The European Tourism Forum is the most important high-level event on tourism that the European Commission organises with the country that holds the Presidency of the Council of the European Union during the second half of the year.
This year, participants discussed digitalisation through the sharing economy, promotion of Europe via transnational and pan-European thematic products, skills and competences, and streamlining the regulatory and administrative framework for tourism on the example of current and future visa requirements.
Summary of the discussions at the European Tourism Forum is the following:
Europe has been holding a leading position in the global tourism market, however, long-term growth projections point to an increase of 2.1% in international tourist arrivals to EU destinations through 2025, a much slower pace than the 2.4% average observed over the period 1995-2010, and well below the projected world average rate of 3.5%. If no action is taken, this would inevitably result in a decline in EU’s share of the international travel market, as a result of tourism growing faster in emerging world regions. In the EU, nearly 90% of all international travel comes from within the region, a share limited to 73% and 75% in Asia and the Pacific and the Americas respectively. This has tangible effects on tourism earnings as long-haul travel is typically associated with longer stays and higher spend. According to UNWTO, in 2014 destinations in Europe earned € 660 per international arrival, compared to an average of € 1,080 for destinations in Asia and the Pacific, and € 1,140 in the Americas. Increased marketing efforts across a wider range of markets, especially from long-haul, is needed to attract new segments and improve the profitability of the European tourism sector.
Panel speakers drew attention on the need to discuss about the tourism more, establish smarter cooperation among stakeholders within a member state and at a governmental level and provide financing to it. Speakers highlighted that EU Visa issue will definitely affect long haul markets. Speakers agreed that diversity of Europe is an advantage in comparison to other markets; however the existing structures that promote Europe abroad and create transnational products should be supported and reinforced.
A representative of Expedia highlighted that a combination of marketing is required when promoting Europe to the long haul markets. Europe has to be promoted in general first and it has to be followed by the promotion of separate destinations. Some interesting facts were given: on average people check 35 online sites before they decide on their destination, 35% of millennials use smart phones to book, 75 % of Chinese use websites as a reference point. Interesting comparison was made on where Chinese want to go and where they go at the end.
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European Tourism Association (ETOA) noted that perception exists – if something happens in Europe, long haul tourists will not go to Europe and it does not matter if the problem is in one country and the tourist destination is in the other.
European Travel Commission (ETC) highlighted that both sides (tourists and tourism stakeholders) should be listened, because some transnational tourism products can be more interesting for some nations but not the others.
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The tourism sector accounts for almost 25 million jobs in Europe (around 11% of the total employment). Contrary to other sectors, tourism industry still relies almost exclusively, and has to rely, on competences and skills of its human capital. However, the industry, in particular SMEs, struggles to find and retain skilled employees. The sector does not appear high on the list of the most popular graduate jobs, in particular due to negative perception of the job quality, seasonality and limited career prospects.
Furthermore, in addition to the traditional qualification profile, tourism professionals are expected to deliver innovative and customized services for a wide range of target groups, including seniors, or travelers with special needs. Moreover, the explosion and rapid evolution of digitalization in the tourism sector requires new, specific knowledge not only from employees, but also from tourism entrepreneurs. SMEs often lack the necessary e-management skills that would enable them to keep up with the developments of online market places and distribution channels, new forms of marketing and communication with customers.
Skills mismatch is among the fundamental problems hampering the competitiveness of the tourism industry. The competences acquired by tourism professionals at all levels of the skills spectrum during education and training often do not match the expected performance. Education providers have a limited understanding of the requirements of employers and expectations of travelers in terms of the service provided.
The Commission launched the European Tourism Portal which provides information, tutorials and tools for SMEs to learn more about various skills, such as setting-up, managing, promoting and going digital with their tourism business. It is also carrying out a study to map performance of the supply side of education and training for tourism the results of which will be presented at a conference in October 2015 in Brussels.
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The contribution of the tourism sector to the EU's employment and GDP is crucial and growing. More than 9% of the EU's GDP comes from tourism (directly or indirectly). Although Europe boasts a healthy tourism industry, emerging markets are challenging its leading position. The EU market share in world tourism has gradually dropped from 56% in 1980 to 40% in 2010 and, if things remain unchanged, is expected to fall to a level of 31% by 2030.
To retain Europe’s position of No 1 destination, Europe has to keep on focusing on tourists from fast-growing third countries. Two of the most important European source markets of international arrivals require a Schengen visa, notably China and Russia. China and Russia are ranking as number 1 and 4 biggest spenders on international tourism for the year 2013, according to UNWTO.
Modern travelers show a tendency to shorter booking lead times, and, accordingly, prefer destinations that require limited planning. However, in 2013, 74% of the world's population needed a visa before arrival when travelling to Europe (respectively 77% for the EU). More flexible and accessible visa rules could lead to an increase in trips to the Schengen area of between 30% and up to 60% from China, India, the Russian Federation, Saudi Arabia, South Africa and Ukraine alone.
