The latest quarterly report “European Tourism – Trends & Prospects 2019” by the European Travel Commission (ETC) shows that demand for tourism in Europe is expected to maintain an upward trajectory over 2019. Despite uncertain trade relationships between China and the US and a slowing Chinese travel demand, a growth rate of 3.6% is predicted, which is more in line with the annual historical average from 2008-2018, but lower than that of 2018 (6.1%).
The Balkan region was the top performer in terms of arrivals growth with Montenegro (+50%), Slovenia and Greece (both +8%) showing the benefits of expanded tourism season and niche marketing. Montenegro has benefited from improved air transport accessibility and several promotional activities implemented by national tourism authorities. For Slovenia, a recent win for Ljubljana and Bled’s runner-up spot at the ITB Berlin (the largest tourism fair in the world) is indicative of the country’s efforts to attract travel demand. On the other hand, Iceland (-11%), Romania (-7%) and Estonia (-2%) have reported a decrease up to April. In the case of Iceland, the recent collapse of low-cost carrier WOW Air in March will have exacerbated this decline, whilst Estonia decrease might be explained by the reduction in arrivals from Russia – one of its largest source markets – which were down 8.7% compared to the same period a year ago.
European airline growth outperformed global air passenger growth
In global terms, Europe has outperformed all other regions, posting 7% growth in revenue per kilometre (RPK) in the first four months of the year compared to last year. This comes despite the pressure of increased demand and constrained air-traffic control capacity, which has had the impact of increasing possible delays and cancellations, which already had an estimated cost of €17.6bn in 2018 to the EU economy.
Among Europe’s key long-haul source markets, the US and China continue to stand out in terms of their contributions to European tourism growth accounting for a share of 11% and 4% respectively. Chinese travellers concentrated mainly in Southern/Mediterranean destinations: Montenegro (+150%), Cyprus (+62%), and Croatia (+44%). Another fast-growing destination in terms of Chinese arrivals was Lithuania (+77%). Interestingly, despite a possible slowdown of the American economy, Greece (+47%), Turkey (+37%), and Cyprus (+33%) saw the most significant increases in arrivals from the US early in the year.
Eduardo Santander, Executive Director of ETC said “It is clear to us that maintaining growth in 2019 will be much more challenging than in 2018. Europe must align its market mix, identify under-served segments and further expand its understanding of pan-European product development. Through the promotion of transnational experiences, ETC is seeking to raise visibility for the plethora of products available and to create awareness of the region’s diversity. An essential pillar to achieve the sustainable growth of European tourism are public-private partnerships following a focused approach with common and achievable goals.”
Special focus: the impact of “Tourism Years”
“Tourism Years” have become a more prominent feature of bilateral relations between countries in recent years, with significant effort being made to forge partnerships with untapped and developing markets. Tourism Years serve a valuable purpose: they provide an impetus for connectivity growth between countries and help destinations to broaden their appeal across source markets.
As shown by the success of the EU-China Tourism Year in 2018, such partnerships can act as a catalyst for faster growth from developing and long-haul markets. In addition to helping EU destinations gain share of Chinese long-haul demand, the EU-China Tourism Year also corresponded with some market share growth for non-EU ETC destinations over the same period. This spill-over is a function of Europe’s compact geography and the relative proximity of many destinations, allowing long-haul travellers to maximise the value of their long-haul trip.