Europe, as we all know, has been the global leader in the international tourism market. Even in 2020, when the global tourism industry was absolutely crushed by the pandemic, Europe saw 235.9 million arrivals. To put the statistic in perspective, the next most visited region was the Americas which saw 69.9 million arrivals. Europe (in green), have dominated the global tourism market by receiving close to half of total global arrivals that take place every year since 2005.
France and Germany are expected to lead the European tourism industry in terms of recovery. However, recovery will not be reflected in a linear process for most European countries. This is due to the fact that distinct lower occupancy rates affect average room prices and structural and economic differences in the respective nations also play a part in boosting recovery among hotels. France, the world’s top visited country, will be expected to recover the fastest as international borders restrictions are slowly lifted. Domestic tourism demand in the country is the main booster for recovery despite initial vaccine resistance in the nation. Vaccine rates in France now stand at 70.34% (as of 23 August). Germany will rebound strongly because of its robust vaccination programme that was rolled out earlier this year and its relative economic stability in the region helps to drive domestic travel demand as well.
Spain, during this period, would be more vulnerable than its neighbours as it is also the most reliant on international tourists. Inbound international tourism alone accounts for more than half of travel and leisure spending in Spain. As the nation is not as populated and also holds a lower average earning income among its peers, domestic tourism demand alone may not have a significant impact like what we can see from France and Germany.
Europe is also set to see a higher penetration of intra-European travel in the upcoming months. It is forecasted that in 2021, 83% of all European inbound arrivals will account from intra-European travel, up from 77% in 2019. This was made possible with successful vaccination rollouts across the region (53% as of 23rd August), not to mention the implementation of the EU Digital COVID Certificate on 1st of July. The Certificate helps to keep travelling transparent and safe, therefore allowing for coordinated lifting of restrictions across the EU nations. The introduction of the Certificate could not have come at a better time, as it better prepares Europe for a buzzing summer.
With intra-Europe travel seemingly becoming the mainstay, long haul leisure travel is not likely to recover to pre-COVID levels, at least until 2025. European countries however, can expect to see their tourism sector rebound through the influx of American tourists over the next few years. This was already reflected in some nations who opened up earlier in May, Croatia and Iceland, which saw an increase (+0.5%) and (+22.7%) respectively in sale of issued tickets, up from 2019. Chinese tourists, another group of significant travellers, will also contribute to the recovery and growth of Europe’s travel sector in the next decade.
To summarise what the accommodation industry in Europe can expect, countries with a good vaccination rate and robust economic structure will more likely recover faster. Travelling trends have shifted to shorter travelling routes, with long haul travel likely out of the picture for 2021. Hoteliers can adopt different marketing strategies to capture niche segments such as Chinese/American guests or offer competitive prices to attract domestic travellers.
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