Why ECCIA insists on improving Europe as a premium tourist destination – WWD
MILAN — The European Cultural and Creative Industries Alliance, or ECCIA, has published a study analyzing the impact of high-end tourism on the European economy and its great potential for growth.
The main takeaway was that sales generated by high-end tourists on the continent, estimated at between €130 billion and €170 billion in 2019, could triple to €520 billion by 2030 at 2035 through investments in sustainability, infrastructure, political visas and education.
This multiplier effect was a recurring theme in Tuesday’s presentation by ECCIA president Matteo Lunelli, who is also president of Altagamma, the Italian association of luxury goods companies.
The ECCIA alliance includes five other European associations in addition to Altagamma, such as the Comité Colbert in France; Circulo Fortuny in Spain; Gustaf III Kommitté in Sweden; Meisterkreis in Germany and Walpole in the UK. Together, these organizations represent more than 600 brands – mainly SMEs – and cultural institutions.
Since its creation in 2010, ECCIA has underlined the importance of luxury as a key driver of growth and employment in Europe, having shown in a 2020 study that high-end European cultural and creative brands represent more than 70% of the world market, representing 4% of the European gross domestic product with a turnover of 800 billion euros.
On Tuesday, Lunelli reiterated the importance of this segment while presenting the preliminary findings of the first “ECCIA High-end Tourism Study” which will be published in its final version next month.
Produced by Bain & Company in conjunction with international flight-based travel trend analyst Forward Keys, duty-free shopping service provider Global Blue and the Virtuoso network of travel and experience tour operators luxury, the report aims to identify strengths and strategic levers to maximize the potential of the sector in the post-pandemic world.
The study showed that, even while representing a minority, high-end tourists – who are considered those staying in five-star establishments and are mainly American and Chinese travelers – accounted for 22% of total tourism revenue in Europe, which in 2019 were estimated between 575 billion euros and 725 billion euros.
With just 2% of accommodation providers, high-end tourism accounted for 22% of total spending on accommodation and up to 33% of spending on culture, entertainment and shopping, which was aggregated into a single group in the report.
The daily spend of high-end travelers was eight times that of the average traveler. Cultural entertainment and shopping accounted for half of their spending (compared to 35% for all tourists), while accommodation accounted for 30%, followed by restaurants and transportation.
The benefits of attracting an upmarket target have also extended to jobs, as evidenced by luxury hospitality operations employing nearly twice the workforce of similarly sized lower-end establishments. Other indirect contributions included improved perception of the overall tourism offer; growing attractiveness for investment and improved infrastructure, services and cultural programs; the resulting beneficial effect on the image and reputation of countries, and the preservation and development of know-how and professional skills, among others.
In geographical terms, 75% of premium tourism sales were generated in five European countries, including France, Italy, Germany, Spain and the United Kingdom. Considering the influx of international tourists, Europe as a whole attracted 51% of global arrivals, with the five countries mentioned above accounting for 35% of this share.
The breakdown for each nation showed high-end tourism sales of between €22 billion and €27 billion in France and around €25 billion in Italy, while total tourism revenues for both fell were between €80 billion and €100 billion in 2019. In the UK, the segment was worth around €33 billion to €35 billion.
Meanwhile, smaller countries have been quick to attract this group of travellers, including Switzerland, Greece and Portugal, where sales generated by this type of tourism have been estimated at around €5 billion to €10 billion. , 10 billion euros and 4 billion euros to 6 billion euros. , respectively. In some cases, this segment represents a pillar of the economy with an impact on GDP that is twice the European average, as in the case of Greece.
The study showed that travelers are increasingly interested in emerging countries with value propositions aligned with their new needs, such as well-being destination quests, unique experiences – also linked to natural phenomena such as the northern lights in Iceland – luxury resorts and entertainment islands are in demand.
“Take Mykonos, where the percentage of five-star establishments is higher compared to the Italian islands… Italy is perhaps the most sought-after destination, but is ultimately not the most visited by these travelers, often for lack infrastructure or adequate transportation,” noted Lunelli.
In particular, the report showed that five-star establishments in Italy account for 1.7% of total accommodation compared to 6 and 7% in Greece and Portugal, respectively.
“These countries are performing better, they have made a clear strategic choice focusing on higher positioning. … We are not here to promote this type of approach because we are snobs, but to protect the countries themselves “, said Lunelli, highlighting how, in the future, increasing the number of tourists will not be a sustainable option for cities, replaced by improving the quality of tourists.
Due to the lack of international travellers, in 2020, sales generated by high-end tourism in Europe would have lost between 65 and 75 billion euros. In Italy alone, the loss is estimated at between 10 and 12 billion euros.
Lunelli noted that while initially high-end tourism was expected to return to pre-pandemic levels by the end of 2022, restrictions in China and the ongoing war in Ukraine have further postponed the recovery to 2024 at best. scenarios.
“But it is important to use this moment to reflect and study not only how to revive tourism as a whole, but how to reposition it,” Lunelli said. “If we defend the current market share, we will organically double sales, reaching 280 billion euros by 2030 to 2035, but if we invest and act on key levers, we could triple these revenues.”
Lunelli called for a proactive approach as other destinations outside of Europe step up their game to attract this group of travellers. The president underlined the Middle East “which is no longer represented only by Dubai”; the United States for increasing its appeal to domestic tourists; Hainan’s vision to become a duty-free shopping destination, to keep high-spending Chinese in the country, and Bali to improve its facilities and become a recognized wellness destination.
Always in the light of this growing competition, Lunelli highlighted the importance of investment in luxury facilities and services, coordination between private entities and institutions and the development of entertainment programs and high quality cultural offer, between others.
ECCIA has identified five key areas to be leveraged to realize the sector’s potential, including the development of sustainable nature-based tourism; investment in infrastructure ranging from reception to transport to meet the requirements and higher standards of this target; a simplification of bureaucracy, in particular visa and tax-free policies, and the creation and promotion of educational programs to train adequate personnel in the hotel and tourism industry to fill jobs in the luxury segment.