A good year for tourism in Southern Europe

More expensive plane tickets, more expensive hotels… This does not prevent tourists from going to Southern Europe. Beach holidays are particularly popular. According to our experts, the forecasts are good. Southern Europe is relatively cheap and there is still a lot of potential to make tourism in Southern Europe even more popular as a holiday destination.

Extreme heat or not, tourism in southern Europe is doing well. Never has Portugal welcomed so many tourists as in the first quarter of 2023. Greece is also doing well. The Greek Minister of Tourism has already reported a record number of bookings for this summer in April. The coastal regions are the main attraction: for 30.3% of holidaymakers, beach holidays top the list. And according to our experts, 41% of European travellers expect to spend more than €1,500 on their holidays this summer. Last year, it was still 33%.

Even though vacations are more expensive, we find that a week's beach vacation in Southern Europe is still much cheaper than in the Caribbean, Australia and the United States. And as expensive as many premium destinations in emerging countries like Belize, Maldives, Mauritius, Seychelles and Sri Lanka. Bermuda is the most expensive beach destination in the world, three times more expensive than southern Europe.

The covid-19 crisis has almost completely shut down the travel industry. Southern Europe has fully recovered from this blow. 2019 levels are exceeded in Southern Europe this year. From a financial perspective, this is good news for those countries whose economies are struggling due to high inflation and high interest rates.

Tourism represents a large part of the GDP in the countries of Southern Europe. In Croatia 11.3%, closely followed by Portugal with 8.1%, Greece 7.7%, Spain 6.9% and Italy 6.2%. This also makes southern European countries very vulnerable. Dependence on tourism is great and the covid-19 crisis has shown that external factors can completely undermine tourism. The question is, for example, what will be the effects of climate change such as extremely high temperatures, as we increasingly see in the southernmost part of Europe.

But for 2023, the picture looks good for tourism in southern Europe. Thanks to the favorable development of tourism, the Portuguese central bank raised its economic growth forecast for 2023 from 1.5% to 1.8%. The Bank of Greece predicts that the Greek economy will grow by 2.2% in 2023. This is largely due to booming tourism. This means that Greek growth is well above the eurozone average.

Because southern European countries are too dependent on tourism, they risk falling even further behind other European countries which focus more on high-skilled, high-value-added production and high-quality services.

The worst thing European tourism can do is rest on its laurels. There are too many risks for that, like emerging countries that can tempt tourists with a competitive offer. Additional investments are also needed. It will be necessary to adapt to traveler preferences, for example in terms of accommodation options and improve infrastructure (accessibility, transport networks).

The diversification of the offer is also important to address other target groups and attract people outside school holiday periods.