EUROPEAN TOURISM:TRENDS & PROSPECTSQuarterly report (Q2/2022) A report produced forthe European Travel Commission Copyright © 2022European Travel Commission EUROPEAN TOURISM: TRENDS & PROSPECTS (Q2/2022) All rights reserved. The contents of this report may be quoted, provided the source is given accurately andclearly. Distribution or reproduction in full is permitted for own or internal use only. While we encourage dis-tribution via publicly accessible websites, this should be done via a link toETC's corporate website,referring The designations employed and the presentation of material in this publication do not imply the expression of Data sources: This report includes data from theTourMIS database,STR,IATA,Eurocontrol,UNWTO, andTransparent. Economic analysis and forecasts are provided byTourism Economicsand are for interpretationby users according to their needs. Published by the EuropeanTravel CommissionRue du Marché aux Herbes, 61, Website:www.etc-corporate.orgEmail:info@visiteurope.comISSN No: 2034-9297 This report was compiled and edited by:Tourism Economics (an Oxford EconomicsCompany) on behalf of the ETC Market Intelligence Group. Cover:Scenic sight in Spello, flowery and picturesque village in Umbria, province of Perugia, ItalyImage ID:1188658447Copyright:Essevu FOREWORD As we officially jump into the summer season, European tourism is expected to continue recoveringin 2022. Covid-19 restrictions have been rolled back and people are eager to make up for two yearsof lost travel. However, the outlook is somewhat gloomy for a number of reasons. Strong pent-updemand and accumulated household savings during the pandemic are having to face high inflationand sky-high energy and food pricestriggered by Russia’s war in Ukraine, which is eroding consumers’living standards. Furthermore, a faster-than-expected travel demand across Europe has caught theaviation industry off guard causing airport chaos due to staff shortages and strikes. These factors As we expect a buoyant summer season despite turbulent times, this comes along with some addi-tional concerns, such as potential overcrowding and carrying capacity issues thatput pressure onnatural environments and local communities. In this regard, destinations should reinvent their busi-ness models to meet the needs of a more sustainable tourism ecosystem based on a low-impact prin-ciple. Achieving this sustainable growth requires balancing the sector’s social, economic and environ- The latest edition of theEuropean Tourism Trends & Prospectsquarterly report provides an overviewof current travel trends and the outlook for European travel recovery in 2022. It alsoaddresses someof the most pressing issues within the tourism industry, including high inflation, rising travel costs,and staff shortages and the likely impacts from these headwinds, and why it is believed that these Jennifer IduhETC Executive Unit TABLE OF CONTENTS FOREWORD............................................................................................................................................4TABLE OF CONTENTS...........................................................................................................................5EXECUTIVE SUMMARY.........................................................................................................................61. TOURISM PERFORMANCE SUMMARY 2022...................................................................................92. GLOBAL TOURISM FORECAST SUMMARY...................................................................................133. RECENT INDUSTRY PERFORMANCE............................................................................................14AIR TRANSPORT...................................................................................................................................14ACCOMMODATION..............................................................................................................................17 EXECUTIVE SUMMARY STRONG PENT-UP DEMAND MEETS HIGH INFLATION AHEAD OF BUOYANT SUMMERSEASON Destinations across Europe continue to relax travel restrictions as concerns over Covid-19 witheraway, enabling the release of strong (short-and mid-haul) pent-up demand. However, skyrocketingenergy prices are pushing travel costs yet higher, prompting people to travel closer to home or con-sider cost-saving options. It remains to be seen how households (especially lower-income earners) Worsening inflation, prolonged war disruption, the resurgence of the pandemic and economic tur-moil continues to endanger the tourism outlook.Latest availabledata indicates that European tourist arrivals are43% below pre-pandemic levels1between January and March this year, whereas pro-spects for the overall year 2022 suggest that the region wouldhaverecovered70% of pre-pandemictravel demand2. Despite headwinds, willingness to travel this summer will prevail. The most recent data shows thatac