The return of the European vacation

The hotel industry in Europe is showing strong growth, though it continues to lag behind pre-recession numbers.

A new report from American Express Business Insights, the data analytics and consulting branch of American Express, found that hotel spending increased 7 percent last year, plus an additional 4 percent in the first quarter of 2011.

The rise in spending can be attributed to non-European tourists returning to the continent, growth in spending on high-end hotels, and a pickup in business travel. Specifically, Generation Y (loosely defined as those currently in their 20s) tourists have shown a preference for luxury spending.

"This strong growth is great news in an environment where consumer confidence remains low and economic growth fragile," said Sujata Bhatia, Vice President for American Express Business Insights Europe and Asia. "This is particularly true in the UK, where international visitors are spending again, making a significant contribution to the UK's economic recovery."

Tourism rebounds

Non-European visitors are a significant part of Europe's recovery, representing one-third of all leisure travelers, and it seems more and more of them might be stashing dollars in savings accounts earmarked for a European vacation.

According to the analysis, they spend on average 88 percent more per trip than European travelers, driving a double-digit increase in 2010 spending across every market when compared to 2009 spending.

In the first quarter of 2011, there was a 12 percent overall growth in spending by non-European travelers, while there was no growth in spending by European travelers during that same period. In 2010, the overall growth in spending by European travelers was just 1 percent.

Top destinations

Where are they going? The following are the rates of growth for travel by non-European natives to popular Europe destinations:

  • Italy 15 percent
  • Spain 14 percent
  • France 13 percent
  • UK 12 percent
  • Germany 12 percent

For the holidays, both Europeans and non-Europeans preferred a trip to France in 2010, followed by the UK.

The finer things

Luxury or 5-star hotels have seen a major growth in revenue, increasing 9 percent on average across all markets last year. Upscale (4-star) hotels increased just 3 percent, and midscale (3-star or less) rose by 2 percent. One reason for the growth is that many high-profile, 5-star European hotels opened during the last year.

The analysis also found that Generation Y travelers have a taste for the finer things in life, spending 20 percent more on hotels now than they did before the recession. More than half booked a luxury or midscale hotel.

Business travel is back

More good news for the European travel sector: In 2010, spending on business travel increased 10 percent across Europe, with an additional 4 percent growth in the first quarter of 2011. The growth is mostly attributed to an increase in the number of travelers, rather than an increase in average spending per trip.

Business travelers currently account for fully one-third of all travelers to Europe.

The original article can be found at return of the European vacation

var gDomain='', gDcsId='dcsx45fhw10000s189vkq2m4k_3q5m', gFpc='WT_FPC', gConvert=true, gTag=''+'IPT>'; if((typeof(gConvert)!='undefined') && gConvert && (document.cookie.indexOf(gFpc+'=') == -1) && (document.cookie.indexOf('WTLOPTOUT=')==-1)) {document.write(gTag);} function dcsAdditionalParameters(){WT.qs_osrc="fxb";}