The European market potential for sun and beach tourism

Sun and beach tourism is the largest tourism segment in Europe, but has been struck a major blow by the COVID-19 pandemic. The expectation is that high-end remote beaches will be among the first destinations to recover. Although less than in other tourism sectors, travellers increasingly seek unique experiences, which they can enjoy in a sustainable manner. This is an opportunity for entrepreneurs in sustainable sun and beach tourism.

1. Product description

Sun and beach tourism refers to holidays taken for the purpose of staying in or near beaches. The most common activity for Europeans on a beach holiday is relaxing, which means they go sunbathing, swim, picnic and play on the beach. For many young people, beach holidays also includes partying and clubbing. Travellers enjoy beach tourism for the combination of scenic beauty with fresh air and recreational activities. Sun and Beach tourism is a niche market within the segment of nature tourism, wellness tourism or nautical tourism, depending on the focus of the tour operator. Examples of companies combining sun & beach tourism with other activities include:

• Turtle Bay In Kenya is a beach resort, but also offers whale watching and community events.
• Bo Phut Resort is located at a beach on a tropical island in Thailand and combines sun and beach with wellness, by focusing on dining, spa and massage treatments.
• Green Safaris is based in various countries in Africa and offers beach holidays to Lake Malawi. This company packages a small-scale sun & beach experience with safaris.
• Andaman Discoveries offers sustainable travel, combining beach holidays with nautical activities such as snorkelling, as well as with community based-tourism in Ban Talae Nok Village.

Occasionally, sun and beach tourism is combined with volunteer tourism, such as Responsible Travel (turtle egg protection), and Ankobra Beach Resort in Ghana, offering marine conservation, education and plastic recycling projects with the local community. Volunteer tourism however is often criticised for the lack of skill of volunteers to make any tangible contribution and for the fact that continuity is not always guaranteed, among other reasons.

Many rivers and lakes also offer opportunities for sun and beach tourists to relax, lie down and swim. Sandy shores are preferred, but other types of shores may do well too. Examples in this category are Hat Salung beach in Thailand, beaches near the Malawi Lake in Africa, and the beaches around Lake Titicaca in Bolivia and Peru. Because sun and beach tourism is the most popular tourism type, it may create over tourism, which may also affect the functioning of a coastal ecosystem, such as the flattening of dunes, elimination of natural vegetation, and draining and pollution of wetlands.

Figure 1: Beach resort near Lake Malawi

Source: Aardvark Safaris

This article provides an overview of sun and beach tourism, including sea, river and lake shore and coast tourism. We will discuss pure leisure sun and beach tourism, as well as sun and beach tourism combined with other nature and nautical activities. In this study, we will answer the questions why Europe is an interesting market, which countries offer the most potential and which trends offer opportunities.

2. What makes Europe an interesting market for sun and beach tourism?

Approximately 60% of all European tourists prefer to vacation along the seaside, which is high compared to the United States (43%), but low compared to China (68%). Out of this 60%, 29% prefer a beach holiday. This indicates that many European travellers enjoy the sea, but only as part of their trip. For Europeans, relaxation is also the most important reason to go on holiday, while for Americans it is to spend time with friends. When they go outside of Europe on holiday, most European tourists go to the beach in Asia. Thailand is a very popular destination for sun and beach European tourists.

The percentage of Europeans who prefer sun and beach holidays declined by 4% between 2014 and 2016. In 2019, it increased again by 2%. Due to COVID-19, the number of Europeans travelling outside of Europe decreased by 98% in June 2020 compared to June 2019. During the summer of 2020, the sun and beach travellers were concentrated in the domestic market, while the outbound market almost completely vanished.

Although there are many hybrids, we can distinguish two types of tourists in the sun and beach tourism market:

• Those mainly interested in all-inclusive packages,
• Those who require a more diversified offering.  

The first group is by far the largest target group. This group focuses on all-inclusive package deals and is highly focused on price. They mainly book trips to the Mediterranean region, with Turkey and Egypt as the most important developing country destinations. Their accommodations consist mostly of big hotels or resorts. Because the resort provides all they need, there is little need for these tourists to leave the resort. Therefore, such tourists offers little opportunity for small and medium-sized suppliers. Many in this target group are baby-boomers.

Although these packages attract many tourists, margins are low. Because most package-holidays only become cost-effective when they have a very high occupancy rate, they will suffer more from the COVID-19 pandemic in comparison to small-scale service providers.

The second group of tourists is more interested in a diversified offering. They will probably visit multiple places within your country, combining a safari, city-trips or other experiences with a nice time on the beach. Many of these tourists will also be interested in more than leisure when spending time on the beach.

