Overall assessment of the impact on tourism

Added risk to a weak and uneven tourism recovery

Disruption of Russian & Ukrainian outbound travel

which accounts for some 3% of global spending = US$ 14 billion in 2020

Lower consumer confidence

particularly in more risk averse markets and segments

Impact on traditional destinations but also emerging ones

especially island and coastal destinations

Weaker economic growth and higher inflation

Higher oil prices + inflation + interest rates = higher travel costs for consumers & pressure on businesses, specially MSMEs

Threatens tourism-related jobs and businesses

impacting livelihoods

First and foremost, the biggest concern is for the human tragedy unfolding in Ukraine. Our thoughts go to the people suffering from this conflict.

Russia’s military offensive in Ukraine represents a downside risk for international tourism. It has exacerbated already high oil prices and transportation costs, increased uncertainty and caused a disruption of travel in Eastern Europe.

The destinations most impacted so far (aside from Russia and Ukraine) are the Republic of Moldova with a 69% drop in flights since 24 Feb. (compared to 2019 levels), Slovenia (-42%), Latvia (-38%) and Finland (-36%) according to data from Eurocontrol. Russian bookings of outbound flights also plunged in late February and early March but have since rebounded according to data from Forwardkeys.

Despite the conflict, European air traffic has grown steadily from mid March to early May. Air bookings also show rising demand for intra European travel and for flights from the US to Europe.

The easing of travel restrictions are contributing to the normalization of travel (36 countries had lifted all COVID 19 related travel restrictions as of 13 May 2022) but the conflict continues to pose a serious threat to the recovery.

The military offensive risks hampering the return of confidence to global travel. The US and Asian source markets could be particularly impacted, especially regarding travel to Europe, as these markets are historically more risk averse.

As source markets, Russia and Ukraine represent a combined 3% of global spending on international tourism as of 2020. A prolonged conflict could translate into a loss of US$ 14 billion in tourism receipts globally in 2022.

In 2019, Russian spending on travel abroad reached US$ 36 billion and Ukrainian spending US$ 8.5 billion. In 2020, these values were down to US$ 9.1 billion and US$ 4.7 billion, respectively.

As tourism destinations, Russia and Ukraine account for 4% of international tourist arrivals in Europe but only 1% of Europe’s international tourism receipts.

The importance of both markets is significant for neighboring countries, but also for European sun and sea destinations. The Russian market gained significant weight during the crisis in long-haul destinations such as Maldives, Seychelles and Sri Lanka.