Europe’s tourism shows resilience amid higher costs and shifting travel trends

Europe’s tourism sector posted another strong summer as travelers embraced cross-border experiences despite higher costs and extreme heatwaves.

According to the latest quarterly report from the European Travel Commission, year-to-date international arrivals to Europe increased 3% year-on-year, while overnight stays rose 2.7%.

Although vacation-related costs remain elevated, inflation for tourism services is cooling. Consumers are allocating a growing share of their household budgets to travel, and this year, tourism spending is projected to represent 3.1% of total European consumer outlay. This is above both 2024 levels and the 2010-2019 average. Total visitor spending is forecast to grow 9.9% in 2025, a testament to Europe’s lasting pull and resilient demand.

Solid performances across regional hotspots

Across 34 reporting countries, 30 logged growth in arrivals and/or overnight stays compared with last summer. Southern Mediterranean hubs again anchored the season, led by Malta (+12%), Cyprus (+10%), Spain (+4%), and Portugal (+2%), where beach travel dominated. Northern Europe continued to draw visitors seeking nature and cooler conditions, with Norway and Finland each rising +14%, Iceland +3%, Latvia +7%, and Estonia +4%. Poland (+13%) and Hungary (+9%) stood out thanks to favorable price positioning. Following last year’s football tournament, Germany dipped 2%, while tourism costs in Turkey nudged arrivals down 1%. These results illustrate Europe’s tourism diversity and regional strength pockets.

Changing habits and accelerating tech adoption

Capacity bottlenecks and weather extremes shaped the traveler conversation this summer, trending heavily online. Around 28% of travelers from eight major source markets say they plan to shift trip timing over the next two years—mainly to skip crowds, save money, and avoid heat peaks.

At the same time, digital planning tools are becoming mainstream. Adoption of AI for trip planning nearly doubled—from 10% in 2024 to 18% in 2025,  led by Gen-Z and Millennials. Use is highest in China (40%), then the U.S. (27%), reflecting notable digital habit differences across markets. AI integrated into online travel agency platforms is expected to deepen its influence and help destinations promote shoulder-season bookings.

Value-driven demand and long-haul momentum

Value for money remains Europe’s top demand driver. Even as service inflation slows, prices are still well above 2019 levels, fueling competition and pushing travelers toward compelling, affordable alternatives. Central and Eastern Europe has benefited most as visitors balance quality with cost.

Long-haul recovery, especially from Asia-Pacific, continues gaining traction. Arrivals from Japan are up 24% and China 21%, supported by strengthening currency and improving air links, though most destinations still trail 2019 volumes for both markets. U.S. arrivals, by contrast, are up 5% year-on-year and sit 35% above pre-pandemic levels. Global forecasting firm Oxford Economics identifies possible U.S. trade policy disruptions as the main downside risk for international travel.

Outlook: optimism carries into 2026 and beyond

Despite global economic headwinds, Europe’s tourism outlook remains positive. Travelers continue to prioritize vacations and rely more on tech for comfort and savings. The report projects a 6.8% rise in 2026 arrivals.

Commenting on the results, Miguel Sanz, President of the European Travel Commission, said the summer once again confirmed strong appetite for travel in Europe, noting travelers are more selective, increasingly digital-first, and demand value, comfort, and authenticity.

Europe’s tourism industry is now focused on converting these shifting expectations into year-round growth, longer stays, and broader community benefits.

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