European Tourism Buoyed by Cheap Oil

European Tourism Buoyed by Cheap OilEuropean Tourism Buoyed by Cheap Oil

Travel and tourism companies are looking forward to a solid year in Europe thanks to recovering economies and a fall in oil prices.

Many recent economic data reports have beaten expectations and signs of a long-awaited recovery in Europe are starting to show through in the profits of leading global companies, according to Reuters.

Emirates Airline President Tim Clark said quantitative easing by the European Central Bank could boost the regional economy while lower oil prices, which can reduce petrol and heating costs, would give consumers more disposable income.

“People have had it bad for so long, they want to get on with their lives, start spending, and travel is part of that,” he said during ITB travel trade fair in Berlin.

Tour operators, such as TUI, DER Touristik and Alltours, report strong demand this year for holidays in destinations such as the Canary Islands, Egypt, Thailand, and even Greece as tourists prove undeterred by political uncertainty there.

Red Sea resort Soma Bay says it has seen an increase both in the number of visitors, most of who traditionally come from Germany and revenues in January and February.

“Easter is looking fantastic ... we think we’re going to fill up,” General Manager Ibrahim El Missiri told Reuters.

Last year, Soma Bay had to offer perks like free upgrades or extra rounds of golf to get an 85% occupancy rate for Easter after a flare-up of violence in Egypt hit tourist bookings.

German carrier Lufthansa, traditionally focused on business routes, is also hoping to take advantage of rising demand for leisure travel by launching low-cost long-haul flights to places such as Cuba and Thailand.

Others are meanwhile expecting the strong U.S. dollar to lure visitors from the United States to Europe.

“Since we are dominant in Europe, we’ll be the first recipient of the greater number of U.S. travelers,” Sebastien Bazin, CEO of French hotels chain Accor, told Reuters at the IHIF hotels conference.

DER Touristik and TUI Germany said demand for trips to the United States was still strong. DER said it had locked in rates that did not yet reflect a recent strengthening of the U.S. dollar against the euro.

International tourism arrivals in Europe are expected to rise by between 3 and 4%  this year, compared with 4% last year, according to forecasts from the United Nations World Tourism Organization (UNWTO).

“Europe, which was most affected by the downturn, has been one of the best performers. It will continue to grow,” UNWTO head Taleb Rifai said.

Several companies at the ITB trade fair said they expected demand in 2015 to outstrip last year.

“We are above year-earlier levels in all our source markets,” said Dieter Zuempel, sales chief of Alltours, which expects to significantly exceed its initial target of % booking growth for its financial year which ends on Oct. 31.