Tourism in Europe is progressively rebounding amidst the lingering pandemic and the ongoing conflict in Ukraine.
European Tourism: Navigating Challenges and Seizing Opportunities
The latest report from the European Travel Commission (ETC) reveals a mixed bag for European tourism in 2022. While the sector shows signs of resilience, it also grapples with risks from multiple fronts induced by the Covid-19 pandemic, economic and geopolitical headwinds.
European Tourism's Steady Recovery
The report anticipates that European tourism will continue recovering in 2022 albeit at a slower pace than initially hoped. International tourist arrivals to Europe are estimated to be 30% below 2019 volumes, largely driven by domestic and short-haul travel. Domestic travel is expected to recover fully in 2022, while international travel may not surpass 2019 levels until 2025.
Europe registered an improvement in Q1 2022, with arrivals estimated to be 43% lower relative to 2019. Notable rebound rates were reported by Serbia (-11%) and Turkey (-12%). Other destinations recovering at a brisk pace included Bulgaria (-18%), Austria (-33%), Spain and Monaco (both -34%), and Croatia (-37%).
Covid-19: Memories Fading
Covid-19 is gradually losing its grip on international travelers' plans as the influences on their travel decisions. The success of COVID-19 vaccines, certifications, and destinations' health protocols have led travelers to feel less anxious about visiting Europe. With many countries such as Spain, France, and Italy nullifying pre-travel Covid testing requirements for vaccinated individuals, Western Europe is gearing up to be the best-performing region globally in 2022, despite being 24% below 2019 levels.
On the flip side, the rebound of Chinese tourist arrivals remains elusive. The ongoing Omicron outbreak in China, especially in big cities, and strict enforcement of lockdowns and testing protocols by authorities have impeded travel recovery. Around 50% of reporting destinations reported declines of over 90% in Chinese tourist arrivals relative to 2019.
Russo-Ukrainian Conflict: Dark Clouds Around European Skies
The Russo-Ukrainian conflict looms as the most severe threat to the European travel sector. The conflict is poised to result in reduced outbound travel from both Russia and Ukraine, causing detrimental effects on neighboring countries heavily dependent on these source markets. Eastern Europe's recovery has been pushed back by three years to 2025.
Destinations like Cyprus, Montenegro, Latvia, Finland, Estonia, and Lithuania may experience the most profound impact as Russian tourists made up at least 10% of total inbound travel in 2019. The war could also affect tourism expenditure in these destinations, as Russian tourists tend to be high spenders. The arrivals are now forecast to be 43% lower in 2022 compared to 2019 in these countries.
Beyond travel impacts, the conflict has brought forth additional challenges for the European travel sector. The conflict's inflationary effect on Russia will continue to drive up jet fuel prices and airfare prices. Rising costs, including food, may erode consumer demand and affect tourism across various markets. Moreover, the closure of Russian, Ukrainian, Moldovan, and Belarussian airspace to most Western European carriers will impact European-Asian air connectivity.
Additionally, the war in Ukraine may impact travel sentiment to Europe from overseas markets. A recent survey by MMGY Travel Intelligence suggests that 62% of US travelers planning to visit Europe cite concerns about the war spreading to nearby countries as a factor impacting their plans, double the number of respondents expressing concerns about Covid-19 health and safety. Nevertheless, the US is expected to remain among the top performers in 2022 compared to other long-haul source markets.
[1] McGillicuddy, M. (2022). Concerns Over Russian Invasion of Ukraine Lower Travel Intentions to Eastern Europe: Report. The 19th. Retrieved from https://www.the19th.news/2022/05/31/concerns-over-russian-invasion-of-ukraine-lower-travel-intentions-to-eastern-europe-report/
[2] Ukraine: Latest Travel Updates. (2022). GoEuro. Retrieved from https://www.goeuro.co.uk/destinations/ukraine-latest-travel-updates/
[3] European Union Extends Temporary Protection for Ukrainian Refugees. (2022). Euronews. Retrieved from https://www.euronews.com/2022/04/22/european-union-extends-temporary-protection-for-ukrainian-refugees
[4] Fully Guaranteed Protection for Ukrainian Refugees Until March 2027. (2022). European Commission. Retrieved from https://ec.europa.eu/commission/presscorner/detail/en/ip_22_1483
[5] Post-War Reconstruction of Ukraine Is Expected to Be a Massive Undertaking. (2022). World Bank Group. Retrieved from https://www.worldbank.org/en/news/feature/2022/08/31/post-war-reconstruction-of-ukraine-is-expected-to-be-a-massive-undertaking
- As uncertainty surrounding the Covid-19 pandemic subsides, Europe becomes a top destination for travelers, with western European countries showing the best performance in 2022, despite still being 24% below 2019 levels.
- The recovery of European tourism is steady, however, international travel may not surpass 2019 levels until 2025 due to continued concerns about the outbreak.
- Domestic travel has been the first to recover and is expected to be fully recovered by the end of 2022, while international travel is expected to take longer to bounce back.
- The Russo-Ukrainian conflict is destabilizing the European travel sector, with Eastern European countries heavily dependent on Russian tourists estimated to experience the most profound impact, as Russian tourists made up at least 10% of total inbound travel in 2019.
- Tourism expenditure in these destinations could be affected due to the tendency of Russian tourists to be high spenders, and the arrivals are now forecasted to be 43% lower in 2022 compared to 2019.
- In addition to damaging the European travel sector, the conflict brings forth challenges such as rising costs, including food, impacting consumer demand and tourism across various markets, and the closure of Russian, Ukrainian, Moldovan, and Belarussian airspace affecting European-Asian air connectivity.
