A prolonged Russia-Ukraine war could quickly shift this cautious optimism and cause more devastating impacts for Europe's tourism industry. For now, getting ahead of the right messaging and ensuring seamless movement amid an ongoing pandemic will be key in boosting consumer confidence.
The direct and indirect impacts of the Russia-Ukraine war on European tourism are becoming clearer, while also difficult to predict far into the future — and it’s a mixed bag of both good and bad news for an industry that accounts for approximately 10 percent of gross domestic product in Europe and provides 33 million direct and indirect jobs.
European tourism’s steady recovery on a global scale has slowed, but it hasn’t completely stopped it as when the pandemic first hit. Pent-up demand for European travel is helping to mitigate a harsher blow from the Ukraine war, as consumers are adapting to uncertainty and still eager for trips to western Europe. Intra-regional travel demand is holding steady, boosting the sector’s resilience ahead of Easter and summer, and the bounce back of transatlantic travel continues to stick.
Those were the conclusions drawn by the European Travel Commission on Wednesday in its first official assessment since the start of the Ukraine war, analyzing how Europe’s tourism recovery will fare amid war, geopolitical shifts, inflation, and supply chain disruptions driving up the cost of travel.
“We have to be mindful of the impact this war will have on the European economy and on the tourism sector,” said Luis Araujo, president of the European Travel Commission. “This crisis will cause another setback in the recovery of our European tourism, especially in eastern European destinations while also threatening the trust and confidence in traveling to Europe.”
Destinations that are in close geographic proximity to Russia and Ukraine, such as the Baltic countries, as well as Mediterranean coastal towns that were once Russian traveler favorites, will feel more of a direct hit, according to ForwardKeys. But after two years of pandemic restrictions, interest in western European tourism giants, such as Spain, Greece, France and Italy, persists.
“There’s been a negative impact; it put a brake on a recovery trend that looked promising,” said Olivier Ponti, vice president of insights at ForwardKeys, referencing data from the first two weeks of the Ukraine war. “But recovery is still under way for the leisure segment; in the two weeks following the invasion, bookings were only 22 percent below 2019 and summer also. The resilience of intra-European travel is good news for the sector.”
Adjusted forecasts for visitor arrivals also show this deferred recovery, but it is not totally derailed, said David Goodger, managing director for Europe and the Middle East at Tourism Economics. “Western Europe still sees recovery by 2024 with large strides this year though slightly less than previously hoped.”
Transatlantic travel also holds a firm grip, Forwardkeys’ Ponti agreed.
In other optimistic news, consumer sentiment analysis, based on social conversations, confirms that people continue to see Europe as a safe destination, said Olivier Henry-Biabaud, founder of global travel research firm TCI/TRAVELSAT.
“One in three social conversations about travel in Europe refer to the Ukraine crisis, but this means two thirds aren’t,” said Henry-Biabaud. “The current situation is showing a drop but it’s not worse compared to the dramatic decline we had at the start of the covid crisis.”
Henry-Biabaud added that Europe’s image so far is most impacted in North America, although it isn’t a huge impact for now. “The conversations are more about is it time to postpone, people are questioning if it’s safe or not to go back to Europe, more than massively canceling.”
Nevertheless, compared to the rest of the world, Europe is now lagging in its global recovery pace.
“The European travel sector at large is paying the price already as its competitive situation is deteriorating — a seven percent decrease in bookings since the beginning of war and at same time all other regions were improving,” said ForwardKeys’ Ponti.
How can tourism offices boost tourism amid the challenge of inflation and rising costs along the travel supply chain?
Boosting confidence with simpler rules on inter-regional travel is key, panelists said, as well as educating consumers and being transparent on the cost of visiting, as well as businesses remaining open to North American travelers.
“It’s about informing, not promoting, and then keeping the desire for Europe — making sure people don’t enter into this ‘travel is not ethical today’,” said TCI’s Henry-Biabaud. “The message of travel as a peacemaker, and promoting passion-based tourism like art, culture, food, sports, nature, will help escape a bit the anxiety of all these war related conversations.”
Henry-Biabaud added that the positive images associated with the crisis will help Europe’s destinations, showing the region as a unified community that’s opening doors and hearts to refugees.
But it’s also clear that the longer the conflict lasts, the more pronounced the impact could be on European tourism, and that’s difficult to predict far ahead.
Perhaps the silver lining is indeed that the war has now given more impetus than the pandemic might have for the European travel sector to unite, collaborate and lean on social sustainability — making it simpler for consumers to travel across borders and give back to local economies in light of the crisis while making a stand against war — as the region must now work harder to reposition itself as the world’s top destination.
“Europe is resilient and we will overcome this If we work together,” said the European Travel Commission’s Araujo. “We’ve seen this inside the European Travel Commission, with a commitment of every national tourism office to not only coordinate a collective answer, but share our experiences in terms of the future of tourism inside Europe and in telling the world that this is not acceptable, that we need to put a stop to the war and we need to start traveling again.”
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Photo credit: London's Trafalgar Square on a sunny day in March 2022, ahead of the return of Skift Forum Europe. Lebawit Lily Girma / Skift