Europe Tourism Slump
Carlos Moreno  /  AP
Manolo Ortiz, owner of the Moby Dick and El Trebol restaurants stands by empty tables in Arona on the Canary island of Tenerife.
updated 8/6/2009 1:03:15 PM ET 2009-08-06T17:03:15

To anyone crammed in a water taxi on a hot August day, Venice seems as full of tourists as ever. This year many of them are speaking Italian.

Summer in Europe is traditionally a time of holiday and travel — but the continent's famous tourist destinations have a decidedly more provincial air these days.

Increasingly, Europeans are taking their holidays in their home country, a result of the recession and a problem for industries that depend on international travel, such as airlines, whose woes could be deepened if fears of a wider swine flu outbreak materialize.

International tourism arrivals in Europe were down 10 percent in the first four months of the year. If early signs of economic recovery hold, the U.N. World Tourism Organization forecasts that to improve slightly to a drop of between 5 percent and 8 percent — reflecting drops in such top destinations as France, Spain and Greece.

France, the world's No. 1 tourist destination, saw a decrease of 4 percent in foreign visitors last month, and that is expected to rise to as much as 30 percent when July and August numbers are tallied. The hope for France's tourist industry, 6 percent of GDP, are French tourists, said secretary of state for tourism Henri Novelli, who believes that French demand will make up for foreign demand.

Budget Europe The last thing leisure-loving Europeans are going to let get in the way of their proverbial summer holidays is a little thing like the global economic crisis. And in such tourist-dependent countries as Italy and France, officials say homegrown tourism could be a hedge against a drop in international arrivals.

While many Europeans are getting the break they need, the fragmented industry that flies them to their destination, fuels their cars, books their hotels, drives them in taxis and prepares local fare in restaurants is not getting much of a break at all.

"We have some evidence that people are traveling less. That is a fact," said Geoffrey Lipman, deputy secretary-general of the UNWTO.

Slideshow: European escapes At the same time, "people have come to accept a holiday as part of their annual routine. They perhaps are staying closer to home. ... What they also are doing is trading down, not traveling business but economy, booking a three-star instead of a four-star package."

But even this pattern could change, the longer the downturn continues, or if there is an uptick in cases of swine flu, Lipman said.

And those uncertainties can mean tougher times ahead for the tourist industry, which still does not know how deep the hurt will be.

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Italian hoteliers say already 20 percent of jobs have been lost in the sector in January. In Greece, officials forecast the loss of some 19,000 tourism-related jobs this year.

"We are not an industry asking for a bailout, in the same way as motorcars, manufacturing or banks," Lipman said. "What the tourist industry is going to do is say, 'There are many ways you can help us by doing intelligent things. By reducing taxes rather than raising them, encouraging people rather than discouraging them. If you are giving incentives for people, put tourism in there.' "

Lipman said stimulus packages in 60 countries worldwide include provisions that either aimed specifically at tourism or at sustaining small- and medium-sized enterprises that comprise some two-thirds of the tourism industry delivery chain.

Experience cheap thrills in LondonIf any one area may need help, Lipman said, it would be the airline industry, which is already suffering huge losses and keeping up passenger numbers with fare sales.

In Spain, which like Italy derives 11 percent of its GDP from tourism, the government last month approved a euro1 billion ($1.42 billion) aid plan to boost the tourism sector through the recession. It includes a euro500 million ($711 million) credit package to help make tourist venues more environmentally sustainable.

The Italian Tourism Industry estimates that the number of tourists in Italy will rise by 11 percent this summer albeit for shorter stays. But that figure is disputed by a national hotelier association which says the increase will be a more modest increase of 1.5 percent offset by an 18 percent decline in spending and a 17 percent decrease in duration.

Swedes, Austrians and Italians are among those staying close to home for their holidays.

Rome's street artistsThe Italian Tourism Ministry says Sicily has usurped Spain as a destination for sun-seeking Italians. Tiny Montenegro also is benefiting by the tendency to vacation close to home: Visits are up 4 percent, mostly from neighboring countries.

But the situation is dire in Croatia.

Locals may relish the empty beaches, but the national economy, which takes 15 percent from tourism, is forecast to contract up to 4 percent this year. Tourist spending is needed more than ever, with even the World Bank noting that the "knockoff effect of the global crisis on the tourism season" would determine how much Croatia's economy will shrink.

