- The European tourism sector, which was severely disrupted by the covid‑19 pandemic, looks set to fully rebound this summer season. In many places tourist arrivals are already above 2019 levels, while other countries could reach that mark this year. The sector will play an important part in boosting economic activity in the south and south-east of Europe. Data from Ryanair—Europe’s largest airline in terms of passengers carried, kilometres flown and routes served—show that its passenger numbers are already above pre-pandemic levels, at 16m in April, up from 13.5m in April 2019.
- The ongoing cost-of-living crisis in Europe will have mixed effects on the sector. Squeezed incomes will drive more tourists to cheaper European destinations, such as the western Balkans and Turkey, and away from more expensive destinations, such as Spain and France. However, these latter destinations could benefit from an increased number of people who would usually travel outside of Europe choosing to stay on the continent to save money. Tourist arrivals from outside Europe will remain lacklustre. China’s post-covid reopening will boost arrivals, but we expect the number of inbound Chinese tourists to remain below its 2019 level this year. Arrivals from the US will also be tepid, as the US economy is slowing and real wages are stagnating.
- The biggest beneficiaries from the rebound in tourism this year are likely to be Balkan countries, which are more affordable and have already seen a bounce-back in arrival numbers. The impact of tourism on overall activity will be particularly substantial given the large contribution of tourism to services expenditure in these economies. Some southern European countries, such as Spain, will also enjoy strong tourism growth as a result of a low base: Spain and Italy are among the few countries where tourism has not yet rebounded to 2019 levels. Investment in tourism infrastructure will therefore pick up as these countries emerge from their pandemic slump. The main risk for Europe’s tourist sector is that of adverse weather conditions, such as prolonged heatwaves or flooding following droughts.
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