Rus Tourism News
War in Ukraine

How War in Ukraine Impacts Travel Sector

It is predicted that the war in Ukraine will result in reduced outbound travel from both source markets. In the short-term, neighbouring countries and those most reliant on Russia and Ukraine as source markets will be worst affected in terms of tourism performance. Eastern Europe’s recovery has been pushed back to 2025 due to the conflict, with arrivals now forecast to be 43% lower in 2022 compared to 2019.

The impact of the war could mostly hurt destinations such as Cyprus, Montenegro, Latvia, Finland, Estonia and Lithuania, where Russians made up at least 10% of total inbound travel in 2019. Beyond the visitor impacts, Russian tourists tend to be high spenders meaning that an even larger impact will be felt in terms of tourism expenditure in these destinations. In 2019, Russian spending contributed to 34% of total expenditure in Montenegro, 25% in Cyprus and 16% in Latvia. Overall, no immediate recovery is expected for countries with a high reliance on Russian tourism in the near-term.

Besides the direct effects of reduced travel both from Russia and Ukraine, the conflict has created other problems for the European travel sector. The inflationary effect of economic sanctions on Russia will continue to exacerbate rising jet fuel prices and may cause airfare price hikes this year. Other rising costs, such as food, may erode consumer demand and further impact travel in a range of markets. Additionally, the closure of Russian, Ukrainian, Moldovan, and Belarussian airspace to most Western European carriers will impact European-Asian air connectivity.

Moreover, the impact of the war in Ukraine could affect travel sentiment to Europe from overseas markets. A recent survey conducted by MMGY Travel Intelligence indicates that 62% of US travellers planning to visit Europe stated concerns about the war in Ukraine spreading to nearby countries as a factor impacting plans, which is double the number of respondents that mentioned Covid-19 health and safety concerns as a factor. Nevertheless, the US is expected to remain among the top performers in 2022 compared to other long-haul source markets.

Iuliia Tore