As Europe heads into its second summer with the pandemic, we bring some thoughts on the recovery drivers that will shape the sector. In the long run, economic fundamentals drive recovery. Factors we considered are the appeal of domestic tourism, past dependency on air travel, strength of health services, and share of business and leisure travel.
Substitution of land-based and alternate accommodation means the tourism sector in general can recover faster than aviation or larger hotels. Domestic travel—less hampered by air travel, restrictions, and insurance requirements—recovered faster in most geographies, a trend we expect to continue. Business travel will take longer to recover, and countries with high dependence on this traffic will need to look at other sources of demand generation—or focus on the right corporate-travel personas as companies restart travelling.