Europe's top visitor destinations drive occupancy growth

Iceland maintained its tourism momentum despite concerns about accommodation capacity and infrastructure constraints.

European tourism remained strong over the 2017 summer season, which the European Travel Commission credits to “encouraging economic conditions” in Europe’s major source markets.

According to the ETC’s ”European Tourism 2017-Trends & Prospects” report, international tourist arrivals to Europe grew 8 percent in the first eight months of the year compared to the same period in 2016. Despite lingering security concerns and geopolitical tensions, most destinations (32 out of 34) saw increases in tourist arrivals with over half enjoying double-digit growth.

Iceland (+30 percent) maintained its momentum despite concerns about accommodation capacity and infrastructure constraints. Destinations previously affected by safety challenges appear to be recovering; Turkey (+26 percent) posted an impressive rebound helped by the surge in Russian outbound flows while Belgium (+12 percent) also saw healthy growth. Top performers were also Southern/Mediterranean destinations Slovenia, Serbia (both +19 percent), Malta (+17 percent) and Cyprus (+15 percent). Spain showed its resilience to the August terror attacks in Barcelona, reporting a 10-percent increase in visitor arrivals.

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Still, the report noted, in spite of positive industry indicators, caution must be exercised as ongoing safety and security challenges may redirect travelers to other European destinations, affecting the overall travel demand.

Across Europe, accommodation performance was largely positive with RevPAR growth of 3.9 percent for the region as a whole comprised of occupancy growth of 3.4 percent while ADR rose just 0.5 percent (priced in euros). Occupancy performance lags the international arrivals growth due to some offsetting growth in supply and a further drag from domestic demand in some countries.

Top Source Markets

“European tourism demand is set on an upward trajectory,” Eduardo Santander, executive director of the European Travel Commission, said in a statement. “This momentum is expected to mark the eight consecutive year of growth despite safety and geopolitical challenges. To sustain growth tourism stakeholders, need to unite efforts and develop initiatives to strengthen the European tourism industry.” 

More than three quarters of destinations reported some form of growth from the UK year-to-date. A weakened pound failed to deter British holidaymakers to travel internationally. Russian travel flows to Europe are recovering after years of decline. Among 33 destinations, all but one enjoyed a rebound from this market. Turkey featured the greatest growth (+800 percent) after Russia lifted travel restrictions of its citizens visiting Turkey.

European destinations saw substantial increases in arrivals from China with growth estimated at 17 percent in 2017. The strengthening of the Chinese economy and the rapid expansion of its middle-class continue to stimulate outbound travel. Despite some recent weakening, a stronger US dollar continues to fuel transatlantic trips with year-to-date estimates pointing at a 14 percent increase in arrivals. Indian travel to Europe also delivered a solid performance (+14 percent). Positive consumer confidence and private consumption are both expected to continue boosting travel demand and increase the importance of India as a source market.