Outlooks are hampered by last-minute bookings, especially prevalent among German travelers worried about their future. "They have to ask themselves, 'Do I have enough money? Will I have a job tomorrow?" said Christian Taenzler of the Berlin tourism office.

Among the most-missed European travelers: the Brits, who are staying at home, despite the soggy summer, due largely to the drop in value of their currency.

In Switzerland, the number of hotel nights by British tourists has dropped by 20 percent in the first half of the year. Arrivals by Britons in Spain are off by 16 percent.

"We cater to English tourists and residents, and can tell you the numbers are down and they don't have a lot of money," said Neil Manley, owner of Coral Bar and Restaurant, a traditional English fish-and-chips establishment on the Spanish resort island of Tenerife. "It's alarming because there doesn't seem to be an end to it."

Tourism officials, however, are optimistic that their sector will be the first to benefit from any sustained recovery.

"I think the tourism industry may come back before other industries," said Rob Franklin of the Brussels-based European Travel Commission. "There will be pent-up demand. There is no doubt about it. ... It is a resilient industry. You only need to look at the past to see how quickly tourism will bounce back."

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Photos: Perfectly Paris

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  1. Mood lighting

    The Eiffel Tower and the Hotel des Invalides are illuminated at dusk with in Paris. (Mike Hewitt / Getty Images) Back to slideshow navigation
  2. Heart of the Louvre

    The intricate ceiling of the Appolo Gallery at Paris' Louvre Museum is reflected in a display case in the foreground. Built in 1661, the gallery was not fully completed until 1851. In all, over twenty artists worked on the decoration. The Appolo Gallery gallery contains more than two centuries of French art, and houses such wonders as the French Crown Jewels, including the famous Régent (140 carats) and Sancy (53 carats) diamonds, as well as the 105-carat Côte de Bretagne ruby. (Joel Robine / AFP - Getty Images) Back to slideshow navigation
  3. To the heavens

    The Sacred Heart Catholic church (Basilique Sacré-Coeur) is seen on Paris' highest point, in Montmartre. The view at the top of the dome is excellent -- 271 feet above Montmartre Hill -- and is the second-highest viewpoint after the Eiffel Tower. (Benoit Tessier / Reuters) Back to slideshow navigation
  4. Looking glass

    This elaborate stained-glass cupola (dome) inside Magasins du Printemps department store is located above the main restaurant in the store. Installed in 1923, it is composed of 3,185 individual pieces of stained glass. (David Lefranc / Paris Tourist Office) Back to slideshow navigation
  5. Keeping cool

    Tourists soak their feet in a reflecting pool at Place du Trocadero, an area of museums and gardens. (Gabriel Bouys / AFP - Getty Images) Back to slideshow navigation
  6. Sights from the Seine

    A "Bateau Mouche" tourist boat travels near the Paris Justice court. These boat tours are a popular, but relaxing way to view the sights of Paris along the Seine River. (Benoit Tessier / Reuters) Back to slideshow navigation
  7. Museum of masterpieces

    Originally a royal fortress for kings, and open to all since 1793, the Louvre is one the world's greatest art museums, housing 35,000 works of ancient and Western art, displayed in over 60,000 square meters of exhibition space. More than 6 million visitors see the Louvre per year. (Mike Hewitt / Getty Images) Back to slideshow navigation
  8. Shopper's haven

    Local art, food and other goods are sold in passage Jouffroy, across Boulevard Montmartre. Originally designed to protect pedestrians from mud and horse-drawn vehicles, the passages (shopping arcades), arre located between the Grands Boulevards and the Louvre. (Amélie Dupont / Paris Tourist Office) Back to slideshow navigation
  9. Modern art

    A view of the Centre Pompidou in Paris. Its 1977 factory style architecture contrasts with the surrounding buildings of Paris' oldest district near Notre-Dame cathedral. It has a public library, and the French National Museum of Modern Art. (Loic Venance / AFP - Getty Images) Back to slideshow navigation
  10. Holy architecture

    One of the finest examples of French Gothic architecture is the Notre Dame Cathedral, attracting 13 million visitors each year. The name Notre Dame means "Our Lady" in French. (Stéphane Querbes / Paris Tourist Office) Back to slideshow navigation
  11. Practical protectors

