In 2020, due to the COVID pandemic, Europe recorded a drop of 70% in international arrivals. According to the WTTC (The World Travel and Tourism Council), 3.6 million jobs were lost in the EU, since the start of the pandemic.

The sector showed a resilient and innovative approach to minimize the crisis, and, finally, in 2022, things started to feel like a new beginning. Worldwide, according to UNWTO World Tourism Barometer, international tourist arrivals almost tripled from January to July 2022, a growth of 172%, compared to the same period of 2021. Globally, in July 2022, the sector recovered almost 60% of the pre-pandemic levels. This steady recovery was a result of strong demand for international travel and of the decrease in sanitary travel restrictions. In Europe, from January to March 2022, we had an increase of 225% on tourism accommodations, compared with the same period in 2021. All looked good in a macro vision, but the Ukrainian war created a lot of new challenges, specifically for tourism in Europe.

Firstly, a challenge in demand. Tourists from Ukraine and Russia spent an average of 45 billion US dollars per year on international travel, mostly to southern Mediterranean countries. These two markets are almost paralyzed for European destinations. Regarding arrivals from around the world, countries that are near the border of the war, were also heavily penalized.

Poland, Bulgaria, Croatia, Estonia, and Hungary, saw a decrease in bookings between 30 to 50 percent since the beginning of the Russia invasion to Ukraine. Of course, southern countries like Portugal and Spain felt an increase on demand. But it was not enough.

There is new global challenge in operation costs, that affects all destinations in Europe.  Inflation and consequent rise of energy and food costs are putting a lot of pressure to operational management, with hotels and restaurants trying to change services blueprints to accommodate the escalations in prices.

Thirdly, there is the humanitarian and social challenge, with a lot of political tension between differently affected European countries and the instability due to fear of economic stagnation and refuges migration.

We must also address the climate challenge, with droughts, wildfires and heavy rain impacting the summer in sunny south Europe.

In this scenario, how can the sector strive and recover?

In a macro-political level collaboration is the keystone. We need flexibility to approve different measures, to different realities within Europe and we must continue in a path of differentiation, innovation, and human resources qualification. Involving both local population and business owners in creating value for cities and regions (the final scenario for accommodations), and offering unique experiences is crucial. Following the European Union’s Smart Tourism Directive, tourism stakeholders can also find great advantages in building their tourism strategy with an integrated digital approach. Providing an online tourism infrastructure, with private and public integrated offer, focused on mobility, accessibility, and sustainability, will attract more demand, and facilitate the cocreation of value, fostering local coloration between entrepreneurs, one-to-one personalization with travellers, pre-booking and direct feedback, and references. To create such and ecosystem, the online user experience must be flowless and coherent with the real experience in the physical world. Happily, today we have the culture, knowledge, and technology to master this innovation challenge.

Our team of experts is available to help your company navigate this innovation water.

Please reach out to one of our consultants to continue this conversation.

Tânia  Areias, Digital Marketing Consultant from Auren Portugal