European travel recovery continued in Q2 2023 due to strong consumer demand despite stubborn inflation and rising travel costs Europe’s air traffic, which has proven to be the strongest market, picks up heading into peak season, with volumes approaching pre-pandemic levels in mid-June
Europe’s tourism recovery maintains momentum despite economic headwinds, with international tourist arrivals reaching around 95% of 2019 levels. Even though inflation and rising travel costs are putting pressure on consumers’ wallets, travel spending remains a priority over other discretionary expenses. The latest data available shows that foreign arrival numbers have exceeded pre-pandemic levels in a quarter of reported European destinations.
The European Travel Commission (ETC) today published its ‘European Tourism: Trends and Outlook’ report for the second quarter of 2023, providing a comprehensive analysis of the latest tourism and macroeconomic developments in the region.
ETC President Miguel Sanz commented on the publication of the report as follows: “It is encouraging to see a positive recovery in international tourist arrivals in the first half of 2023. With this in mind, European destinations must prepare to effectively manage tourist growth.”Travel increase in demand and return of people. Tourism strategies should incorporate travel dispersion to help destinations cope with overcrowding, while also extending the benefits of tourism to less traveled areas. Tourism can and should be harnessed for good as a social, economic and sustainable force. ”
Consumers are becoming increasingly price-conscious
Many consumers will be keeping cost in mind when making travel decisions this summer, as the worsening economic climate puts pressure on travelers’ budgets. Household budgets and discretionary spending will remain challenging heading into Europe’s peak travel season (June-August), but this should not hinder the overall recovery.
Despite economic hardship, travelers continue to show strong demand for travel. Given this, it is not surprising that price sensitivity continues to benefit destinations with better value for money. Recent data through May shows that value-for-money destinations are performing well, with Serbia (+27%), Bulgaria (+21%), Montenegro (+12%) and Turkiye (+9%) recovering is leading the way. .
Europe’s air volume is increasing
In 2022 and early 2023, air traffic recovery lagged behind consumer demand across Europe. But the tide appears to be turning, with data through June showing the recovery is approaching pre-pandemic levels. This can be attributed to the increased air capacity of both European and foreign airlines, which will be brought to market in time for the peak summer period. European flight schedules are returning to pre-pandemic 2019 levels, with planned seating capacity at 96% for this summer. The latest data also shows that European international revenue passenger kilometers (RPK) continued its steady recovery, reaching 90.8% of 2019 levels in April.
It remains to be seen whether airline capacity will meet demand this summer, but current schedules suggest this will be sufficient. At the same time, potential disruptions due to aviation strikes, labor shortages, war-related airspace closures, etc. continue to cause significant uncertainty in the sector.
US leads recovery in international travel to Europe
U.S. travelers taking advantage of favorable exchange rates are expected to fuel recovery for many European destinations this summer. So far this year, U.S. tourist arrivals have exceeded pre-pandemic levels in 52% of reporting destinations, according to the latest data. As inflation continues to rise and the prospect of a recession weighs heavily on American household budgets, affordability will be a key factor for vacationers when choosing destinations within Europe.
Southern Mediterranean destinations such as Portugal (+79%), Turkiye (+78%) and Montenegro (+43%) reported a significant increase in the number of arrivals from the US market. In Eastern Europe, Latvia (+135%) and Poland (+51%) also recorded significant increases in arrivals from the United States. In the case of Latvia, this significant increase may be related to visits by friends and relatives of the Latvian diaspora living outside Europe, while the influx of journalists and volunteers and military personnel reporting on Russia’s war in Ukraine has increased It may be contributing to business performance.
