Europe is the world’s most visited region, accounting for 51 percent of global international arrivals. Many of these visitors (particularly from China and the USA) are “big spender” and willing to spare on food, accommodation and luxuries. Accordingly, large luxury brands have already returned to pre-pandemic levels in terms of sales or even exceeded them, driven by increased online sales.
This does not apply to the tourism industry, which is still suffering from the effects of the corona pandemic. The newly founded European Alliance of Cultural and Creative Industries (ECCIA), which consists of the six associations Altagamma in Italy, Meisterkreis in Germany, Comité Colbert in France, Walpole in UK, Circulo Fortuny in Spain and the Gustaf III Committee in Spain, finds a missed opportunity Sweden exists. Together they represent more than 600 brands and cultural institutions.
The ECCIA therefore commissioned a study, which was prepared by Bain & Company, to plead with the EU Commission and national governments for a Europe-wide tourism strategy. The results of the study were presented a few days ago. The main finding is that Europe’s economy could potentially face €520 billion if they didn’t encourage this peak tourism in Europe, which currently amounts to €130-170 billion and could triple by 2030 or 2035 with the right policies.
“Europe is the world’s most popular travel destination and tourism is a strategic sector of the European economy, but there is a wealth of untapped potential in the high-end category: although it only accounts for around 2 percent of hospitality structures, it has value from 130 to 170 billion euros and generates 22 percent of total tourism spending, thanks to a strong multiplier effect,” explains Matteo Lunelli, President of Altagamma and the newly formed ECCIA, in a press release.
High-end tourism also accounts for 22 percent of total spending on accommodation and 33 percent on culture, entertainment and shopping. The high-end segment also has a multiplier effect on employment, as it employs almost twice as many people as regular tourism for the same size of accommodation. There are also “soft spillovers” such as an appreciation of the general tourist offer, investments in various similar areas and the creation of jobs in other sectors as well.
Top tourism by country
Viewed by country, the five main travel destinations France, Germany, Italy, Spain and the UK generate around 75 percent of the total value of top tourism. In the UK, this accounts for around €30-35 billion (out of €80-100 billion in total), respectively €22-27 billion in France, €25 billion in Italy, €20-25 billion in Spain and around €5-10 billion in Germany (from 85 to 100, 80 to 100, 75 to 95 and 65 to 85 billion euros in total).
Countries like Switzerland, Greece and Portugal also have well-developed top tourism sectors, generating €5-10 billion, €10 billion and €4-6 billion, respectively. The rest of Europe accounts for about 9 billion euros.
According to Allianz, this potential must not trickle away unused, for example due to hurdles such as lengthy visa procedures, inadequate infrastructure or insufficiently trained staff in the hospitality and retail trades.
“High-end tourists spend eight times more than average visitors and have a significant impact on local areas. A plan for the development of top tourism in Europe could lead to an increase in value added in this sector to 520 billion euros. The ECCIA study provides a first snapshot of the situation and points out a number of possible levers, including creating sustainable, nature-based tourism, improving infrastructure for the mobility of top travelers, simplifying the visa process and providing training measures for the upscale hospitality industry ‘ adds Lunelli.
In addition, the competition does not sleep and is arming itself – the study names free trade zones such as Dubai, Singapore and Hainan, the promotion of cultural heritage in Japan, innovative hotel and service concepts in Bali, nature experiences in Australia focused on high-end tourism, and activities and attractions across the US that cater to different budgets.
“This report clearly shows that excellence in tourism is a win for all of Europe. In some countries, such as Italy, UK, France and Spain, this segment is large in absolute terms, reaching up to 20-35 billion euros. In other countries, its impact on GDP is considerable, such as in Greece, where it accounts for 7 percent of GDP. In addition, travelers – increasingly curious and concerned about sustainability – are showing interest in new destinations, both in the most well-known and emerging countries such as Croatia, Slovenia, Portugal and the Nordic countries,” commented Claudia D’Arpizio, Global Head of Fashion & Luxury, and Fabio Colacchio, Partner of Bain & Company.
“Excellence tourism is a global asset that must be protected and developed for the benefit of all. After the shock of Covid-19 – a quantifiable loss of over €70 billion from the loss of international travelers alone – the high-end tourism industry is finally showing clear signs of recovery,” summarize D’Arpizio and Calacchio.