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As summer progresses and spring shifts into the rearview, travelers and tourists have begun to flock to major tourism and leisure markets across the globe in search for a place to unwind.

The world tourism industry, like any other industry is driven by demand. The Eurozone, which is the global leader for tourist arrivals, again has reason to be excited this travel season despite the recent economic turbulence.

The opportunity for leisure or business travel in the euro area couldn’t be better. A weak global economy, the steep fall in the euro and the fall in oil prices can be seen as a positive. These factors will work to pull more inbound travel to the euro area this season and could be a welcomed economic boost for the 19-country bloc.

“(European) tourism has grown substantially over recent decades as an economic and social phenomenon,” said Dr. Larry Dwyer, who is a professor of International Economics at the University of New South Wales, for the Sustainable Tourism Cooperative Research Centre (STCRC).

Europe has a very robust tourism industry, what with the presence of some of the world’s best markets, cities and attractions.

The region accounted for 41 percent of worldwide international tourism receipts in 2014, which generated $509 billion in exports, according to a United Nations World Tourism Organization (UNWTO) report. The euro area alone accounted for 30 percent of world tourist arrivals in 2013.

Despite its place as the world leader in travel and appeal, the region may need the travel sector now more than ever.

The euro has been falling steadily against the dollar since July of last year, and as of Monday afternoon, it was trading at $1.09, down from trading at around $1.50 in 2008, which opens up the door for a spending spree by inbound tourists with stronger currencies traveling to the continent.

Shockingly, some economists and researchers believe the euro might dip to around $0.80 by the end of the year, which could lead to larger inbound travel numbers during the holiday season and, subsequently, more consumer spending and a happy economy.

“The benefit of the stronger dollar will be experienced by Europe both this year and next year, provided that there’s not a reversal in value,” said Sacks, who is the president of Tourism Economics.

It’s worth noting that if the Federal Reserve decides to raise interest rates later this year, foreign investors will more than likely shift to U.S. markets, strengthening the dollar even more and making that much easier on U.S. outbound tourists at the expense of other sectors of the global economy.

“What we’ve seen historically, is that exchange rates do effect traveler decisions,” Sacks said. “Generally speaking, when we’ve seen a movement of 10 percent on an exchange rate, it drives an incremental change in travel of 2 percent.”

The tourism sector is important in that it will increase exports, boost headline prices and effectively work to create jobs—albeit some temporarily, in the short term—for some major euro markets that are lacking in labor force figures, such as Spain and possibly Greece.

According to the European Commission, the travel sector employs around 9.7 million people in 1.8 million businesses. And, according to the UNWTO, international tourist arrivals worldwide are expected to increase 3.3 percent per year from 2010 to 2030 to reach 1.8 billion by 2030, which can only help both long-term and temporary job prospects in the region.

The enduring weakness in the Eurozone economy can also be beneficial through domestic travel. With a weak euro, European tourists will be less likely to travel abroad and outbound travel numbers will fall. Instead, tourists will travel in the region, generating more revenue for the sector.

“Economic weakness within the Eurozone itself can actually be a benefit,” Sacks said. “What it does is it tends to internalize travel. Instead of Europeans traveling outbound to other parts of the world, they tend to travel within the region.

“Costs are less for travel and they can also do shorter length trips, which reduces costs as well.”

Also, hotel occupancy and room rates as well as length of stay for inbound tourists and domestic tourists play a fairly significant role, adding to jobs numbers and increasing revenue.

“Rates have been badly battered over the financial crisis,” said Sophie Perret, who is a director at HVS Global Hospitality Services, a hospitality sector consulting firm. “We’re in the phase of recovery, I would say.

Perret said there was a 3 percent increase in demand and an increase of 8 percent in rates among hotels consulted by HVS in March.

“Over 10 percent more revenue should be available for hotels at the European level. Occupancy hasn’t changed much but the focus should be on the rate,” Perret said.

There were around 562 thousand tourist accommodation establishments active and providing over 30 million beds within the entire European Union in 2013.

“It will always be a positive thing to have,” Perret said. “The more leisure you have the more occupancy you have and the more you can increase your rates.

