Industry recovery will be delayed but not derailed by a looming recession and higher inflation across Europe weighing on consumer spending and tourism demand, according to the latest forecast.
Cost-conscious and value-driven travel will lead the travel bounce-back in the remaining months of 2022, the European Travel Commission (ETC) predicts.
But the prolonged war in Ukraine and additional travel restrictions for Russian tourists across Europe will push back the recovery in eastern Europe.
Overall, the price of holidays will be a key deciding factor for households as they grapple with having less disposable income.
Cheaper short-haul travel currently makes up around 72% of total visits in Europe and is set to grow in popularity for the remainder of the year.
This comes against a backdrop of consumer confidence in France hitting a nine-year low in September and similar trends witnessed in other major source markets, such as the UK and Germany, according to the ETC.
However, the data suggests a positive outlook, with Europe expected to recover close to 75% of 2019 inbound travel volumes this year.
European airlines saw August flight volumes down just 11% relative to pre-pandemic 2019 despite worsening inflation and staff shortages threatening industry-wide recovery.
ETC predicts that American holidaymakers capitalise on the strong US dollar to bolster “depressed” inbound long-haul trips.
ETC president Luis Araujo said: “European tourism is proving exceptionally resilient to inflation. While the cost-of-living crisis is causing many to change their approach to travel, it is not dampening their desire to explore Europe completely.
“Short-haul travel will be a lifeline for the sector over the next months, as more travellers opt for shorter and closer trips.
“As we continue to navigate the challenges brought about by global uncertainty, it is crucial to rebuild a sector that keeps sustainability front of mind.”