Eastern Europe – a key growth market for the global Travel and Tourism industry
Eastern Europe offers the global travel and tourism industry a golden opportunity for growth, according to the latest research from Euromonitor International.
Between 1999 and 2003, Euromonitor found that Eastern Europe was the only region to record consistent annual growth in terms of incoming tourism. This growth rate of approximately 17% was well ahead of more developed regions such as Western Europe and North America.
Serbia and Montenegro drives growth in the region
Serbia and Montenegro spearheaded growth in the region. This former Yugoslav State witnessed dramatic growth, with incoming tourism increasing by some 207% between 1999 and 2003, although this was from a small base of just 152 000 in 1999. Other Eastern European destinations including Croatia, Latvia and the Ukraine also featured highly in Euromonitor’s growth rankings.
Economic stabilisation in Eastern Europe benefits tourism
Euromonitor International’s research suggests that this dynamic growth in Eastern Europe is the result of a convergence of several market factors. Of primary importance has been the stabilisation of economic conditions in Eastern Europe, which has allowed for government investment in infrastructure and the tourism industry itself.
The inclusion of several Eastern European countries in the EU in May 2004 has created new opportunities for trade and investment. EU membership is expected to have a positive impact on growth prospects in the new Member States, which include the Eastern European countries of Poland, Hungary, the Czech Republic, Slovenia, Slovakia, Estonia, Latvia and Lithuania.
These countries will receive the benefit of the EU Structural and Cohesion Funds if they manage to maintain a stable macroeconomic environment and institutional and microeconomic structures that are conducive to growth. The result will be greater economic stability in the region and more money to inject into tourism.
Budget airlines attract tourism to Eastern Europe
Eastern Europe has recently been opened up to low cost airlines, such as Sky Europe, which has facilitated cheaper travel to the region from Western Europe. Therefore, in addition to being an inexpensive destination due to its relatively lower cost of living, Eastern Europe has also proved to be financially attractive to tourists thanks to the lower cost of flights to the region.
For example, Euromonitor International’s research shows that the UK has emerged as the most important source of tourists in the Czech Republic, making up a 7% share of total arrivals in 2003. This translates to an increase of 49,000 more arrivals in 2003 than in 1999. Visitors from the UK were not only attracted to the Czech Republic because their money stretched further, but also to the fall in airfares that has coincided with the arrival of budget airlines.
Consumers can create their own holidays to Eastern Europe
The movement from packaged holidays to tailor-made holidays is also proving to be beneficial to the Eastern European travel industry. Euromonitor’s head of travel and tourism research, Caroline Bremner comments, “At Euromonitor, we have noticed that in recent years there has been a decline in popularity of the traditional packaged holiday concept in favour of consumers booking each element of their holiday separately. Eastern European countries have benefited from this trend with consumers opting for less developed tourist destinations that are still well-served by low-cost airlines.”
A positive future for the Eastern European travel industry
Euromonitor International forecasts that the popularity of Eastern Europe is set to continue, predicting growth of 40.2% in incoming tourists to the region between 2003-2008. Key markets to watch include Slovakia and Bulgaria, with Euromonitor also expecting continued rapid growth in Serbia and Montenegro. All three of these countries are set to see a rapid increase in the numbers of arrivals, thanks to further domestic investment in tourism and the appeal and growing availability of low-cost flights.
Euromonitor International’s report, The World Market for Travel and Tourism offers a comprehensive guide to the size and shape of the travel and tourism market at the global and regional level. It examines the size of the travel accommodation, transportation, car rental and retail travel markets, allowing you to identify the sectors driving growth.
It identifies the leading companies and offers strategic analysis of key factors influencing the market, including background information on disposable income, annual leave and holiday taking habits.