LFT Travel Insights Q4 Travel remains a priority

2024 is drawing to a close and what was forecast a year ago has become fact: Europe has achieved full recovery of inbound tourism compared to pre-pandemic levels. While worries related to conflicts, travel disruptions and overcrowding may impact travel decisions in 2025 more than previously, travel remains a priority for most people in Europe.

In the third quarter of 2024, Luxembourg’s perceptions improved in the areas of value for money and sustainability, for the latter the Grand Duchy ranks 5^th in Europe. There is a strong demand for leisure stays over the Christmas and New Year period in Luxembourg City. Current hotel searches in Luxembourg for future stays are 14% higher than in 2023, and flight bookings are 10% above 2023. Culture and heritage, nature and outdoors and wellness are the holiday types currently yielding higher interest than last year among those considering Luxembourg.

Overview: Europe

Europe has achieved full recovery of inbound tourism compared to pre-pandemic levels. The upward trend in Europe this year is supported by major events and improved air connectivity. Travel remains a priority for most tourists: 67% of Germans even saved money on other spend categories during the past 12 months in order to be able to travel (up from 60% a year ago).

The sheer growth led to protests from locals deploring the uneven distribution of benefits that tourism brings. Nevertheless, 84% of Germans felt welcome during their holidays in 2024, but 35% also felt there were too many tourists in the destination they visited (44% among travellers to Mediterranean destinations).

Zoom: Luxembourg

The hotel occupancy rate in Luxembourg was 74% (+4%), ADR 153€ (+2%), RevPAR 113€ (+6%). Hotel performance in Europe was equally strong (RevPAR +6%) but more price- than occupancy-driven.

The perceptions of value for money and, in particular, the sustainability of Luxembourg’s offer have improved, with Luxembourg ranking 5^th in Europe in the latter category in Q3/24 (based on comments posted on online review sites).

LFT Hotel Survey

• Hotel occupancy rates are forecast to increase by 2-3 points over 2023 for the period November-January. There is a strong demand for leisure stays over the Christmas and New Year period in Luxembourg City, but a decline in business events (MICE) demand share for next months. Hotel searches for future stays are 14% higher than in 2023; flight bookings are 10% above 2023.
• High operating costs remain a challenge as 84% of hotels are seeing margins receding despite high turnover (+9% Jan-Oct), impacting investment plans (61% of hotels).

Short-term travel intent surveys

• 73% of Europeans plan to take at least one trip until March (+5 pts vs. 2023). The share of Europeans planning to take multiple trips increases from 48% to 52%.
• Worries related to conflicts, travel disruptions and overcrowding may impact travel decisions in 2025 more than previously. More travellers have seen their travel habits impacted by climate change, e.g. preferring destinations with a milder climate and avoiding those with extreme weather.
• Weather was equally important 30 years ago as it is now among decision criteria – yet, a small but growing segment has become more tolerant towards rainier and cooler weather during summer holidays, compared with the 90’s, according to findings from the German “Deutsche Reiseanalyse”.
• Culture & heritage, nature & outdoor and wellness are holiday types that yield higher interest among Luxembourg considerers compared to last year.

• Travel to Europe: In 2024, growth in international travel to Europe is expected to be 9% higher than in 2023 and in 2025 a further 10% higher than in 2024.
• Long-haul travel recovery: Travel from the Americas to Europe and intra-European travel will have fully recovered to pre-pandemic levels in 2024. Recovery of demand from long-haul markets other than the Americas to Europe will be more gradual, but should be achieved by 2025 – although high travel costs remain a concern.
• Opportunities for growth are numerous and could include: bleisure travel, leisure events, tourism infrastructure development, air connectivity, return of more long-haul visitors, travellers choosing more remote and less visited destinations.
• Longer-term forecasts to 2030 suggest 2 billion international arrivals worldwide, as Europe loses market share to Asia-Pacific and the Middle East. Still, international leisure nights to Europe are expected to grow at an average annual rate close to 5% and international leisure spend at an average annual rate of 8% by the end of the decade.
  
  
   

Data sources: LFT, Statec, MKG Hospitality, Sojern, Forward Keys, MMGY Travelsat, European Travel Commission, Tourism Economics, Deutsche Reiseanalyse/FUR.