LFT Travel Insights
International travel in Europe has increased significantly (arrivals: +12% vs. 2023 and +6% vs. 2019) in Q1-Q2/2024, led by Southern Europe and strong business travel recovery. European hotels are outperforming most other regions (Jan-May: RevPAR +5% vs. 2023). High costs but also large-scale events drive room rate growth in real terms.
In Luxembourg, 58% of hotels and 64% of campsites are satisfied with the summer season so far. The outlook is also positive for hotels over the next few months with business travel demand growth expected to surpass leisure. While bad weather affected bookings on campsites to some extent for May-July, the forecast is up for August and September. The sustainability perception of Luxembourg’s offer is still strong and has improved even further, continuing to outperform the European benchmark.
More key takeaways from the latest LFT Quarterly Report:
Hotel & Campsite outlook
- Hotel occupancy rate forecast:73% (July), 67% (Aug), 75% (Sep), an increase of 1-2 points over 2023. Business travel demand growth is expected to outperform leisure during next months. Hotel searches are 4% higher than in 2023, flight bookings are 16%, campsite bookings 15% higher than in 2023, for future stays in Luxembourg until December. Strongest year-on-year demand growth for future stays from US, FR, ES, UK, NL.
- Campsite occupancy rate forecast: 75% (July), 79% (Aug), 49% (Sep), down for July (weather impacting last-minute bookings), but up for August to September.
Key challenges: High operating costs remain the main challenge for both hotels and campsites, also weakening their potential for investment and potentially causing a loss of gain in 2024 despite rising turnover. Labour shortages remain an issue but seem to be easing slightly. Climate change is identified as a major challenge by campsites.
Outlook: short-term travel intent and travel forecasts (Europe)
- Travel intent: Travel remains a priority for Europeans with 76% planning to take at least one trip in summer/autumn 2024 (+7 pts vs. 2023). Holiday types in higher demand than last year include sun & beach, culture & events, wellness and – marginally – nature & outdoors.
- Key concerns: Inflation and personal finances, followed by geopolitical turmoil, remain top concerns for travellers, but worries of overcrowding and extreme weather events have gained ground vs. 2023.
- Growth: Total travel spend in Europe could be further boosted by large-scale events but also by the return of high-spending Asia-Pacific visitors, driving luxury (shopping) travel, a growth segment for European (city) tourism.
- Forecast: Forecast for inbound arrivals to Europe vs. 2019: +2% (2024), +11% (2025). The quest for authentic and more off-the-beaten-track travel experiences and destinations, business and “bleisure” travel, strong outbound demand from the US and Europe (benefitting short-haul travel within Europe) and the recovery of Asia-Pacific outbound demand are growth opportunities for European tourism in 2024/25.
Data sources : LFT surveys, Statec, MKG Hospitality, Sojern, Forward Keys, MMGY Travelsat, European Travel Commission, Tourism Economics.
