Summer Travel Boom Hurts Domestic Tourism and Prices Out Locals

Skift Global Forum was held in New York City on September 26-28, 2023. Read coverage of the event at the link below.

This past summer, Instagram feeds were plastered with videos of tourists in Italy. You’d see a video of the Trevi Fountain with just a few Italian models taking photos – then a more realistic video with swarms of sweaty tourists.

That reality could drive locals out of their country when looking for holidays near to home, said Greg O’Hara, founder and senior managing director of Certares, the private equity firm that owns Internova Travel Group and has a joint venture with American Express in its business travel unit.

“Italy is largely a domestic vacation market. Italians vacation in Italy. This year, more Italians went to Tunisia and Egypt than Italy,” said O’Hara at the Skift Global Forum 2023. “The reason for that is two-fold: The experience has changed for them. Capri this summer felt like downtown Cincinnati. It was [full of] everybody running around the place.”

“Second: All those people coming in priced the Italians out of their own market. There are very few people in Italy who will pay 2,000 euros for a four- or five-star hotel on the Amalfi Coast. The Americans seem fine doing that.”

O’Hara himself lives in Italy. Earlier this month, Venice dodged being added to UNESCO’s list of endangered sites, as the historic canal destination has struggled with mass tourism and its ecological effects.

A UNESCO committee decided not to add Venice to the organization’s World Heritage List in Danger, disregarding a recommendation from experts and sparing the Italian government from an embarrassing verdict on the city’s condition.

Domestic Travel Wins

On the other side of the coin, O’Hara singled out the Middle East region for its “spectacular” domestic travel market. Saudi Arabia, in particular, he said, is now managing to hold on to many of its deep-pocketed locals who used to holiday in places like London.

“Everybody has been reading about the Middle East. The regional travel numbers are spectacular, it kind of reminds me of China. Investments there are going to be interesting.”

“They’ve got this tourism minister in Saudi Arabia who has a huge vision. Oman is the same; Dubai has been a spectacular success. They are giving people in that region things to do they couldn’t do before.”

“People were going to Saudi for Umrah or Hajj, then left to go to Dubai or somewhere else. I suggest you pay attention to this: By my count, Saudi is spending a trillion dollars on developing the area.”

Skift Global Forum 2023 Coverage