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6 Aug, 2012

1% Drop in European Travel Projected for 2012


Brussels, 6 August 2012, (European Travel Commission media release) – Major changes are taking place in European travel trends, thanks to the impact of softening economies, a significant rise in Russian outbound and a shift towards the new destinations of Central and Eastern Europe, according to the latest report for the second quarter 2012 issued by the European Travel Commission (ETC).

The report, “European Tourism In 2012: Trends & Prospects, Q2/2012” says that although growth is continuing, it is “uneven” and marked by “mixed performance” across regions. Unless the present peak-travel season does exceptionally well, 2012 will probably end with a 1% decline in overall visitation to Europe.

The Foreword and Executive Summary are being reproduced below. The full report is available FREE by clicking here.

Foreword by Leslie Vella, Chairman, ETC Market Intelligence Group

At the start of the peak summer season, travel in Europe is holding the course established early in the year. Most of our destinations are reporting continued visitor growth in the first half of 2012. It is evident that travel within Europe is supporting much of this growth.

European air carriers report continued strength on European routes and even stronger recent performance on Asian routes. In terms of visitor arrivals, Russia continues to be the strongest performing source market thus far and Japan is continuing its resurgence. Routes servicing North America have underperformed, however.

Occupancy rates of European hotels have trended toward flat in total. Yet, hotels in both Eastern and Northern Europe have experienced the largest share of gains in occupancy through May. While occupancy rates in Western Europe are essentially flat, hotel occupancy has fallen in Southern Europe.

And reason for caution remains. Hotel performance data continues to present signs of mixed performance with 16 out of 26 European countries experiencing a decline through May of 2012.

Austerity continues to be a drag on the global economy, prompting central banks to loosen monetary policy in order to provide liquidity to the financial sector. These actions come as leading indicators of economic activity in many economies indicate slowing and the US recovery becomes increasingly uncertain.

In the face of these headwinds, Tourism Economics forecasts visits to all of Europe are expected to decline nearly 1% in 2012 with only moderate growth of 0.9% expected for 2013.

This peak travel season will largely indicate the resilience of our industry for the year. We trust you will find the analysis in this report helpful as you track your own destination’s performance and seek to anticipate future trends.

Executive Summary

(+) In the first half of 2012 European travel has exhibited some resilience in the face of the weak and uncertain global economic environment. Most reporting destinations have experienced growth in foreign visits and nights.

(+) At the moment, the global economy is restrained by government austerity and a softening in export demand with leading indicators suggesting most major economies are slowing. In response to deteriorating economic conditions, global central banks have lowered interest rates.

(+) This uncertain economic backdrop, however, is not yet causing significant falls in tourism demand, but the trend is of slowing growth.

(+) Air travel has also shown some encouraging signs, with European airline passenger growth around 6% through mid-June. European airline load factors have strengthened and, on average, continued to rise.

(+) However, airlines passenger load factors have increased only marginally as the year is progressing. Demand remains healthy while capacity continues to be added throughout 2012. But the small rise in load factors indicates the increase in demand may be less than airlines had expected.

(+) Hotels data show signs of mixed performance throughout Europe. While Central and Eastern European destinations have performed well, a significant number of Southern European destinations have recorded falls in hotel occupancy during the first half of the year.

(+) Overall, a moderation in hotel occupancy rates in most European sub-regions is apparent.

(+) Tourism arrivals data for the first half of 2012 reveal an uneven picture of growth in the major European source markets. Meanwhile, Russia continues to be a star performer, with strong growth in all markets. While demand in Japan continues to recover, the struggle for US market share continues.