Lack of high spending US travellers will prolong the economic recovery of dependent EU destinations

Globaldata Travel and Tourism 7th July 2020 (Last Updated July 7th, 2020 17:02)

Lack of high spending US travellers will prolong the economic recovery of dependent EU destinations

According to GlobalData, US tourist expenditure in Europe is set to decrease by 45.5% in 2020. In 2019, US tourists spent a total of $116.1bn across Europe. In 2020, this figure is expected to drop to $63.2bn. To make matters even worse for EU destinations that are major beneficiaries from US tourism, infection rates in states across the US have recently surged. When the European Union opened to visitors on 1 July after months of coronavirus lockdowns within the region, the US did not make the list of 14 countries allowed tourist entry. This decision now looks to have been the correct one and because of its timeliness, it will be likely that the EU stand by its decision on inbound US travel for the foreseeable future.

Italy will bear the brunt of a fall in US tourism

According to GlobalData, the US was Italy’s second most important source market in terms of visitation in 2019, with 3.5 million visits. In 2020, US visitation is expected to decrease by 47.3%, amounting to 1.8 million. In 2023, GlobalData predicts that US visitation levels to Italy will have still not recovered to 2019 levels, reaching 3.3 million visits. What will be especially frustrating for Italy’s tourism sector and wider economy is that US travellers spend significantly more per day compared to other valuable source markets. In 2019, the average international daily spend of a US tourist was $194, which put the US source market in the global top 20 in terms of average daily international expenditure.

The tourism reliant south will be likely to suffer most

This frequent and high spending source market is even more important for the less economically developed and more tourism reliant South of Italy. Many US tourists travel to the major islands of Sardinia and Sicily, where the local gastronomy acts as a significant pull factor. According to a recent GlobalData consumer survey, over one fifth of US travellers now state that food and drink factors in to their decision making process when choosing a destination. These islands are so reliant on tourism that Sicily’s regional government is offering to subsidise holidays on the island for both domestic and international visitors in an effort to kick start tourism and their local economies in the aftermath of the pandemic. The lack of US tourism will no doubt extend the economic recovery of these islands. However, the ban on US travel is completely warranted. Covid-19 wreaked havoc in Italy and a second spike caused by international visitation will only peg the nation further back in its recovery process.