12° Nicosia,
23 July, 2024

Southern Europe shines as affordable summer haven

Tourists flock to the region despite rising costs; Investment key to sustain attractiveness

Kathimerini Greece Newsroom

By Eleftheria Kourtali

In an analysis by Allianz Research, holidays in southern European countries retain their cost advantage over other "competitive" summer destinations worldwide, despite rising expenses. Tourists continue to favor the region; however, countries heavily reliant on foreign tourism, such as Greece, Italy, Spain, and Portugal, must invest more to sustain their allure.

Southern countries remain the top choice for European tourists this year, with 41% of travelers planning to spend more than €1,500 (up from 33% last year). Escalating demand has led to increased prices for food and accommodation, with hotels adjusting rates to cope with higher energy bills and labor costs. The global median price for a hotel room surged to $212 in Q1 2023, compared to $156 in 2022 and $129 in 2021.

Despite the price hikes, travelers remain undeterred, as evidenced by the rising average hotel occupancy rate (from 48% in 2021 to 62% presently). Travel within Europe is also expected to grow by 20% this year, reaching approximately 515 million arrivals, equivalent to 89% of 2019 levels.

On average, a one-week holiday in Greece, Italy, Portugal, or Spain is still considerably cheaper than in the Caribbean (by about a third on average) and comparable to trips to Australia and the US.

As Allianz highlights, Europe's market share has gradually increased due to health restrictions in Asia and the impact of the stronger dollar on global tourist flows. Nevertheless, the South's dependence on foreign tourists makes investment in tourism critical. Strategic efforts in key areas are necessary to reinforce their standing as top destinations. Focus on sustainable tourism practices can preserve the natural environment and cultural heritage. Improving infrastructure, including transport networks and accommodation, can enhance accessibility and cater to diverse traveler preferences. Additionally, promoting off-season tourism and diversifying offerings beyond traditional summer holidays can attract visitors throughout the year.

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