The European Central Bank (ECB) notes that the recovery in tourism is slowing down due to strong price increases, especially due to higher energy prices.
“The strong dynamics in the tourism and leisure sector observed in spring and summer have started to weaken,” say ECB economists Tobias Schuler, Hannah-Maria Hildenbrand and Martina di Sano in an article in the economic bulletin, published today.
Reserves tend to show prices in the tourism and recreation sector one to two months ahead.
“As the tourism and recreation sector gradually opened up in the euro area after each wave of the covid-19 pandemic, input cost pressures and the exceptionally strong recovery in demand” for these services boosted output prices.
Energy is the main factor driving up prices in tourism.
ECB economists expect demand for tourism and recreation services to weaken in the coming months as travel demand booms, real incomes fall, uncertainty rises and prices are higher.
The indicators they use peaked in May and have since declined in line with travel agents’ expectations of lower demand.
It is therefore possible that prices in the tourism sector will gradually stabilise at a high level.