Travel, Europe’s overlooked economic powerhouse

How travel and tourism power economies but remain undervalued in policy

Europe’s policymakers focus on semiconductors and clean tech, yet the continent’s real growth engine may be hiding in plain sight: travel and tourism. As Oxford Economics projects the industry to outpace manufacturing and finance, the question is whether Europe will recognize its strategic value or continue to treat it as an afterthought.

Key takeaways

• Fastest-growing global sector: travel and tourism are forecast to expand faster than finance, manufacturing, and ICT between 2024 and 2029.
• €400 billion inflows: tourism receipts in the EU’s top ten markets rival the GDP of a mid-sized member state, fueling local economies with export revenues.
• SME-driven ecosystem: small and family-run businesses generate 81% of hospitality’s value added and nearly 85% of employment, providing diversity and authenticity that attract global travelers.
• Digital divide challenge: chain hotels outperform independents in sentiment and tech adoption, leaving SMEs at risk of falling behind due to cost, staffing, and digital skill barriers.
• Policy imperatives: upskilling the workforce, supporting SME innovation, and widening access to digital platforms are critical to prevent a two-speed industry.
• Strategic significance: beyond GDP, tourism sustains rural and coastal regions, anchors supply chains, and strengthens Europe’s cultural soft power.

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