 percent) and Turkey (-12 percent). Other destinations recovering at a faster pace based on data to February to March 2022 are Bulgaria (-18 percent), Austria (-33 percent), Spain and Monaco (both -34 percent) and Croatia (-37 percent).

COVID’s Grip on International Traveler Is Lessening

The report shows that COVID-19 is ebbing as the primary factor influencing consumer travel plans. Helped by vaccines and boosters, as well as destinations' health protocols and certifications, international travelers are now less hesitant about visiting Europe. Many countries, such as Spain, France and Italy, have removed the requirement for COVID testing prior to travel, conditional on vaccination status. As a result of these actions, Western Europe is forecast to be the best performing region globally this year (albeit still 24 percent below 2019 levels).

The United States remains among the best performers of all long-haul source markets. Annual average growth from the U.S. to Europe is expected to be 33.6 percent in the five-year period 2021 to 2026, with the fastest increase observed in Northern Europe (+41.5 percent). Overall, it remains the case that over 2022 transatlantic travel between the U.S. and Europe will be one of the key drivers of the European travel sector’s recovery.

On the contrary, there have been no immediate signs of Chinese tourist arrivals returning to pre-pandemic levels. China, the world’s largest travel spender, is currently enduring a severe outbreak of the Omicron variant in Shanghai and other big cities, prompting authorities to reimpose strict lockdowns and mandatory testing to suppress the spread of the virus. Over 50 percent of reporting destinations saw declines of over 90 percent in Chinese tourist arrivals compared to 2019.

Russo-Ukrainian Conflict Affecting Travel Sector

It is predicted that the Russo-Ukrainian conflict will result in reduced outbound travel from both source markets. In the short-term, neighboring countries and those most reliant on Russia and Ukraine as source markets will be worst affected in terms of tourism performance. As a result, Eastern Europe’s recovery has been pushed back to 2025, with arrivals now forecast to be 43 percent lower in 2022 compared to 2019.

The impact of the war could mostly hurt destinations such as Cyprus, Montenegro, Latvia, Finland, Estonia and Lithuania, where Russians made up at least 10 percent of total inbound travel in 2019. Beyond the visitor impacts, Russian tourists tend to be high spenders, meaning that an even larger impact will be felt in terms of tourism expenditure in these destinations. Overall, no immediate recovery is expected for countries with a high reliance on Russian tourism in the near-term.

Besides the direct effects of reduced travel both from Russia and Ukraine, the conflict has created other problems for the European travel sector. The inflationary effect of economic sanctions on Russia will continue to exacerbate rising jet fuel prices and may cause airfare price hikes this year. Other rising costs, such as with food, may erode consumer demand and further impact travel in a range of markets. Additionally, the closure of Russian, Ukrainian, Moldovan, and Belarussian airspace to most Western European carriers will impact European-Asian air connectivity.

Source: European Travel Commission

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