Since 2010 tourism has grown rapidly across Europe, facilitated primarily by growth in air transport. Significant further growth of air traffic is forecast, boosted by airport expansion and gaps in aviation taxation. The air transport industry claims to bring positive economic impacts from tourism, while downplaying any negatives such as those associated with overtourism.
Growth in the hospitality sector, fostered by international air tourist arrivals, creates jobs and profits but has failed to deliver either productivity improvements or real wage increases. Rather, it has delivered aggregate growth in returns to capital (particularly large businesses), land and property owners, at the expense of renters, local communities, and the environment.
Critically overlooked is the wider economic cost of the high property prices that result from mass air tourism. Higher rent prices can erode the welfare of low-income households, increasing their costs and trapping them in undesirable accommodation. Moreover, research shows that property prices can harm the productivity of other economic sectors and encourage misallocation of finite capital and labour into rent-seeking and low productivity sectors.
Both tourism-sending and -receiving regions appear to be accepting a high environmental and social cost in exchange for a limited, and unequally distributed, economic and social return.
