Preliminary results for the first three quarters of 2013 point to a strong performance of European tourism as growth in international visitors remains well above the long-term trend, according to the ETC report “European Tourism in 2013 – Trends & Prospects”. Targeted strategies are the solid foundation of Europe’s growth, although campaigns would gain leverage through improved coordination between tourism and aviation strategies.
The European tourism industry is achieving record new high levels of demand in 2013 as tourism arrivals continued to grow throughout the year. Most of the 32 European destinations reporting foreign visits through May-August post positive growth. The peak summer season sees acceleration in demand in some of Europe’s largest destinations, including UK (+6%), Spain (+5%) and Italy (+3%). Flat growth is reported only by Scandinavian destinations, while Cyprus (-5%) and Belgium (-2%) continue to struggle.
Visitors remain cost-conscious and consolidate the trend towards shorter stays, as suggested by a more moderate growth in overnights compared to arrivals. A notable exception is Bulgaria (+6% in arrivals and +8% in overnights), which actively tackles seasonality through product diversification.
Europe’s significant growth is driven by the strong rebound of international travel from established source markets. Travel from UK and France eventually went up, on top of a strong performance of German travel, which offsets this year negative performance of the Dutch and Italian markets. Travel from the US also remains solid, although growth somewhat slowed throughout the year, reflecting business and consumer confidence stall over fiscal uncertainty.
Emerging markets become increasingly more important as source of visitors. Travel demand from Russia persists at high growth levels, turning this market into a consistent source of visitors for a growing number of ETC destinations. Travel from both China and India continues to grow, as growth in middle class households able to afford international travel continues to offset macroeconomic concerns.
After a false start, Japanese outbound travel shows signs of improvement but the benefits of economic stimuli remain to be seen.
Destinations capitalise on targeted strategies, but remain exposed to changes in stakeholders’ agendas
Targeted strategies are the solid foundation of Europe’s growth. Ireland (+7%) reaps the benefit of “The Gathering Ireland”, a global campaign targeting the 70 million people Irish diaspora, while Germany (+4%) consolidates growth through a theme year focussed on young travellers. Other ETC members capitalise on the international exposure received through large-scale events, such as Italy on the occasion of the Pope’s election, Lithuania (+8%) through the Presidency of the EU Council and Slovakia (+16%) celebrating Kosice as European City of Culture for 2013. Strengthening the perception of a good value-for-money tourism destination contributed to make Hungary (+6%) increasingly attractive to international travellers.
The coordination between tourism and aviation -involving route expansion- turned out to be crucial for the success of destinations such as Malta (+9%), Croatia (+6%) and Portugal (+8%). On the opposite side of the coin, growth in Estonia (+3%) and Finland (+0,2%) is subdue due to reduced accessibility from key source markets.
Tax burden could halt European tourism take-off
As tourism remains a significant source of income and labour in many European economies it may furthermore be seen as an increasingly appealing source of government revenues through additional taxation. Instead, tourism resilience should be an incentive for governments to build a legislative framework that encourages growth in this sector, as this would spread over the broader economy. “Croatia is a success story in this respect”, says Eduardo Santander, Executive Director at ETC. ”The Croatian government approved a 50% cut in VAT on tourism services at the beginning of this year. This measure provided tourism businesses margin to compete on price with more cost effective destinations. International visits to Croatia grew by a promising +4% through August and tourism positively contributed to economic growth”.
The full report can be downloaded from ETC’s corporate website under the following link: http://www.etc-corporate.org/reports/tourism-trends.
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