The “Visa Package” adopted by the Commission in April 2014, which included (i) a proposal for the recast of the Regulation on the Union Code on Visas and (ii) a proposal for a Regulation establishing a touring visa, represented an important step forward.
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The European Commission expressed its balanced approach towards the current situation. Consumer behavior is changing, people like to control what experiences they have during their travels and on-line platforms are giving more options for consumers to choose from. At the moment the European Commission observes the situation and learns more about the sharing economy. The Commission aims to be embracing with an approach of balancing out the situation.
OECD is working with its members and early next year (January) it will publish a study on the sharing economy. Report will identify which Peer to Peer (P2P) options are available in the market. OECD agrees that tourism sharing economy benefits tourism sector, stimulates innovation, provides more options for consumers, and brings tourist to new destinations. Tourism sharing economy competes with traditional tourism businesses, but it is often a complementary. The development of tourism sharing economy causes challenges and places pressure on traditional tourism regulation. One of the main issues is taxation, - how to ensure that taxes are paid? OECD believes that it is an opportunity now for governments to re-think the existing regulative framework. Governments should help to take advantages of opportunities and respond to challenges. A study on the impact of tourism sharing economy should be innitiated.
Italian Hotel Association of Confindustria agreed that consumers can take advantages if they have more options, however tourism sharing economy can lead into unfair competition and proper regulation has to be in place. Traditional accommodation sector is disadvantaged due to over-regulation. The situation has to be reviewed, clear rules have to be set for everybody and consumer has to know what he/she is buying. Taxation should be fair as well.
The Spanish Hotel and Lodging Confederation (CEHAT) questioned if it is a sharing or shadow economy? It was mentioned that regardless hotels and other types of accommodation, short term rentals also exist and it is not considered as tourism sharing economy. The CEO of confederation highlighted that P2P websites are very profitable and they experienced 5000% growth in the last 5 years. 93% are private homes rented and they receive compensation. In general, hotels industry is not against, it looks at tourism sharing economy as to another type of accommodation; however the reality is that everybody has to comply with legislation. Study of Boston University shows that 10% increase of tourism sharing economy decreases hotel revenue by 0.35%. Competition authorities need to create a soft regulation to tourism sharing economy and they should eliminate regulations to heavily regulated hotels. Level playing field has to be in place.
ANEC (consumer voice in standardization) keeps a similar position to the European Commission. ANEC survey 2013 shows that 73% of trips were booked via internet, out of which 24% in comparison sites. 30% of consumers shared their negative reviews online. 2014 DG SANCO (DG JUST at the moment) review on fake hotel reviews online showed that a potential abuse of reviews exists; there is no clarity about the offer, sponsored rankings and etc. It reminded of ISO TC 290 standards on online reputation, online reviews which is voluntary, but complementary to legislations.
Airbnb highlighted that consumers nowadays became producers. Airbnb has 1,5mln homes and 62% of these are within Europe. Half of the Airbnb travelers are European. Airbnb had 50mln guests in 2015 and had only 300 emergency calls. Airbnb spreads beyond traditional tourists destinations as 74% of Airbnb homes are outside the usual hotels districts. France is the 2nd largest Airbnb country after USA. 72% of Airbnb users are more likely to come back to France. Average monthly earning per host in France is 300 EUR and 83 % of users share their primary home they live in Paris. Airbnb measured 1bn EUR impact in overall in France and from 1st October, 2015 it will collect visitors’ tax. Anonymity is not welcomed in a platform. Airbnb expressed their commitment to dialogue at EU and governmental level.
MEP Isabella de Monte highlighted the need for fair and flexible rules that provide sufficient consumer protection. Minimum level of safety rules have to be everywhere. There has to be a soft regulation that promotes growth in tourism. The objective is to support tourism sharing economy whilst observing it.
Tourism Department of the Catalan Government deeply supported global rules for everybody and local coordination of them. It was also expressed that is it very hard to contact non-traditional tourism players as they are based elsewhere. A regulation for all P2P for profit actors has to be in place. An example of Catalonia was presented. In order to regularize an “invisible” accommodation activity, maintaining minimum standards of quality, clearly identifying parties responsible for the activity, combating unfair competition, establishing transparency and consumer protection, Catalonia released a regulation of the private home accommodation service (homes for tourist use) as an economic activity liable to regulation through public law. During February 2013-September 2014, 35 803 accommodations were registered, and during October 2015 – the present, 45 297 were registered. A worry has been expressed that digital platforms registered outside of Catalonia are not sensitive towards Spanish obligations set.
At the Q&A part, hotels industry highlighted the need for governmental actions to make sharing economy accommodations comply with the rules. It also noted, that sharing economy should present the impact on employment (what kind of employment is created and how much).
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