Demographic decline and rising taxes put long-term pressure on Europe’s tourism industry
Nov 17, 2025
Europe’s travel industry must rapidly adapt to shrinking origin-market populations, rising taxes, and the needs of an ageing customer base. Industry leaders argue that demographic decline and growing cost pressures could significantly constrain future demand.
Key takeaways
- Shrinking customer base: Declining birth rates in high-income countries mean the pool of potential travellers is getting smaller.
- Rapid ageing: Travellers over 65 represent a growing market, but around 40% have some form of disability, requiring better accommodation and accessibility.
- Tax burden concerns: Significant increases in VAT and city taxes across Europe risk pushing prices beyond what travellers are willing to pay.
- Global price comparison: Markets like the US and Japan show strong inbound growth where pricing remains attractive.
- Risk of overloading the system: European travel is approaching a “Buckaroo moment” where additional taxes could push the sector beyond its limits.
- Local funding pressures: Cash-strapped municipalities are driving new tourism taxes, but industry leaders warn these measures may harm long-term competitiveness.
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