How Europe’s Tourism Industry Has Been Affected By War in Ukraine3 min read
Bernabò Bocca, the president of the Italian hotel association Federalberghi, said he was most concerned over energy costs, which have surged in Italy in recent months. “Hotels are energy-intensive companies, they’re open seven days a week, 24 hours a day,” he said. “The cost of energy has become a very important component, a price the entire world is paying.”
Before the pandemic, tourism accounted for about 14 percent of Italy’s G.D.P., according to the country’s tourism ministry, and Italy’s national tourism agency, ENIT, said that in 2019 more than 63 million foreigners traveled to Italy.
At a recent trade show, Italy’s tourism minister, Massimo Garavaglia, cited a February poll of American travel sentiment by the market research firm MMGY Global, which reported that 47 percent of the 4,500 surveyed were waiting to see how the situation in Ukraine evolves before they make plans to visit Europe. “It’s clear that if half of Americans don’t come to Europe, it’s going to be a drama,” he said.
How the Supply Chain Crisis Unfolded
The pandemic sparked the problem. The highly intricate and interconnected global supply chain is in upheaval. Much of the crisis can be traced to the outbreak of Covid-19, which triggered an economic slowdown, mass layoffs and a halt to production. Here’s what happened next:
However, other travel operators both large and small still express optimism for the upcoming season, despite concerns over the war and the coronavirus. Last week, the online travel agency Expedia announced a forecast for a strong summer in Europe, saying search interest among U.S. travelers looking to travel to Britain, Germany and France this summer increased fivefold compared to the same period in 2020.
On Costa Blanca, members of the local hotel industry have signed fixed-price contracts with tour operators, which are likely to result in fewer cancellations. The main challenge for hotels will be managing rising costs and adapting to supply chain problems.
Mr. Cuenca, of Magic Costa Blanca, said he had not yet increased rates and fees at his hotels and expressed cautious optimism about the summer, after already booking about half of his hotel rooms for the season. “We will have to watch inflation and may have to adjust our rates to keep our profit margins,” he said.
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