The head of the European Travel Commission says with a second wave of Covid-19 sweeping Europe, it is now more important than ever for European nations to join forces and agree on common solutions to a number of current burning issues.
Speaking following the publication of the ETC’s latest quarterly report, the organisation’s Executive Director Eduardo Santander said agreement must be found on common solutions, “not only to curb the spread of the virus but also to support tourism’s sustainable recovery, restore travellers’ confidence, and most importantly protect the millions of businesses, jobs, and enterprises that are at risk, so they can survive the economic fallout.”
Mr Santander (pictured above) says the direction of the economic recovery across Europe will depend significantly on the recovery of the tourism sector, a sector which generates close to 10% of the EU’s GDP and accounts for over 22 million jobs.
The ETC report indicates that a new surge in Covid-19 cases and the reintroduction of travel restrictions have halted European tourism recovery with international tourist arrivals to Europe down 68% halfway through the year relative to 2019.
The easing of pandemic restrictions across Europe led to a slight pick-up in July and August 2020 compared to earlier months, signalling people’s enthusiasm and desire to travel again. However, the recent re-imposition of lockdowns and travel restrictions has, says the report, quickly halted any chance of an early recovery. Looking at the months ahead, heightened uncertainty and downside risks continue to dampen the outlook with European arrivals set to decline 61% in 2020.
Mediterranean destinations Cyprus and Montenegro saw the steepest falls in arrivals at a distressing 85% and 84% respectively, attributable to a higher dependency on foreign travellers. Among the other countries most impacted are Romania where arrivals plunged 80%; Turkey (-77%); Portugal and Serbia (both -74%). Island destinations, Iceland and Malta (both -71%) also performed poorly, challenged by their geographical location and strict border restrictions.
Conversely, Austria appears to have benefitted from pre-Covid-19 winter travel at the start of the year, resulting in a decline of just 44% for the year to September. A greater reliance on short-haul trips also placed Austria in a strong position to attain a less volatile recovery as restrictions in the country have eased much quicker than other countries.
Hotel sector – an even spread
The impact of weak demand on Europe’s hotel industry appears to be evenly spread across all sub-regions, with occupancy declines within 10pp of each other. Southern Europe was the worst hit region with hotel occupancies 56.4% lower compared to a year ago.
All destinations in Europe have suffered declines in hotel occupancy this year based on data to September. The best performing destination by this measure was France wherein occupancy rates were just 42% lower compared to a year ago. In the UK (second best), occupancy rates were 44% lower compared to 2019. In both cases, a degree of domestic substitution has helped to offset some of the loss of foreign travel demand.
Future outlook & shift in traveller preferences
The importance of domestic and intra-European travel cannot be understated in terms of the role it will play in the recovery of the tourism sector over the coming months. In a welcome update, the latest forecasts predict a quicker rebound for domestic travel in Europe, surpassing 2019 levels by 2022. European short-haul arrivals are also projected to bounce back faster by 2023, being helped by a swifter easing of travel restrictions and a lesser perceived risk compared to long-haul trips. Overall travel volumes are now projected to return to pre-pandemic levels only by 2024.
The Covid-19 pandemic is also impacting destination choices within particular European countries. The summer season has shown a significant increase in those seeking to travel to rural and coastal locations, clearly as a result of concerns regarding visits to highly-populated urban locations, where it is more difficult to practice social distancing.
This change in travel preferences may ultimately mitigate the issue of over-tourism and allow destinations to boost sustainable tourism demand. Increased travel interest for secondary destinations will relieve some popular tourist hotspots that previously struggled to cope with excessive travel demand and will help spread the economic benefits of tourism more evenly within countries.
Domestic travel is set to attain a swifter rebound, exceeding 2019 levels by 2022, while international travel will encounter a protracted recovery, remaining below 2019 levels until 2024.
A combination of lingering travel restrictions, smaller disposable incomes and travel budgets as well as associated confidence effects will contribute to this slower recovery for international travel.
The need for quarantine and/or testing on arrival in some destinations as well as enduring health concerns will also act as significant impediments for international travel and will likely increase substitution effects for domestic travel.