2024 review and 2025 outlook
Looking back at 2024
The recovery of travel in 2024 when compared with arrivals in 2019 for Europe is at +1%, and almost complete worldwide at just -1%. The much-awaited recovery of inbound tourism saw a surge from 2023 to 2024, with arrivals increasing +11% worldwide and +5% in Europe, despite all the ongoing geopolitical uncertainty.
Europe’s performance was largely driven by short-haul travel demand and the season extension into the fourth quarter of last year. Luxembourg is in the Top 10 European destinations with the strongest arrival growth compared to 2019.
US and India lead long-haul market recovery to Europe, while Chinese arrivals are still at -40% to -50% vs. 2019 (visa issues, reduced air capacity, preference for travel within Asia). Chinese arrivals to Luxembourg are -20% vs. 2019, a better result driven by the new direct air connection with Zhengzhou.
Outlook for 2025: Between Caution and Opportunities
LFT Hotel Survey
- Hotel occupancy rate forecast: 56% (Feb), 62% (Mar), 65% (Apr), a decline of ca. 0.4 points over 2024 (-2 points in Luxembourg City).
- The net decline in demand is more pronounced in the leisure segment, but prospects are better in North & East regions. (+2-+4 pts occupancy)
- There is less optimism than last year (54%, -11 pts), except in North & East. 73% of hotels faced a loss in profit in 2024 due to high costs (equal share to 2023).
Taking the Pulse of the Hotel Sector
Our survey of Luxembourg hoteliers reveals nuanced occupancy forecasts for early 2025: 56% in February, 62% in March and 65% in April – representing a slight decline of 0.4 points compared to 2024, more pronounced in Luxembourg City (-2 points).
While the leisure segment generally shows signs of slowing down, the North and East regions of the country (Luxembourg Ardennes, Mullerthal and Moselle) are bucking the trend with encouraging prospects, anticipating an increase of 2 to 4 points in occupancy.
The general optimism among professionals has somewhat waned (54%, down 11 points), except in these same North and East regions.
A major ongoing concern: nearly three-quarters of establishments (73%) saw their profitability deteriorate in 2024 due to high operating costs, an identical proportion to 2023.
Current Market Signals
Overall analysis demonstrates positive trends:
- Hotel searches for upcoming stays exceed last year's by 6%, driven primarily by business travel, while interest in long spring weekends is slowing.
- Flight bookings are up by 5%, reflecting slightly more pronounced dynamism in the business segment (+6%) than in the leisure segment (+4%).
- Camping confirms its growing popularity with bookings up 5%, supported by Dutch (+7%) and German (+5%) clientele, both for spring and summer.
Travel Intentions and Forecasts (Europe)
- Forecasts for international arrivals in 2025 are positive despite increased uncertainty due to persistent geopolitical tensions and weakened consumer confidence:
- World: +3% to +5% compared to 2024
- Europe: +10% compared to 2024, +13% compared to 2019
- Western Europe: +7% compared to 2024, +12% compared to 2019
- Long-haul travel to Europe: American demand is expected to remain strong, with high-income households (the category most likely to travel to Europe) being the main beneficiaries of Trump's new tax policies stimulating consumer spending. Trump's new policy measures could favour Chinese tourism to Europe at the expense of the United States (by analogy with trends observed between 2017 and 2019). Reasons could include US visa restrictions for Chinese citizens, reduced air capacity and image effects.
Overall, intra-European markets are expected to contribute significantly to growth in 2025: notably the UK, France, the Netherlands, Belgium and particularly Germany. According to the new forecast model developed by LFT, Luxembourg could see its international arrivals increase by 4% in 2025, despite a spring start that looks somewhat muted.
Growth opportunities include bleisure travel, infrastructure improvements, leisure events, domestic tourism and sustainability-related trends.
