Despite higher costs, Europe travel returning to pre-Covid levels

11 April 2024 Consultancy.eu 3 min. read

European travel and tourism is very close to returning to pre-pandemic levels – and despite air travel and accommodation costing more than before, travelers are generally willing to spend more. That is according to research from OC&C Strategy Consultants.

The Covid-19 pandemic was a huge blow to the global economy – and while people were stuck in place during lockdowns and air travel grounded to a halt, the travel and tourism industry took one of the heaviest blows.

Now, four years down the road, things are finally looking up again for the travel industry, following a gradual recovery. Within the next few years, the travel industry in most European markets will rise well above pre-pandemic levels, according to a projection to 2025.

Despite higher costs, Europe travel returning to pre-Covid levels

In fact, research from OC&C Strategy Consultants shows that travelers are especially eager to travel now that the pandemic feels increasingly like just a distant memory. Travelers are generally willing to pay more on travel, including on pricey tour packages, though low-cost options remain popular mostly with young people.

Travel overall in Europe has become significantly more expensive since the rebound from the lows of the pandemic lockdowns. Airfare in the Eurozone is now 38% more expensive than in 2019, though last summer the high point reached 45%.

Prices for hotels have also mostly followed suit. European accommodations were found to be 26% higher now than in 2019, though on a global scale, Northern Africa and South America lead the way in pricey rooms.

Despite higher costs, Europe travel returning to pre-Covid levels

The reasons for these increases in price are complex, but it has to do with inflation, higher demand, and operational challenges like staff shortages. Another interesting factor is the higher cost of ‘green fuels’ and other ESG measures taken by airlines, which can often be passed on to the consumer.

Overall, the majority of European travelers surveyed (58%) said that sustainability issues influenced their travel and vacation decisions. And while there is more consciousness around climate issues, the reality is that most travelers will not act on it.

Only 9% of respondents said they would pay more for travel experiences that are in line with ESG values. Though that may seem hypocritical on the part of travelers, the reality is that consumers are increasingly weary of greenwashing, so this might just indicate they do not want to pay for nothing. A 2020 report from the European Commission found that a significant 40% of environmental claims were unsubstantiated.

Despite higher costs, Europe travel returning to pre-Covid levels

Italy was the European country with the highest amount of travelers that reported being especially concerned about environmental issues when planning vacations. Those percentages were lower in countries like the United Kingdom and the Netherlands.

So, the fact is that the travel and tourism industry is on a positive path despite challenges that lead to higher costs. Despite that, the industry should seek a solution to prices that can be balanced with more ESG initiatives, which are increasingly seen as an imperative for businesses.