Data confirm a global recovery in travel is underway. The recovery extends to Europe which has experienced growth in visitor arrivals through the first half of the year with indications of acceleration into the third quarter. This, despite the setbacks to air travel experienced in April due to the volcanic ash cloud. While the travel recovery in Europe has been generally broad, gains have favoured Western Europe…
Data confirm a global recovery in travel is underway. The recovery extends to Europe which has experienced growth in visitor arrivals through the first half of the year with indications of acceleration into the third quarter. This, despite the setbacks to air travel experienced in April due to the volcanic ash cloud.
While the travel recovery in Europe has been generally broad, gains have favoured Western Europe while Northern Europe continues to lag behind last year.
Some European destinations have benefitted from favourable exchange rate conditions. Russia and Japan have provided heady growth thus far with the US showing signs of recovery in recent months. The anticipated return of UK travellers to European destinations also appears to be budding in recent months.
Industry data echo the results from destinations. Passenger growth on European airlines has been consistently positive since the airspace closures in April. Recovery in hotel prices, which typically lags in recovery, is now underway as occupancy rates continued to make gains through August.
However, the outlook for global economic recovery has become much less certain. In this tenuous environment, risks are both high and skewed towards the downside.
The US economy, in particular, has slowed while the Eurozone showed surprisingly strong in the first half of 2010 in the face of fiscal tightening and sovereign debt worries.
While the corporate sector is flush with cash and represents an upside risk to the forecast, a timid response in hiring and investment lends to the possibility of a subpar recovery.
Uncertainty in the financial sector led by problems with European banks and stalling of asset prices provides additional downside risks. Further crisis in the financial sector raises the risk of a return to recession.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
