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European tourism faces ‘challenging’ winter amid disposable income squeeze

A “challenging” economic backdrop will lead to a difficult winter for the European tourism sector, with data for much of the region already indicating the start of a mild recession.

The downbeat assessment came as more than 30 tourism bodies met in Prague for the general meeting of the European Travel Commission (ETC).

ETC predicts that high inflation, a key factor behind the bleak winter outlook, will impact the travel recovery on multiple fronts. 

National tourism organisations attending the event discussed  how consumers in key markets are expected to face “higher-for-longer” inflation levels and rising interest rates. 

This will erode disposable income and reduce the scope for discretionary spending, delaying the recovery in travel. 

At the same time, airlines and hospitality will face continued price pressures through elevated energy prices and higher labour costs, passing this on to consumers via rising fares.

The NTOs agreed that it is vital now for ETC research reports to closely follow consumer confidence and travel sentiment in Europe and key markets to adapt the tourism offer and promotional activities addressing major traveller concerns.

ETC’s newest member, the State Agency for Tourism Development of Ukraine (SATD), attended for the first time to provide details on how Ukrainian tourism sector is coping with the war.

The conflict in Ukraine has caused uneven recovery of tourism across Europe, the meeting heard.

The sharpest declines in tourist arrivals were recorded in the Baltic states and eastern European countries bordering Russia or Ukraine, still recording drops of about 40% compared to pre-pandemic 2019 arrivals.

Planned joint marketing activities co-funded by the EU showcasing European destinations and tapping into new markets to replace Russian tourists will be the core priority to address this problem.

ETC president Luis Araujo said: “We are committed to ensuring the European travel sector successfully weathers the global impacts on the horizon this coming year. 

“Over the course of the pandemic the travel sector proved itself to be resilient and highly adaptable. 

“As it endures new challenges, I have ever faith that European tourism will continue to evolve, embracing new sustainable and digital travel solutions.’’

 

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