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ETC Gives Strong Outlook for 2022 European Tourism Recovery

Willingness to travel this summer will prevail, despite the uncertainty brought about by worsening inflation, prolonged war disruption and rising rates of Covid-19, according to the European Travel Commission (ETC).

In its recent quarterly report of ‘European Tourism Trends & Prospects’, the ETC indicates that recovery is in full swing going into the peak summer season of 2022, with consumers’ savings accumulated through the pandemic expected to support travel demand.

ETC predicts Europe will recover 70 percent of pre-Covid travel demand this year.

“Covid-19 restrictions have been rolled back, and people are eager to make up for two years of lost travel opportunities,” said ETC President Luís Araújo.

For 2022 to date, Bulgaria (-8 percent), Serbia (-10 percent) and Turkey (-14 percent) saw the strongest rebounds in tourist arrivals. Monaco (-22 percent), Croatia (-30 percent), Iceland (-35 percent) and Slovenia (-37 percent) – the only destinations reporting data to May – also exhibited a strong recovery.

Source: ETC, European Tourism Trends & Prospects report - Q2/2022

Source: ETC, European Tourism Trends & Prospects report – Q2/2022

Citing data from Oxford Economics’ Tourism Tracker, the ETC’s report showed that overnight stays within the EU managed to reach pre-pandemic levels in May this year, with tourism hotspots such as Spain and Portugal in the lead with pre-pandemic volumes.

Both destinations are trailed by Italy, Greece, Croatia, and Malta.

Hellenic Parliament, Athens (archive photo)

Challenges for the sector

According to ETC, high inflation is likely to shift demand to domestic and short-haul travel.

“While travel sentiment in Europe remains strong, the savings base – which was expected to bolster growth – has been eroded by the increasing cost of living due to energy and food price hikes,” the report notes.

Moreover, the steep acceleration in fuel prices also directly increases the price of travel, or more specifically transport. For consumers, the price hike will likely shift preferences to lower cost options such as staycations, or more affordable forms of transport to nearby countries.

Photo source: European Parliament

Photo source: European Parliament

As a result, short- and medium-haul travel is expected to continue driving European tourism recovery.

Arrivals from long-haul markets still lag significantly behind, especially in Asia where travel sentiment has been hampered by ongoing Covid-19 restrictions. Although sentiment in the United States is more positive, recovery has still been slower than expected. US citizens returning from Europe were required to take PCR tests prior to travel until the end May/beginning of June, which may have held back demand.

Staff shortages: European destinations may struggle to facilitate high demand

The report also notes that talent shortages across Europe pose another threat to pent-up travel demand.

“We are witnessing a much faster rebound than travel businesses in Europe had been expecting, and staff shortages may prove to be an obstacle to a complete recovery,” said ETC President Luís Araújo.

Photo source: European Commission

Photo source: European Commission

According to the report, the primary reasons cited for the shortages are the restricted pool of available workers, long lead times on security clearance and the sector being viewed as an unstable employment opportunity post-Covid.

Although staff shortages in hospitality are acute, presently a shortage of workers in the aviation sector is dominating headlines. Roughly 190,000 European aviation workers were laid off during the pandemic.

ETC’s report notes that despite airlines and airports reacting with recruitment drives, it is “unlikely the industry will be able to respond within this peak summer season”.

Photo source: IATA

The impact of this shortage is already being felt – over the first weekend of June, the Netherlands saw cancellation rates of up to 11 percent and up to 4 percent in the UK. Airports are cutting back the number of flights to mitigate the travel chaos that is expected to continue into the summer months as several air carriers announce strikes and cancel flights over labour shortages.

“Bringing back talent, and making careers in the sector more enticing, is the top priority for European tourism recovery in the months to come,” said ETC President Luís Araújo.

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