Europe’s tourism industry has continued its strong rebound through the summer months, as travellers embraced cross-border trips despite higher costs and record-breaking heatwaves. According to the European Travel Commission’s (ETC) latest quarterly report, international arrivals to Europe rose 3% year-on-year, while overnight stays increased by 2.7%, underscoring the region’s enduring appeal.
Travel Spending on the Rise
Although travel costs remain elevated, inflation across tourism-related services is easing, and consumers are prioritising holidays in their household budgets. The ETC projects that travel expenditure will account for 3.1% of total consumer spending in 2025 — surpassing both last year’s figure and the pre-pandemic average. Total visitor spending is forecast to grow by nearly 10% next year, highlighting the resilience of demand and Europe’s status as a global tourism leader.
Solid Summer Performance Across Regions
Most European destinations reported a successful summer season. Of 34 reporting countries, 30 saw growth in arrivals and overnight stays compared with last year. Southern destinations performed particularly well, led by Malta (+12%), Cyprus (+10%), Spain (+4%), and Portugal (+2%), fuelled by the popularity of sun-and-beach holidays.
Northern Europe also benefited from travellers seeking nature and cooler temperatures. Norway (+14%), Finland (+14%), Iceland (+3%), Latvia (+7%), and Estonia (+4%) all posted solid results. In Central and Eastern Europe, Poland (+13%) and Hungary (+9%) gained from strong price competitiveness. Only Germany (-2%), after hosting last year’s Euro football tournament, and Türkiye (-1%), where rising costs dampened demand, reported slight declines.
Changing Travel Habits and the Rise of AI
The report also highlights a shift in travel behaviour driven by both climate and technology. Nearly three in ten travellers from key source markets plan to change the timing of their trips over the next two years to avoid crowds, reduce costs, and escape extreme heat.
Meanwhile, the use of artificial intelligence (AI) in travel planning has surged. Adoption has nearly doubled to 18% in 2025, led by Gen-Z and Millennial travellers. AI tools are increasingly used to find better deals and plan off-peak trips. Usage is highest in China (40%) and the United States (27%), reflecting how digital habits vary across markets. With major online travel agencies now integrating AI-powered assistants, the ETC expects this trend to accelerate further.
“AI presents new opportunities for destinations to engage younger audiences, promote shoulder-season travel, and offer more personalised experiences,” the report notes.
Affordability Drives Destination Choices
Despite easing inflation, prices for travel and accommodation remain well above pre-pandemic levels. As a result, value for money continues to shape travel decisions. Countries such as Poland, Hungary, and Slovenia are benefiting most, attracting visitors with a combination of affordability and quality experiences. The competition among destinations for budget-conscious travellers is intensifying across Europe.
Long-Haul Markets Show Steady Recovery
Europe is also seeing renewed strength in long-haul markets, particularly from Asia. Arrivals from Japan increased by 24% year-on-year, while travel from China grew by 21%, aided by improved air connectivity and stronger currencies. Although volumes from these markets remain below pre-pandemic levels, momentum is improving.
The United States remains a key source of growth, with arrivals up 5% this year and 35% above pre-pandemic levels. However, Oxford Economics’ global risk survey warns that U.S. trade policy shifts could pose a risk to international travel in the coming years.
Optimistic Outlook Ahead
Despite a softer global economy, the ETC expects Europe’s tourism recovery to continue. The report forecasts a 6.8% rise in international arrivals in 2026, driven by long-haul demand from Asia-Pacific and steady intra-European travel.
ETC President Miguel Sanz praised the sector’s adaptability:
“This summer once again confirmed a strong appetite for travel to and within Europe, even amid higher costs and shifting conditions. Travellers are becoming more selective, seeking value, comfort, and authenticity while using new tools like AI to plan smarter journeys. Our priority now is to help destinations harness these trends to promote year-round travel and greater shared value for communities and visitors alike.”