This target group will either book via small specialised tour operators or customise their own trip (free independent travellers). Sometimes they may even book a package trip because it is the only way to visit a destination, but they will travel on their own when reaching their destination. Note that many of these tourists will make use of the infrastructure made available for the mass tourists.

Because this target group is more interested in visiting remote beaches and small-scale accommodations, the expectation is that this target group will recover much quicker from the COVID-19 pandemic. Although border restrictions are the main limitation for travel at the moment, having space will probably remain important in the coming years. Another opportunity is to gain market share due to the reduced demand for cheap package deals.

This target group will be mainly found in Western Europe. Generation Y and Generation Z are the most important generations if you focus on this target group.

An example of a company with a very diverse offering is Footsteps Ecolodge in Gambia. This company combines beach-activities, like fishing and boat trips, with other nature activities, like birding, and wellness activities like yoga. It does not offer all of these activities by itself, but also collaborates with other companies to broaden their offering. As an ecolodge, they make sustainable choices, which is one of the reasons they have a very loyal customer group.

3. Which European countries offer most opportunities in sun and beach tourism?

The number of people who prefer sun and beach holidays varies in each European country. The demand for sun and beach holidays is very strong among people in Eastern European countries like Slovenia, Croatia and Greece. The preference for beach holidays is the strongest in Italy, but this does not mean that Italy is the most important market. Because of their size, combined with a relatively high preference for sun and beach holidays, we see France, Germany and the United Kingdom as the most important markets.

France

In 2020, the French preference for sun & beach holidays, is one of the highest in Europe at 32%, far above the European average of 29%. Also, the French have the largest satisfaction after visiting a beach, compared to visitors from other countries. Just like other Western European tourists, many French tourists prefer to combine beach holidays with other activities.

Important developing country destinations for the French include Morocco, Tunisia and Turkey.

France has the third-largest population in the EU, with approximately 67 million people. It is also the EU’s third economy and the seventh largest economy in the world with a €2.4 trillion GDP.

For the French, natural features are the most mentioned reason to return to a previously visited destination. Almost 80% of the French tourists prepare their holidays online.

Germany

Germany offers a very large sun and beach market in Europe. At 37%, the German preference for sun & beach holidays is higher than the European average of 29%. In 2019, sun and beach tourism market in Germany increased by 3%, which is above the European average of 2%. According to Eurobarometer, 25% see the beach as their main reason for going on holiday. However, most beach holidays booked by Germans have a destination in the Mediterranean. On average, approximately 4% of German holiday budgets is spent on long-haul beach holidays. Within Germany, the people from Rhineland show the most interest in beach holidays.

In 2018, Germans made 10 million trips to developing countries.

Table 1: Long-haul destinations of German travellers in 2019

Source: Reiseanalyse, 2020

Germany’s population of 82 million is the largest in the EU. Germany is also the largest economy in the EU and fourth largest in the world, with a GDP of €3.5 trillion and a per capita annual income of €43 thousand.

You need to offer sufficient information to attract German and FITs. They tend to seek a lot of information before deciding to go visit a place. Like most Europeans, Germans are quite straightforward in their communication style, but they are also well known for their organisation and punctuality.

The United Kingdom

The British have a high preference for sun and beach destinations in developing countries, and a high preference for sun and beach tourism itself (27%). In 2020, at 32%, the British preference for sun & beach holidays was higher than the European average of 29%. Turkey with 1.6 million trips, Thailand and India, each with 1 million trips, are the most visited developing country destinations by British tourists, according to UNWTO data.

With a population of 66 million and a gross domestic product of €2.3 trillion, the United Kingdom is the fifth-largest economy in the world and the second in Europe. The UK’s GDP per capita is €38 thousand per year, suggesting the British have less disposable income for sun and beach holidays.

Italy

Italians have the highest preference for beach holidays. With a 50% preference for sun and beach holidays, they prefer this holiday type far above the average European. This means that the Italian market is highly willing to book sun & beach holiday trips. However, most Italian beach holidays will be domestic. With an average holiday budget of only €1,377, their budget is a little lower than that of Germany (€1,583) and France (€1,522).

Italy has a population of 60 million and a per capita annual income of €30 thousand. Italy is one of the European countries that has been struck most severely by the pandemic. The economy is expected to decline by 10.6% in 2020. In 2021, it the Italian economy is expected to recover, and predicted to grow by 5.2%. The Italians have a relatively strong preference for cultural activities, as according to IPSOS 34% sees this as an interesting activity during holidays. Italians have the tendency not to plan too far ahead, which will be even more the case during the COVID-19 pandemic.

