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European tourism sector continues to defy increased global risks

European tourism sector continues to defy increased global risks

eTN:

European tourism sector continues to defy increased global risks

According to the European Travel Commission’s (ETC) latest ‘European Tourism Trends and Prospects’ report, Europe enjoyed a healthy 4% increase in tourist arrivals in 2019 compared to 2018. While the rate of expansion was slower than previous years across certain individual destinations, the overall regional performance remains in positive territory. Increasing numbers of tourist arrivals generate income and support employment and investment in Europe, not only acting as a catalyst for economic expansion, but also contributing to and demonstrating the social and cultural value in the region.

Montenegro, Turkey, and Lithuania registered double-digit increases in tourist arrivals, whilst Portugal, Serbia Slovakia and The Netherlands also outperformed the average. Montenegro’s 21% surge was shored-up by greater connectivity and infrastructure investment, while Turkey (+14%) is set to invest heavily and diversify its tourism promotion activities throughout 2020 with the aim of increasing the volume and quality of tourists. Increased air connectivity has helped Lithuania’s (+10%) performance, while the recent award of most “Accessible Tourist Destination 2019” to Portugal (+7%) reflects the country’s efforts to promote accessible tourism. Visa relaxation policies and bilateral business relations between destinations and source markets also continue to be key factors in encouraging travel, particularly in Serbia (+7%).

However, it hasn’t been entirely
positive for all European destinations. In Romania (-4%) continued challenges
related to infrastructure and tourism promotion remain, while the demise of WOW
Air and a strong Krona explain the steep decline in arrivals to Iceland (-14%).

The report also includes an analysis of tourism taxes and focuses on how such taxes could be levied in an environment where competition has all but eroded any other form of price stimulus.

US travelers encouraged by a supportive economic environment, while unforeseen events are expected to hamper Chinese outbound travel

The report’s findings suggest that positive economic conditions in the US are also encouraging travelers. Supportive economic conditions have spurred the value of the dollar against the euro, making Europe an affordable travel destination. The US economy is signalling a moderate rate of expansion and, although GDP growth is expected to slow somewhat in 2020, record low unemployment rates coupled with rising wages have supported a significant uplift in consumption and consumer confidence. Most European destinations recorded increased US tourist arrivals at the end of 2019, with fastest growth registered in Turkey (+30%), Cyprus (+27%) and Montenegro (+26%).

While the
US-China trade truce is expected to help restore business confidence,
challenges in China remain following the outbreak of COVID-19 during the recent
Lunar New Year, a key travel season. Although necessary, the measures
implemented to prevent the spread of the virus (e.g. travel bans and route
cancellations) intensify the challenges and concerns about the impact of the
outbreak on the global tourism sector and represent a significant downside risk
to Chinese travel demand in 2020. According to Tourism Economics’ forecast,
European destinations will see Chinese arrivals in the range of 7% (most likely
case) and 25% (downside case) lower in 2020 compared to the pre-crisis
estimate. All that being said, 2019 finished strongly for Chinese travel to
Europe with a handful of European destinations receiving a soaring influx of
Chinese travellers, namely Montenegro (+83%), Serbia (+39%), and Monaco (+38%).

2020 threats and future strategies for success

Overall,
European tourism is resisting the pull of major global downside risks,
including concerns of worldwide economic slowdown or conflict, global health
crises, sustainability raising concerns and climate disasters. Despite this,
ETC Executive Director Eduardo Santander is encouraging the tourism industry to
remain vigilant: “Notwithstanding reduced trade tensions internationally and
further clarity surrounding Brexit, heightened risks cannot be overlooked. The
sector must seek to mitigate against these risks given the importance of
tourism for European economic and social development. Diversifying marketing
and promotion strategies, addressing shifts in consumer behaviour,
strengthening collaboration among destinations and increasing measures to foster
the sustainable development of tourism can all help destinations to remain
competitive in the long run.”

With this in
mind, it is also important to note that growth is not an ultimate measure of
success for the tourism industry. The sustainable development of a destination
is necessary for it to remain competitive in the long term and avoid being the
victim of its own success. The sector will need to develop a new understanding
of success going forward.

eTurboNews | Trends | Travel News

Source: eTurboNews Syndication