European tourism continues to grow at a modest pace despite unstable world economy

Thursday, November 14, 2019

European tourism demand remains in positive territory even though there is a slower expansion rate as  compared to the last two years. The European Travel Commission’s (ETC) latest quarterly report –European Tourism-Trends  & Prospects for Q3, 2019 destinations continue to grow at a modest pace and the overarching regional outlook remains positive that is 3-4 % in international tourism arrivals in 2019. The external risks are failing to dissipate.

Montenegro maintained growth momentum at 18% in Q3 by welcoming a soaring influx of Western European holidaymakers. In Turkey, the depreciation of lira continued to play a vital role along with a 15% increase in tourist arrivals.

In Iceland (-14%) due to the collapse of Wow Air and strong Krona contributed to the declining arrival number. The destination is expected to record a downturn in 2019 for the first time since 2010.

The slowdown will allow for a more sustainable and inclusive tourism sector in Iceland and industry experts are now hoping to return to normal growth levels (4-5 % annually) for a more sustainable and inclusive tourism sector in Iceland.

Even though there are external challenges, uncertainties and poor shape of the global economy things appear stable in the European tourism sector.

The risk is not to seize the opportunities at hand by encouraging more sustainable and inclusive tourism approaches.

Eduardo Santander, ETC Executive Director said that the latest report highlights , travel demand in Europe is in a good place, with steady increases in tourism numbers across the board. Despite very real challenges, such as the looming threat of a ‘no deal’ Brexit, and the collapse of several airlines, European destinations continue to post healthy rates of arrivals, which of course is to be welcomed. Meanwhile, European tourism needs to focus on developing long-term sustainable management solutions to enable tourism to flourish, rather than just merely grow.

There are increased arrivals from the US showing significant interest in South-Eastern Europe – Turkey, Greece and Cyprus.

The average increase in global revenue passenger kilometers (RPKs)- an indicator of the airline demand was 4.1% over the past three months which was below the average rate of expansion over the past 10 years of 6.1%.

The year-to-date air passenger growth has slowed more rapidly in Europe than any other foreign region falling from 6.9 % based on date to April to 5.4% based on date to August.

For over several years the load factors have been growing despite the robust capacity growth.

The combined effect of the economic and the non-economic factors associated with a ‘no deal’ Brexit will lead to a 7% drop in UK outbound trips in 2020 and an 85 drop in 2021.

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