Macro commentary by eToro analyst for Romania, Bogdan Maioreanu: Summer vacation of 2023 will be more expensive
With Easter and 1st of May small vacations behind us, Europeans are looking forward to the summer vacation of 2023. While some are still asking themselves where to go, 52% of Europeans have already partially or fully booked their Summer vacation, 8% more than a year ago. But this summer vacation will likely be an expensive one due to inflation and also because many Europeans plan to spend more on travel than they did last year.
According to a survey of the European Travel Commission more than half of Europeans have already booked their travel outside their own country for this summer. The early planning is a reaction to the fear of increasing travel costs due to inflation that remains Europeans’ biggest concern (23%), followed by personal finances and economic situation (17%).
Travelling within Europe remains the top choice, with 30% of Europeans planning to visit a neighbouring country and 28% heading to a non-neighbouring one. Only 11% plan a trip outside Europe. Almost 60% of Europeans plan to take multiple trips by September 2023.
The Ukrainian war has changed travel plans and this is not good news for Romanian tourism as 11.5% of travellers changed their itinerary plans to avoid the countries neighbouring the conflict zone. However, the latest statistical data shows that at the beginning of this year international tourist arrivals in Romania increased 61% compared with the same period last year. Most entries are from Europe, followed by Asia and North America.
The ETC survey is also showing that 37% of Eurpeans plan to spend more than 1500 Euro per person for the summer vacation, 7% more than a year ago. Europeans plan to spend more this summer on travel, sport and personal care, leisure activities and shopping. Less money will be spent on fuel. Maybe in the summer of 2023 the roads will be less congested as 7% less Europeans plan to travel by car and instead choose to use buses or trains.
According to the survey more than half of travellers will choose to fly to their destination, about the same as in 2022. For the airlines this is good news following last year’s operational issues. But ratings agency Fitch warns that there still could be operational disruption in the coming months as airlines and airports are still ramping up capacity. This could be exacerbated by potential strikes, which could affect summer air traffic. Regarding the most recent industrial actions by air traffic controllers in France, Fitch estimated that 5%-10% of flights were cancelled on the affected days.
So far, Europe airlines’ bookings for this summer are strong despite increasing ticket prices, supporting a recovery in passenger traffic and profit margins, Fitch Ratings says. This summer 70% of tourists from Spain and the UK plan to travel by plane, 63% of Italians and over 50% of Polish and French. Overall, European demand for air transportation has recovered to 85%-90% of 2019 levels in the last six months. Low cost airlines such as Wizz Air (WIZZ.L) and RyanAir (RYAAY) are already showing sizable increases in Q1 2023 in passenger numbers (59% and 17% respectively) compared to the pre-pandemic levels.
Notes to editors
Bogdan Maioreanu, eToro analyst and markets commentator, has over 20 years of experience in financial services and investments and a strong background in journalism. He held different Corporate Banking management positions in both Raiffeisen Bank and OTP Bank, before moving to business consultancy roles working for IBM Romania among others. Bogdan is an Executive MBA from Asebuss and Washington University.
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