“So yeah, it can only do good.”


The American Tourist in the Eurozone


Caroline Kruis is a New Yorker currently traveling in the Eurozone for the second time “just cause.”

She and a friend decided to take three months vacation and are currently traveling through Portugal and Spain and plan to venture north to France within the next week.

Kruis’ first stint in Europe was in 2011. She spent about a month studying in Paris before traveling to Amsterdam and then Venice.

At the time of her first visit, the euro was trading at around $1.44.

“I studied in Europe about four years ago and the exchange rate was much worse,” Kruis said in an email.

As of right now, Kruis said she’s been to Lisbon, Portugal and three different markets in Spain.

“We’ve been in Spain the most, but not one specific place very long. The longest was Malaga, which was very cheap, and in Lisbon, which was pretty cheap as well.

“Rural areas and Portugal we’re say cheaper than Barcelona and Madrid,” she said. “But Ibiza has been very expensive. Ibiza is a huge tourist place for Europeans also, which I think accounts for the price jump.”

Despite the nice exchange rate, Kruis still looks for a deal. She said she’s turned to using cash primarily because she gets a better rate from the ATM.

“The exchange rate is becoming more and more favorable to the dollar and definitely people have more incentives to travel and we’re talking about the majority of tourists,” said Marvia Bortolin, a spokesperson for the Italian National Tourist Board.

As a result of the massive fall in energy prices, gas prices plummeted, which has put more disposable income in the pockets of U.S. consumers. Steady, low prices and a forecast that shows a continued boom in the U.S. dollar makes it easier for consumers to purchase foreign products and services and travel abroad.

“Essentially… the benefit of the exchange rate makes this a better value since last year,” said Andrew Brown, who is a sales director at Post Office Travel Money. “Plan a tour of Europe as it’s got to be the best time in a number of years to do so.”

There were 68.3 million outbound tourists from the U.S. traveling overseas in 2014, up from 61.6 million in 2013, according to the U.S. Office of Travel and Tourism Industries. The number has gone up each year since 2011.

“The incidence of travel has continued to increase to record levels within the U.S.,” Sacks said. “That’s why the travel sector of the economy whether you’re looking at lodging, recreation, food and beverage or air transportation, these sectors have been leading growth in the U.S. economy partly because consumers are traveling at a higher rate than they ever have before.”

For United States consumers, the global economic conditions haven’t been this ripe in years, and now would be the time to follow Kruis’ lead and explore a Eurozone vacation.

“Last year, the Eurozone hosted over 15 million American visitors,” Sacks said. “That was 4 ½ percent of all international visits to Eurozone countries.”

The Eurozone has seen a 67 percent increase in U.S. tourists and visitors from 1995 to 2015, according to Tourism Economics.

“At the end of the day, people are interested in different markets because every single market has different dynamics,” Perret said.

Sacks said his firm “absolutely” expects the number of U.S. travelers to go up in 2015.

“We’re already seeing it in some of the early data for the year,” he said. “Growth in the range of 5 percent for U.S. travel to Europe, which is pretty good. It’s above trend; it’s been trending closer to 3 percent.”


According to a recent report from the U.S. Office of Travel and Tourism Industries, American tourists have already begun venturing out in force: just over 840,000 U.S. citizens traveled to Europe in March, up from 500,982 in February.

According to data compiled by online travel company on its bookings and travel searches so far in 2015, U.S. consumers have been finding bargains across the board for European travel.

Airfare prices are down for flights to the Eurozone from virtually all U.S. major cities and hotel rates have decreased from a year ago and are expected to keep falling with the predicted steady decline in the euro over the course of the year.

Airfare prices to Italy, overall, have increased since last year, according to Currently, the average price for a flight to Rome, among rates found in 24 major cities, is $1,631. The cheapest flight on average is to Dublin, Ireland at $1,108 with the cheapest flight listings being reported from New York City, surprisingly, at $871.

Despite a murky future for the euro area headlined by a global economy that’s on crutches, a positive from the surge in the dollar can be tourism and its potential benefits on the Eurozone economy.

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