The European Travel Commission has revealed that tourism is continuing to recover in 2023, due to ‘high consumer demand despite stubborn inflation and increasing travel costs’. Jenny Southan reports

The European Travel Commission (ETC) has today released its “European Tourism: Trends & Prospects” report for the second quarter of 2023, which provides a comprehensive analysis of the region’s latest tourism and macroeconomic developments.

So far, the US proves to be the strongest long-haul source market to Europe to date this year, while European air traffic volumes were “edging closer to pre-pandemic levels” in mid-June 2023.

Europe’s tourism recovery is maintaining its momentum despite economic headwinds, reaching about 95 per cent of 2019 levels of international tourist arrivals.

Although inflation and increased travel costs are squeezing consumers’ wallets, travel spending is still prioritised over other discretionary expenses. The latest data available shows that one-quarter of reporting European destinations have surpassed pre-pandemic levels of foreign arrivals.

Miguel Sanz, president of the ETC, says: “It is encouraging to see the positive recovery of international tourist arrivals in the first half of 2023. With this in mind, European destinations must be prepared to effectively manage the increased demand and return of travellers.

“Tourist strategies must embrace travel dispersal in order to support destinations in addressing overcrowding, while also spreading the benefits of tourism to less-travelled areas. Tourism can and should be leveraged as a social, economic, and sustainable force for good.”

Although a dramatic increase in tourism is good for the economy and people’s livelihoods, overtourism is going to be the new problem to contend with (and outbound travel from China still hasn’t got close to pre-pandemic levels).

This month, The Guardian reported that the Acropolis in Athens “will adopt crowd control policies to ease the very modern plague of soaring visitor numbers”.

Consumers becoming increasingly price-driven

This summer, many consumers will make their travel decisions with cost in mind, as weaker economic conditions put pressure on travellers’ budgets. Household finances and discretionary spending will remain strained going into the peak travel season in Europe (June to August), but this should not derail the overall recovery.

Travellers are still showing strong demand for travel despite economic woes. Considering this, it comes as no surprise that price sensitivity will continue to benefit destinations offering more value for money. Recent data up to May shows that value-for-money destinations are performing well, with Serbia (+27%), Bulgaria (+21%), Montenegro (+12%) and Türkiye (+9%) among those leading the recovery.

European air volumes on the rise

The recovery in air traffic volumes was lagging behind consumer demand across Europe in 2022 and early 2023. However, the tide looks to be turning, with data up to June showing recovery edging closer to pre-pandemic levels.

This can be attributed to increased airline capacity across both European and foreign airline carriers, which will hit the market in time for the peak summer months. European flight scheduling is returning to its pre-pandemic 2019 levels, with planned seat capacity at 96 per cent this summer.

The latest data also shows that European international Revenue Passenger Kilometers (RPKs) have continued a steady recovery, achieving 90.8 per cent of 2019 levels in April.

It remains to be seen whether airline capacity can meet demand this summer, although current schedules suggest this will be sufficient. At the same time, potential disruptions from aviation strikes, labour shortages and war-related airspace closures still pose great uncertainty for the sector.

US leads overseas travel recovery to Europe

US travellers taking advantage of favourable exchange rates are expected to drive many European destinations’ recovery this summer. Most recent data shows that 52 per cent of reporting destinations have surpassed pre-pandemic levels of US tourist arrivals so far this year.

With continued high inflation and a potential recession weighing on American households, affordability will be a key factor in holidaymakers’ choice of travel destination within Europe.

Southern Mediterranean destinations such as Portugal (+79 per cent), Türkiye (+78 per cent), and Montenegro (+43 per cent) have reported substantial growth in arrivals from the US market.

In Eastern Europe, Latvia (+135 per cent) and Poland (+51 per cent) also recorded significant arrivals growth from the US. In the case of Latvia, the strong increases could be connected to visiting friends and relatives from the Latvian diaspora living outside Europe, while journalists reporting on Russia’s war in Ukraine and an influx of volunteers and military personnel could be contributing to Poland’s performance.

According to the Vacationer’s 2023 Summer Travel Survey, 85 per cent of adults in the US plan to travel this summer, representing a 5 per cent increase in travel intentions compared to the summer of 2022.

In the UK, British people are eagerly planning holidays despite the need to cut back on expenses. Sacrifices in other areas of life such as eating in restaurants, TV subscriptions and takeaways are being made to ensure that they can afford a holiday. For 61% of Britons, a vacation is seen as crucial to happiness and relaxation.