    The famous stone statues of Notre Dame. (Amélie Dupont / Paris Tourist Office) Back to slideshow navigation
  12. Tranquil gardens

    The Jardin des Tuileries is Paris's most central garden. Its fountains, sculptures, cafes, formal gardens, and central location, make it a popular destination for visitors and locals. (Amélie Dupont / Paris Tourist Offi) Back to slideshow navigation
  13. Tuileries Palace

    Tuileries Palace encloses the western end of the Louvre and the formal gardens that make up Jardin des Tuileries park, stretching from the Louvre to the Place de Concorde, and bordered by the Seine. (Bruce Bennett / Getty Images) Back to slideshow navigation
  14. Moulin Rouge

    The cabaret Moulin Rouge was built in 1889, in Paris' red-light district of Pigalle on Boulevard de Clichy. The Moulin Rouge is best known as the birthplace of the can-can dance. (David Lefranc / Paris Tourist Office) Back to slideshow navigation
  15. Flowing with history

    The Fontaine des Mers at one of the main public square, Place de la Concorde. At 20 acres, it is the largest square in Paris. (Henri Garat / Paris Tourist Office) Back to slideshow navigation
  16. Honoring warriors

    The Arc de Triomphe stands in the center of the Place Charles de Gaulle, at the western end of the Champs-Elysees. The arch honors soldiers who fought for France. The names of generals and wars fought can be found on the inside and top of the arc. Underneath, is the tomb of the unknown soldier from World War I . (Bruce Bennett / Getty Images) Back to slideshow navigation
  17. Coffee break

    People walk past a boulangerie (bakery) in the Montmartre district in Paris. (Michel Euler / AP) Back to slideshow navigation
  18. Paris blues

    A piece of renowned French Roquefort blue cheese is displayed in a shop in Paris. (Philippe Wojazer / Reuters) Back to slideshow navigation
  19. Pricey real estate

    The Place Vendome is an octagonal square located to the north of the Tuileries Gardens and east of the Eglise de la Madeleine. The bronze spiral column at the center of the square was constructed in 1810 by Napoleon to celebrate the French army’s victory at Austerlitz. Within the square are apartments, and posh hotels and high-end retailers, including Cartier, Chanel, and Bulgari. (Benoit Tessier / Reuters) Back to slideshow navigation
  20. French connection

    The high-speed rail network in France goes to several Parisian train stations, including Gare Du Nord shown here. The name was derived by the idea that travelers would be able to travel to Belgium, Netherlands, Northern Germany and the Scandinavian countries. It is the busiest railway station in Europe, and the third -busiest in the world. (Cate Gillon / Getty Images) Back to slideshow navigation
  21. The grandest address in Paris

    The Pere Lachaise cemetary (Father Lachaise Cemetery) on the eastern edge of the city, is named after the Jesuit Father Lachaise, King Louis XIV's confessor. Many famous people are buried here, including Musset, Chopin, Moliere, Oscar Wilde, Delacroix, Balzac, Jim Morrison. (Amélie Dupont / Paris Tourist Office) Back to slideshow navigation
  22. Impressive collection

    The Musée d'Orsay is one of Paris' most popular museums, housed in the former railway station, the Gare d'Orsay. The museum houses an extensive collection of sculptures and impressionist masterpieces by Monet, Degas, Renoir, and Cezanne. (David Lefranc / Paris Tourist Office) Back to slideshow navigation
  23. Grand design

    The Grand Palais (Big Palace) was built for the World Fair of 1900. The building is best known for its enormous glass-domed roof, making it one of Paris’ most recognizable landmarks. The Grand Palais was the work of three different architects, and is currently the largest existing ironwork and glass structure in the world. (Marc Bertrand / Paris Tourist Office) Back to slideshow navigation
  24. Prestigious avenue

    The Louis Vuitton department store is located on the stunning Champs-Elysees, one of the world's most famous and beautiful streets. (Mike Hewitt / Getty Images) Back to slideshow navigation
  25. Le Pantheon

    Le Pantheon was originally intended to be a church dedicated to Saint Genevieve to fulfil a vow made by Louis XV while he'd fallen ill. It was used for religious and civil purposes until 1885 and now functions as a famous burial place. (David Lefranc / Paris Tourist Office) Back to slideshow navigation
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