Slovenia

Slovenia is one of Europe’s smallest markets with only 2 million people. Based on UNWTO data, it accounts for 100 thousand trips to developing countries yearly, which is equivalent to only 1% of the total trips to developing countries from Germany or the United Kingdom. However, if you have a limited marketing budget, entering a small market may be an advantage. In Slovenia in 2016, 52% of the tourists see beach tourism as their primary holiday type, the largest preference in Europe at that time. Unfortunately, more recent statistics are unavailable. The expectation is that Slovenians still have a very high preference for beach holidays.

One important factor to keep in mind is that 70% of all Slovenian travellers going to a developing country destination went to one of the top-7 such developing country destinations. This is also true in most Eastern European countries, where people will travel to a few, mostly nearby developing country destinations, which accountable for a large market share.

Table 3: Slovenian travellers’ top developing country destinations in 2017

Source: UNWTO, 2019

Ireland

An above-average percentage of 29% of the Irish see sun and beach as the most important reason to go on holiday. Therefore, the Irish have huge willingness to book a sun & beach holiday trip. Ireland has a population of only 4.9 million, making it one of the smallest European tourism markets. With a GDP per capita of almost €70 thousand, Ireland is a high-income country. Therefore, Ireland offers an interesting and sizeable market, which is especially interesting if you have a limited marketing budget.

A threat to this market is the UK leaving the EU (Brexit), which may highly impact the Irish economy.

The main language in Ireland is English. According to UNWTO 2017 data, Thailand (69 thousand trips), Turkey (50 thousand trips), China (42 thousand trips), India (38 thousand trips) and South Africa (34 thousand trips) were the most visited developing country destinations by Irish travellers.

4. What trends offer opportunities in the European sun and beach tourism market?

Unique experiences

Travellers are increasingly seeking unique experiences rather than just travelling to a destination and lying on the beach for a week. This is especially the case for Generation Y or millennial travellers. Although there is still a large market for mass sun and beach tourism, this market is changing, especially in Western Europe. Pure leisure tourism is in decline.

European tourists are eager to avoid crowds. Managers of large European tour operators we interviewed mentioned that they now offer more tours to more remote destinations, which means that these destinations won’t remain remote for long.

Sun and beach tourism more associated with other types of tourism

Travellers are increasingly looking for adventure, as well as experiences that enrich them during the holidays instead of just lying on the beach. While pure leisure all-inclusive packages still dominate the market, tourists are increasingly searching for adventure and new experiences. Community-based tourism can be one of these aspects. Other examples which you can combine with beach tourism are:

• Soft adventurous activities, like walking on the beach, sea canoeing and snorkelling.
• Athletic engagement, like running on the beach, swimming and surfing.
• Nautical activities, like sailing, diving and other water sports.
• Cultural activities, like visiting a coastal village.

Growing demand for sustainable holidays

Travellers are increasingly aware of and concerned with sustainability. When they choose a sun and beach holiday destination, it is increasingly influenced by ethics, moral values, concerns about the coastal environment and its ecosystems, including flora and animal protection and a desire to positively impact local communities. These travellers demand affordability and availability of environmentally friendly, sustainable and socially responsible tourism services and products. They want to reduce their holiday carbon footprint, but often want to improve the destination as well. That is why do good, feel good holidays and ecological tours are growing in popularity.

Among the reasons why European governments and travellers have been paying more attention to sustainability include climate change, plastic pollution, air and water pollution, land and water usage, dislocation of traditional societies, the negative impacts of over tourism on host communities, and international agreements, such as the Paris Agreement and the United Nations (UN) Sustainable Development Goals.

There are many ways to increase the sustainability of your offering. Some examples of becoming more sustainable are:

• Involve customers, for example, in beach clean-ups or ‘plogging’ (picking up litter while jogging). The Go Plog! Facebook site offers many examples in developing countries.
• Make your assortment more environmentally friendly and get certified to build trust with potential customers.
• Reduce the plastics used. For beach tourism suppliers, reducing plastic waste is becoming more and more important, because plastic waste near the coast has a higher chance of increasing the plastic soup in the oceans.

Some good sun and beach examples mentioned by UNWTO in their database of projects that contribute to the UN Sustainable Development Goals include:

• Chumbe Island Coral Park in Tanzania, which is a protected coral reef sanctuary and forest reserve including an eco-lodge. Tourism is used to fund the conservation costs for a financially and ecologically sustainable park.
• Mayakoba Tourism Development in Mexico, a tourism city built with the lowest possible impact on the environment. Most of the existing flora and fauna has been preserved, and new habitats for bird, fish and amphibians were created.

This study was carried out on behalf of CBI by Molgo and ETFI.

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