Strong Outlook for Tourism Recovery in Europe But Staff Shortages and Cost of Living Crisis
- As concerns over Covid-19 wane, Europe is expected to recover 70% of pre-pandemic travel demand by 2022
- The sudden increase in consumer demand along with staff shortages poses serious challenges for the sector in the summer months.
- The long journey to Europe continues to lag significantly behind the short and moderate recovery
Uncertainty caused by worsening inflation, prolonged war disruptions and rising Covid-19 rates continue to put at risk the tourism outlook across Europe. However, the European Travel Commission (ETC) predicts willingness to travel this summer will prevail. The latest edition of ‘Trends and Prospects in Tourism in Europe’ The quarterly report indicates that the recovery is in full swing heading into the peak summer season of 2022, with consumer savings accumulated by the pandemic expected to support travel demand.
The ETC predicts that Europe will recover 70% of pre-Covid travel demand this year. For 2022 to date, Bulgaria (-8%), Serbia (-10%) and Turkey (-14%) have seen the strongest rebounds in tourist arrivals. Monaco (-22%), Croatia (-30%), Iceland (-35%) and Slovenia (-37%)-the only destinations reporting data until May-also showed strong recovery. At the other end of the spectrum, Latvia’s geographical proximity to Russia is slowing the country’s tourism recovery from the pandemic (-63%) following cancellations in multiple hotel reservations. Slovakia and the Czech Republic were also among the destinations in Eastern Europe that exceeded the 50% decrease.
Commenting following the publication of the report, Luís Araújo, President of ETC: “The restrictions on Covid-19 have been lifted, and people are eager to make up for two years of lost travel opportunities. We are witnessing a faster recovery than expected by travel businesses in Europe, and the staff shortages can be obstacles to full recovery.Returning talent, and making careers in the sector more attractive, is the top priority for Europe’s tourism recovery in the coming months.It is also important to continue to the EU is monitoring the impact of inflation on the cost of living – Europe must do everything within its power to ensure that travel does not become inaccessible for the average European. “
High inflation is likely to shift demand to domestic and short-haul travel
While travel sentiment in Europe remains strong, the savings base – which is expected to boost growth – has been reduced by the rising cost of living due to rising energy and food prices. Moreover, the steep acceleration in fuel prices directly increases the price of travel, or more specifically transportation. For consumers, price increases are likely to shift preferences to lower-cost options such as staycations, or more affordable modes of transportation to neighboring countries.
As a result, short and medium travel is expected to continue driving European tourism recovery. Arrivals from long-haul markets are still lagging significantly, especially in Asia where travel sentiment is hampered by ongoing restrictions on Covid-19. Although sentiment was more positive in the United States, the recovery was still slower than expected. U.S. citizens returning from Europe are required to take PCR tests before traveling until the end of May/beginning of June, which may have hampered the need.
Talent shortages across Europe pose another threat to confined travel needs
Given the stronger than expected return of demand during 2022, continued delays in labor supply are creating staff shortages across the travel and tourism sector in Europe. As a result, many destinations in Europe may struggle to facilitate high demand this summer. The main reasons cited for these shortages were the restricted pool of available workers, long lead times in security clearance and the sector viewed as an unstable job opportunity after Covid.
Although the shortage of hospitality staff is acute, the current shortage of workers in the aviation sector dominates the headlines. Approximately 190,000 European aviation workers were laid off during the pandemic. Despite airlines and airports responding to recruitment drives, the industry is unlikely to respond during this summer’s peak season. The impact of this shortfall is already being felt – in the first weekend of June, the Netherlands saw cancellation rates of up to 11% and up to 4% in the UK. Airports are reducing the number of flights to reduce travel disruption that is expected to continue until the summer months as some air carriers announce strikes and cancel flights due to labor shortages.
The full report can be downloaded here.
About the European Travel Commission
Founded in 1948, the European Travel Commission is a unique association in the travel sector, representing the National Tourism Organizations of European countries. Its mission is to boost Europe’s sustainable development as a tourist destination. Over the past few decades, ETC has positioned itself at the forefront of the European tourism scene, establishing its expertise and establishing partnerships in tourism areas, based on promotion, market intelligence and best practice sharing.