'Nasty European recession' risks thwarting global travel sector's post-Covid recovery

Blackouts and gas rationing in Europe cannot be ruled out this winter, says travel researcher

Global travel risks suffering a major setback if Europe sinks into a recession, a travel expert has said. PA

The global travel industry’s recovery from the Covid-19 pandemic risks being upended by a “nasty European recession” looming on the horizon, a tourism expert has said.

Speaking at the World Travel Market in London, Dave Goodger said no region is immune to economic downturn in specific areas of the world.

Britain’s central bank last week said the economy faces it longest recession in 100 years. It predicted the economic downturn that began in the summer could drag on until mid-2024.

The UK’s neighbours are also facing increasing uncertainty amid an energy crisis, rising fuel prices and the war in Ukraine.

Mr Goodger said gas rationing and blackouts across the continent could not be ruled out this winter.

He said such outcomes would have knock-on effects on airlines and tour operators, despite the fact that some countries have “managed to build up a gas storage”.

“It would be primarily felt in Europe,” he told The National.

“Germany and Italy are probably the two biggest gas-importing markets.”

The war in Ukraine has fuelled an energy crisis in Europe, the effects of which are felt farther afield. AP

“They’ve got policies in place to try and reduce their gas usage by 15 per cent,” he said.

“So with that in place, looking at curves for the normal winter, that should be okay. But if it’s a particularly cold winter, then there could be a situation with all of these reserves really running out. There would need to be rationing. Then you're getting into things such as blackouts, not able to heat homes. That will have a much larger impact.”

He predicted a “nasty European recession” that would force advanced economies across the globe to sink into recession over the next 12 months.

He said the problems facing countries in Europe have been exacerbated by supply chain issues, which were present before Russia invaded Ukraine in February.

The global travel industry’s bid to shake off the pandemic is also being challenged by China’s ongoing restrictive policies, designed to protect the country from the coronavirus.

While Travel Economics had initially expected authorities in Beijing to reopen borders this year, Mr Goodger said it is now more likely to happen in 2023.

The ongoing closure of China is being keenly felt by the Asia Pacific travel market compared to other regions, he said.

The Middle East is leading the pack in the recovery stakes, he noted, partly due to hosting major events that attract international audiences.

The director of Tourism Economics noted how the World Expo in Dubai and the upcoming World Cup in Qatar have offered a major boost to Gulf tourism, the effects of which would be felt for years to come.

“These are big draw factors putting these destinations at the window,” he said.

He said it is typical for regions to reap the “benefits of mega events happening in the years afterwards”.

Despite uncertainty and multiple challenges facing the industry, he struck a positive note on the overall post-pandemic recovery.

“It’s one of the things that's been really striking this year,” he explained. “People want to get out and travel. We're social animals. People want to meet they want to get new experiences. That hasn't changed.

“When people can afford to and are able to, they will travel.”

Tourism Economics, a leading travel research firm, is headquartered in Oxford, UK, and has offices in Dubai, Philadelphia, Buenos Aires among other locations.