How would euro breakup hit travel and tourism?

Tourist arrivals in European Union may decline by 11% in 2012

A worst-case scenario in the euro crisis would cripple Europe’s airlines and hotel groups as consumers and businesses cut travel budgets and prices fall, according to market research company Euromonitor International. If a disorderly breakup of the Eurozone takes place, the number of tourist arrivals in European Union countries would decline by 11% this year as a sharp recession hits the rest of the world economy. Tourist spending would fall by 17.3%. Spending on flights would drop by almost 20%.
A less severe scenario would be a Greek exit from the euro. That would prompt a 2.8% decline in the number of tourist arrivals to the EU, Euromonitor estimates. But if the Eurozone stays intact, arrivals in 2012 will probably decline by 0.7%. Some observers, such as tour operator Thomas Cook, are suggesting that Greece – which relies on tourism for a fifth of its economic income – could actually benefit from a euro exit. Tourism income there has already dropped by 15% in the first quarter of 2012.
Greeks vote in a crucial election this Sunday, which may result in the country being forced out of the euro.
[photo courtesy European Commission]


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