Travel costs in Europe were high in 2024, causing many tourists to change their plans. 

More people chose cheaper destinations and shorter trips, according to the European Travel Commission’s latest report. Higher prices for hotels and flights led many to look for better deals.

Travel costs, shifting consumer preferences

The report found that 19% of European travelers avoided trips because of high costs. Many long-haul visitors from China and the Asia-Pacific region also held back due to expensive airfare and fewer direct flights to Europe.

“The resilience of the European tourism sector remains strong, but high costs continue to shape where and how people travel,” said Jennifer Iduh, Head of Research & Insights at ETC.

Growth in shorter trips, budget destinations

International tourist arrivals to Europe in 2024 rose by 2% compared to 2019. However, growth varied by region.

Southern and Mediterranean countries like Portugal, Greece, and Montenegro saw slower growth after a strong summer. In contrast, Iceland had a 14% rise in visitors, mainly drawn by the Northern Lights.

Eastern and Central Europe recovered more slowly, with foreign arrivals still 7% below pre-pandemic levels. Latvia and Finland saw small gains but remained below 2020 numbers.

The report noted that travelers favored destinations where their money went further, such as Serbia, which had a 7% rise in Chinese visitors due to easier visa rules.

Air travel recovery faces barriers

European air travel kept recovering but faced challenges. Passenger numbers stayed high, but bad weather and limited flight options caused problems. Airlines had to reroute flights around Russian airspace, leading to longer trips and higher costs.

In August, available seat capacity was only 2.3% higher than in 2019, falling short of expectations.

Serbia and Greece saw strong growth, with flights increasing by more than 20% compared to 2019. In contrast, Sweden had fewer domestic flights due to aircraft shortages, and UK airports faced delays from winter storms.

Hotel industry, short-term rentals see mixed performance

Europe’s hotel industry stayed strong, with occupancy rates rising in late 2024. 

However, travelers looked for better value, causing a small drop in average daily rates. Short-term rentals increased, led by France, though availability declined after the Olympics, suggesting a return to normal levels.

Iceland became the most expensive short-term rental market, surpassing Monaco, with average rates at €216 per night. Meanwhile, budget-conscious travelers chose Eastern European countries like Lithuania and Poland for their lower accommodation costs.

Chinese, US travelers shape market trends

Chinese tourism to Europe remained nearly 40% below 2019 levels, despite hopes for a strong recovery. Limited direct flights and high costs slowed the rebound.

Visa-free policies helped some countries, with Serbia seeing a 48% rise in overnight stays from Chinese visitors.

Meanwhile, transatlantic travel played a major role in Europe’s tourism recovery. US arrivals exceeded expectations, with 22 out of 27 destinations reporting growth.

Turkey saw a 153% jump in American visitors, while Portugal and Montenegro also experienced strong increases. However, potential economic policy changes under a new Trump administration created uncertainty for future travel demand.

Changing travel regulations and their impact

Changes to European travel rules, including the launch of the European Travel Information and Authorization System (ETIAS), will affect tourists, long-term visitors, and migrants.

Starting in 2026, the ETIAS will require travelers from visa-exempt countries to get approval before entering the Schengen Area. While intended to improve security, this could make travel more complicated.

Migrants and long-term visitors will also face new visa policies as some countries adjust Schengen visa rules to balance tourism and border control.

Higher travel costs and stricter entry rules may make Europe less appealing to digital nomads and long-term travelers seeking affordability and easy movement.

Policy adjustments in response to economic,  migration challenges

Economic challenges in Europe are pushing governments to rethink immigration policies. Some countries are tightening work and residency visa rules to control migration, while others are easing restrictions to attract skilled workers and support their economies.

Portugal recently changed its visa rules for immigrant workers, which could affect tourism-related industries that depend on foreign labor. Germany and Spain are looking for ways to simplify visa processes for high-skilled workers.

Meanwhile, countries facing overtourism, like the Netherlands and Italy, are considering stricter limits on short-term residency permits to address housing shortages linked to tourism.

As these policies shift, European nations must balance economic needs with sustainable travel and migration management. Changing visa and immigration rules will shape the future of both tourism and long-term residence in the EU.

Value-driven travel, sustainability

In 2025, European travel will keep adjusting to economic challenges and changing consumer preferences. Sustainability and affordability will be major trends, as more destinations introduce tourism taxes and travelers look for cheaper options.

Ongoing economic and political uncertainties create both risks and opportunities for the travel industry. To stay strong, the sector will need to focus on cost-effective options and sustainable practices.