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War or Not, Americans Are Still Headed to Europe

Despite Russia’s invasion of Ukraine, travel and hospitality businesses are still seeing demand for European travel this summer. So far. 

The declining number of Covid-19 cases coupled with loosening pandemic restrictions is feeding the pent-up demand for leisure travel overseas. The dollar’s strength against the euro certainly boosts affordability for Americans, though some of the gains consumers see may be offset by the rising airline fares driven by demand and soaring fuel prices.

The bottom line? After spending two years largely cooped up indoors, people are ready to bolt. Clearly, Russia is off the map as a flight destination, and cruise lines such as Norwegian are rerouting voyages to skip previously planned stops at St. Petersburg. (The same is happening in Odessa, Ukraine, another port of call for cruise ships.)

Forecasts remain mixed, but many say it’s still too early to realize the full impact that the Russian invasion will pose on travel to Europe. Travel-booking app Hopper saw flight bookings from the United States to Europe soar from 15 percent to 21 percent from mid-January to mid-February. But after Russia’s invasion, that metric reverted to 15 percent, according to a report from Travel Weekly.

Elsewhere in Europe, travel remains popular. “We’re mostly monitoring European travel and so far, we still haven’t seen any difference in demand since the war’s outbreak,” says Deena Giancotti, vice president of sales and marketing at the bike tour company Duvine. 

“It usually starts with people calling and asking a lot of questions: if they can cancel, if we have any concerns, if we’ve seen anything … and we haven’t even gotten a lot of questions at this point,” she says.

The past two months have been record-breaking for the Somerville, Massachusetts-based Duvine. In January and February, Duvine nearly doubled its sales compared with those two months in 2019, according to Giancotti. Much of that interest from Duvine’s travelers is set on Western Europe, with Italy, France, Portugal, and Spain being the four top contenders. 

Travel companies, though, are beginning to recalculate. JetClub co-founder and CEO Vishal Hiremath predicted that this summer would be one of the busiest for flying. The Greensboro, North Carolina-based private aviation company projected flights to increase from 20 to 30 percent compared with last summer. 

The private jet segment has benefited from the pandemic, as wealthy travelers paid to avoid commercial airports. But Hiremath believes that forecasts may need to be adjusted at some point. “It’s a wait and watch at the moment and [we] hope it ends soon,” he says. “We will probably still see some increase provided the war doesn’t spill over to Western Europe. If that happens, flying will probably fall again precipitously.”

Some travelers are getting more wary. A recent survey from MMGY Global, a Overland Park, Kansas-based market research firm, shows that 47 percent of those polled will hold off pursuing any travel plans to Europe until they see how the Ukrainian crisis unfolds. Half of those surveyed also expressed concern about the potential of closed borders and delays or cancelations of flights, trains and cruises.

JayWay Travel, a boutique travel agency specializing in Central, Eastern and Southern European tours, is starting to feel the pinch–at least for certain countries. The New Rochelle, New York-based travel agency still saw strong demand at the start of the year for European travel, demand they haven’t seen since the company’s start in 2006. That’s according to Jared Reisman, a sales manager at JayWay, who says that demand grew even stronger in February across most of Europe. 

The invasion of Ukraine has not soured demand as strongly as Reisman thought it would. “We’re still seeing a strong interest in areas that aren’t bordering Ukraine, but we do see a bit more hesitancy in the last one to two weeks given the situation,” Reisman says. “Poland, for example, is one of our biggest countries that neighbors Ukraine that we offer tours to, and we’ve seen requests for that decline substantially.” 

The continuing uncertainty in the landscape has been a huge boost for travel insurers, according to Mike Fuller, the CEO of the Boston-based Italian train ticket seller ItaliaRail. Consumers want to protect their purchases and they’re willing to shell out a few extra bucks for some peace of mind. 

Fuller says that ItaliaRail is seeing a much higher percentage of refundable tickets than it has historically. That’s largely driven by the pandemic in his view, but that flexibility is growing in popularity and is even more applicable given current events. For now, he expects demand to hold steady. 

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