Europe’s Mounting Flight Delays Are Slowing Recovery

Good morning from Skift. It’s Wednesday, August 23. Here’s what you need to know about the business of travel today.

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Episode Notes

Europe is experiencing a major air traffic controller shortage. It’s not only delaying flights, it’s hurting the continent’s travel recovery, reports Edward Russell, editor of Skift publication Airline Weekly.

European airspace manager Eurocontrol found flight delays have increased 6% from last year, attributing those disruptions in part to air traffic controller staffing shortages. Russell writes the staffing shortage appears the worst in France and Germany, the two countries at the heart of Europe’s air traffic control system. One industry executive said European air traffic controllers, often run by individual countries, are at least 700 controllers short of target staffing levels. 

Meanwhile, Lufthansa Group CEO Carsten Spohr said in July that air traffic control and other industry constraints would limit growth through at least 2024. 

Next, global investment in the travel industry has dropped from pre-pandemic levels. How much? Roughly $100 billion, writes Global Tourism Reporter Dawit Habtemariam. 

Habtemariam reports that $856 billion was invested in the industry last year. While that’s an 11% jump from 2021, it’s substantially below 2019’s figure. Habtemariam notes worldwide investment in travel and tourism isn’t expected to return to pre-Covid levels until 2025. The three countries with the highest levels of investment in travel and tourism last year were the U.S., China and Saudi Arabia. 

Finally, the U.S. lifestyle and boutique hotel pipeline is projected to grow substantially in the near future, but those forecasts may be overly optimistic, reports Senior Hospitality Editor Sean O’Neill. 

Analysis by hotel consulting firm The Highland Group said developers and hotel groups are planning to open nearly 60,000 branded lifestyle, soft-branded and boutique hotels by the end of 2027. That figure would represent a 29% annual increase. 

However, Kim Bardoul, partner at The Highland Group, said those projections are likely too optimistic. Still, O’Neill writes that developers are interested in lifestyle and boutique hotels because of their recent positive financial performance, on par with the traditional, large hotel properties. And there’s growing demand from guests.