With continued woes in the Middle East, this summer hotel guests are traveling to traditional markets such as Portugal, Spain and Greece.
A series of recent geopolitical trends and incidents could push more travelers to some European destinations, setting up clear sets of winners and losers this summer.
Spain and Portugal are the most likely to benefit from guests deciding against booking trips to the Middle East and Turkish destinations for their summer travel.
“One of the main factors for the increased visitor numbers to Portugal and Spain is the displacement within the region,” said Maribel Rodriguez, country manager for Spain, Portugal and Latin America for London-based World Travel & Tourism Council. “Where travelers had become used to visiting Egypt, Turkey and Tunisia, they are now going back to places such as Portugal and Spain, as they are perceived as some of the safer sun-and-beach options in the Mediterranean.”
Rodriguez said boosted summer seasons should revitalize the tourism industries in both countries.
“Increased travel demand will stimulate the growth in Spain and Portugal,” Rodriguez said. “According to our data, Spain’s travel and tourism gross domestic product will grow by 3.5% to €180.8 billion ($203.5 billion) in 2016, while Portugal’s sector is estimated to grow by 2.8% to €30.3 billion ($34.1 billion) this year.”
Rodriguez said the timing of this potential boost is perfect for the growth of travel and tourism as the two countries have recently emerged from several years of recession.
“According to (our) research, travel and tourism is a key to recovery for countries hit hardest by recession and the Eurozone crisis, including Greece, Spain, and Portugal,” she said. “The report calls for smart and well-targeted investment to overcome strong competition among major world regions for foreign direct investment.”
Ben Martin, senior director at AECOM Economics, said the dampening of the Russian outbound market also has affected resorts in the Middle East and North Africa, although Russian markets such as Sochi have benefited as Russian travelers stay at home. This has been an unexpected outcome for Sochi, Martin said, where analysts expected to see a dropoff after the city hosted the 2014 Winter Olympics.
“The Russian market has been advised to stay away from Turkey. They are not so confident flying to the Red Sea area, and they are struggling with a downturn in their economy,” Martin said. “Russians were a huge source of demand, and the current thinking is their economy will take two or three years to resolve.”
Seeing demand changes within the meetings, incentives, conventions and expositions market is a good indicator of where the overall hotel guest and tourism market is heading.
“We’ve certainly seen at present that Spain is doing extremely well, and equally, I have seen real problems in such destinations as Turkey and Morocco,” said James Dowson, managing director of U.K.-based destination management company The DMC Advantage.
Dowson said tourism and hotel performance in some Muslim countries has been negatively affected by those regions being deemed problem areas.
“Jordan, once a darling, is now off the radar,” Dowson said.
Dowson said other markets like Malta, Southern France, and even Cyprus and Greece are performing better.
“Even though costs are higher, safety is seen as better,” Dowson said.
He said he also sees destination management companies in places such as Greece, Portugal and Spain rehiring employees but at a slower pace than before the recession.
Martin said the Iberian Peninsula will do well, especially since it has great flight connections, and proposals have come in for Portugal’s Algarve region.
“Spain has the opportunity to absorb increased capacity, and the region also is benefiting from niche markets, such as cycling, which I hear is the ‘new golf,’” Martin said.