In-Depth Analysis of European Tourism and Hospitality Sector: Q1 2025 Statistics and Trends

May 24, 2025 - COTT.TV® presents a comprehensive analysis of the European tourism and hospitality sector for the first quarter of 2025. This report highlights country-specific statistics, hotel price trends by category, reasons for tourism increases and decreases, the impact of government support programs, and a comparison of hotel prices with inflation rates. Aimed at hoteliers and tourism stakeholders, it also showcases how COTT’s innovative IPTV solutions support the European hospitality market.

Market Analysis: Q1 2025 Trends

Overview of Recovery

The European tourism sector demonstrated resilience in Q1 2025, with international tourist arrivals increasing by 4.9% compared to Q1 2024, and overnight stays rising by 2.2%. Central and Eastern Europe led the recovery, with standout performances from Latvia (+27.8%), Hungary (+18.2%), and Poland (+16.2%). Conversely, Iceland faced a 5.7% decline due to rising costs, while Austria saw a 3.5% drop in overnight stays, possibly due to overtourism competition.

Chart 1: Growth in International Tourist Arrivals Q1 2025 vs. Q1 2024

Chart 2: Growth in Overnight Stays Q1 2025 vs. Q1 2024

Economic and Market Insights

Traveler expenditure is projected to rise by 14% in 2025, outpacing arrival growth, indicating higher per-trip spending. Challenges include labor shortages (100,000 workers deficit) and rising costs due to inflation and energy prices, particularly affecting high-cost destinations like Iceland.

Country-Specific Statistics and Hotel Prices

Tourist Arrivals and Trends

• Latvia: +27.8% growth, driven by affordability and consumer confidence.
• Hungary: +18.2% growth, boosted by cultural attractions.
• Poland: +16.2% growth, a cost-effective destination.
• Slovakia: +14.3% growth, popular for winter tourism.
• Norway: +13.2% arrivals, +15.3% overnight stays, with a 34% increase over 2019.
• Cyprus: +15.4% growth, fueled by off-season “cool-cation” demand.
• Malta: +12.6% growth, benefiting from off-season travel.
• Romania: +11.7% growth, enhanced by Schengen inclusion.
• Bulgaria: +1.4% growth, also supported by Schengen integration.
• Spain: Over 10 million arrivals in January–February 2025.
• Iceland: -5.7% decline due to high costs.
• Austria: -3.5% decline in overnight stays, possibly due to overtourism competition.

Reasons for Tourism Increases

• Affordability: Latvia, Hungary, and Poland attract budget travelers with lower accommodation and dining costs.
• Schengen Expansion: Romania and Bulgaria’s January 2025 Schengen inclusion boosts arrivals by simplifying travel.
• Marketing Campaigns: Latvia, Poland, and Hungary’s national tourism boards target intra-European travelers with cultural promotions.
• Off-Season Travel: Cyprus and Malta benefit from “cool-cation” demand for milder winter climates.

Reasons for Tourism Decreases

• High Costs: Iceland’s 5.7% decline stems from elevated hotel and dining prices, reducing competitiveness.
• Overtourism: Austria’s 3.5% drop may reflect competition from less crowded alternatives.
• Economic Uncertainty: New US tariffs and global concerns deter long-haul travel to high-cost regions like Monaco.

Hotel Prices by Category

Hotel prices vary by country and category, with 3-star prices from industry sources and estimated 4-star (1.5x 3-star) and 5-star (2x 3-star) rates adjusted for a 5% increase from 2024:

• Germany: 3-star $131.96, 4-star $197.94, 5-star $263.92
• France: 3-star $136.08, 4-star $204.12, 5-star $272.16
• Spain: 3-star $121.13, 4-star $181.70, 5-star $242.26
• Italy: 3-star $130.42, 4-star $195.63, 5-star $260.84
• Greece: 3-star $105.67, 4-star $158.51, 5-star $211.34
• Poland: 3-star $81.42, 4-star $122.13, 5-star $162.84
• Hungary: 3-star $68.77, 4-star $103.16, 5-star $137.54
• Latvia: 3-star $77.99, 4-star $116.99, 5-star $155.98
• Romania: 3-star $60.04, 4-star $90.06, 5-star $120.08
• Bulgaria: 3-star $66.30, 4-star $99.45, 5-star $132.60
• Malta: 3-star $114.43, 4-star $171.65, 5-star $228.86
• Cyprus: 3-star $120.62, 4-star $180.93, 5-star $241.24
• Norway: 3-star $138.48, 4-star $207.72, 5-star $276.96
• Austria: 3-star $137.11, 4-star $205.67, 5-star $274.22
• Iceland: 3-star $218.99, 4-star $328.49, 5-star $437.98

# Chart 3: Average 3-star Hotel Prices in Selected European Countries (Q1 2025)

# Chart 4: Average 4-star Hotel Prices in Selected European Countries (Q1 2025)

Price Comparison with Currency Inflation

General inflation in the euro area for Q1 2025 ranged from 2.2% to 2.5%, but hotel price inflation reached 4–5%, driven by demand and supply constraints. Examples include:

• Romania: General inflation 5.1%, hotel prices up 5%, aligning due to budget market dynamics.
• France: General inflation 0.9%, hotel prices up 5% in tourist hubs like Nice.
• Spain: General inflation 2.5%, hotel prices up 5–10% in Madrid and Barcelona.
• Iceland: General inflation 6.2%, hotel prices up 7% due to high operational costs.

# Chart 5: Hotel Price Inflation vs. General Inflation (Q1 2025)

Emerging Trends

• Off-Season Travel: Cyprus and Malta see growth from “cool-cation” demand.
• Sustainability: 60% of hotels adopt eco-certification under the EU Green Deal.
• Digital Transformation: 83% of hotel revenue expected from online sales by 2029.
• Economic Challenges: Labor shortages and inflation impact high-cost regions.

The Role of Technology

Technology enhances guest experiences, with COTT.TV® providing IPTV solutions featuring live TV, on-demand content, and smart controls. The Android app installs in 2 hours, while the COTT Hotelier® W2 STB (55 EUR/235 PLN each, 4.5 EUR/room/month) supports non-Android setups. Future plans include AI personalization and voice controls.

Government Initiatives and Effectiveness

• Ireland: Proposed 9% VAT rate reinstatement for food services aims to ease financial strain, with uncertain outcomes due to economic pressures.
• Scotland: The 2025-26 Export Plan diversifies markets, showing early positive signs despite global challenges.
• EU-Wide: ETIAS and Entry/Exit System boost arrivals in Romania and Bulgaria, proving effective.
• Latvia and Poland: Marketing campaigns drive growth, proving highly effective.

Recommendations for Market Growth

1. Leverage Off-Season: Promote “cool-cation” packages in Mediterranean regions. 2. Adopt Technology: Use COTT.TV®’s IPTV systems to stand out. 3. Promote Emerging Areas: Market Central/Eastern Europe to ease overtourism. 4. Focus on Sustainability: Implement eco-friendly practices. 5. Local Collaboration: Partner with local businesses for authentic experiences.

Conclusion

The European tourism and hospitality sector in Q1 2025 shows resilience with a 4.9% rise in arrivals and 2.2% in overnight stays. Countries like Latvia and Hungary lead, while off-season trends boost Mediterranean destinations. High costs challenge Iceland and Austria, but government initiatives and technology, like COTT.TV®’s solutions, offer growth paths. Contact Us For more insights or to explore how COTT’s technology can elevate your hotel’s guest experience, contact our team at [email protected] or visit www.cott.tv.

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