Tourism is a major economic factor, contributing notably to the members of the European Union.

Visitor numbers are mostly back to pre-pandemic levels, and earnings from tourism provide a significant chunk of gross domestic product (GDP), pouring money into public coffers.

But not all is well in Europe’s tourism sector.

Crowded beaches and packed city centers: Another tourist summer season draws to a close across Europe.

While the tourism industry is rubbing its hands over ever-increasing visitor numbers and earnings, frustration is growing among residents in many visitor hot spots.

Understandably, who would like to live among crowds, noise and dirt – and at the same time be priced out of their neighborhood by holiday rentals?

Tourism contributions

Tourism is forecast to contribute nearly 1.9 trillion euros ($2.2 trillion) to the EU’s GDP this year, according to the World Travel and Tourism Council (WTTC), an industry group.

This accounts for about 10.5% of the bloc’s economy. The figure for 2024 was 1.8 trillion euros. And the sector is expected to grow further – to about 2.3 trillion euros of the EU’s GDP by 2035.

The European Commission says tourism represents 5.1% of the EU’s total gross value added – that is the total value of goods and services produced in an economy, before taxes and subsidies.

Tourism in Europe had bounced back from the COVID-19 pandemic by 2023. That year, EU residents spent 555 billion euros on tourism trips according to the bloc’s statistical office, Eurostat.

Some 65% of EU residents traveled for leisure at least once that year. Of them, 43% holidayed in their home country, while 57% took a trip abroad.

Tourism is also a major employer – Eurostat data says that in 2022, 2.4 million enterprises in the EU business economy belonged to tourism industries, employing 12.3 million people. According to other estimates, tourism supports up to 23 million jobs across the bloc.

Tourism’s economic impact is especially visible in southern and Mediterranean EU countries, where it can account for up to 18% of GDP (Croatia, 2023) and a significant share of employment.

In Greece, more than 20% of employment in the country’s business economy was in tourism in the last years.

One year after the Olympic Games, France has set itself the target of generating 100 billion euros in revenue from foreign tourists by 2030. To achieve this, the government plans to roll out a series of measures to boost sports tourism, business tourism and agritourism, as well as to simplify regulations.

The impact of tourism varies, both in participation and earnings: While in the Netherlands or France, more than 80% of the population participated in tourism in 2023, the figure in Romania was as low as 26.8%.

Spain leads

Spain is the EU’s top tourist destination, forming a key pillar of the Spanish economy.

Tourism accounted for 12.3% of the country’s GDP and 11.6% of employment in 2023, according to the National Statistics Institute. In 2024, international tourist arrivals rose by over 10%, surpassing 98 million visitors, who also spent 16% more than the previous year.

Spain outstripped everyone with 302 million overnight stays in 2023, according to Eurostat, followed by Italy (234 million), France (138 million), Greece (123 million) and Austria (91 million).

German and French tourists are the biggest holiday spenders, accounting for nearly half of all EU tourism expenditure, according to Eurostat.

Germans like to spend both at home and abroad despite the country’s economic slowdown, the country’s statistical office said. Polls indicate that Germans prefer to holiday domestically.

In 2024, Germany recorded a new peak in overnight stays with 496.1 million, a trend that continued in the first quarter of 2025.

According to estimates, there are more than 636,000 tourist accommodation establishments in the EU, providing 29.5 million beds. More than a third of beds are in Italy and France, while more than half of the establishments are in Croatia and Italy.

For the first quarter of 2025, Eurostat reported 452.4 million overnight stays in EU tourist accommodations. While, for example, Latvia and Malta reported an increase in overnight visitors of 18.5% and 17.2%, respectively, Ireland recorded a drop of 23.1%, continuing a trend observed the previous year.

“Influencing factors include cost for consumers as well as air access, in an uncertain macroeconomic environment,” Tourism Ireland said in February.

Some are lagging

Problems also arise when destinations are out of reach: Slovenia, where tourism accounts for 5% of GDP, suffers from poor international connectivity following the collapse of national air carrier Adria Airways in 2019.

The country has launched a new investment cycle, but is especially missing large international tourism companies.

Romania has not quite made it onto the foreign tourism map yet: It ranked second-to-last in terms of overnight stays by foreign tourists in the first quarter of 2025, with a rate of 20.1%, ahead only of Poland.

Some countries have not yet managed to close the pandemic gap: Bulgaria remains below pre-COVID-19 levels, despite an expected tourism increase of 5% to 7% in the first half of 2025, according to Tourism Minister Miroslav Borshosh. Experts expect an uptick after the country joins the eurozone in 2026.

Sustainability push

Brussels supports tourism with policy plans and a range of funding programs, guided by a 2022 report identifying 27 sets of measures for the green and digital transition. The aim is to improve the resilience of EU tourism, from tackling regulatory barriers to meeting demands for sustainable tourism.

Germany’s tourism association warned in 2023 already that to keep growing, the industry had to become “greener, more digital and more resistant to crises.”

The European Agenda for Tourism 2030, adopted in 2022 on the basis of the report, focuses on sustainability, digitalization, resilience and skills.

A public consultation launched in June aims to prepare for the commission’s upcoming sustainable tourism strategy.

“This means less overcrowding, more eco-friendly options, better digital services, and smoother cross-border trips,” a statement by the Commission read, while also pointing to challenges including climate change and “geopolitical tensions.”

A range of other programs provides more hands-on funding. Examples include Erasmus+, which supports the education of young people in tourism, as well as regional and agricultural funds that boost less developed and rural regions.

Schengen boost

Schengen was one of the biggest game-changers for tourism in Europe, making cross-border travel much easier.

The Schengen Area covers 29 countries (25 EU, 4 non-EU), enabling passport-free movement for over 450 million people. Visitors to the EU need just one Schengen visa to travel freely throughout the bloc.

Visa regime changes can also bring in tourists: A July decision to ease Schengen visa rules for Turkish citizens was loudly welcomed by the tourism industry in Türkiye and neighboring Bulgaria. Both sides believe the old visa rules were an obstacle to increasing tourist flows to Bulgaria.

Overcrowding, protests

Still, in recent years, there has been much backlash due to overcrowding and what is described as “overtourism.”

Overcrowding in popular destinations leads to congestion, environmental degradation and social tensions. Impacts include strains on infrastructure, rising living costs, displacement of residents and damage to heritage sites.

Residents in hot spots report a declining quality of life and a desire to reduce tourist numbers, especially during peak seasons. This leads to protests and sometimes even attacks on tourists, as observed this summer in Spain.

In recent months, cities like Barcelona and Palma de Mallorca have seen protests from residents who say the influx of tourists is driving up housing and service prices and is straining local communities.

In response, authorities in regions such as Catalonia, Andalucia, the Balearic Islands and the Canary Islands are introducing measures to mitigate the impact. These include tourist taxes, tighter regulations on short-term holiday rentals and restrictions on cruise ship arrivals.

The historic Dutch windmills and gabled wooden houses in the area of Zaanse Schans near Amsterdam are a must-see attraction. But the village has become “a national symbol of overtourism,” according to local authorities, who want to charge a hotly contested entrance fee from next year.

Areas such as the popular Athens neighborhood of Plaka are saturated by tourists, Mayor Haris Doukas said. Restaurants are encroaching on public space and rules banning hotels being dodged, while buildings are converted into short-term rentals, lawyer Dimitris Melissas said.

The conservative government has banned new apartment registrations on short-term rental platforms for at least a year in central Athens, where more than 12,000 seasonal lets existed in 2024, fuelling rent rises.

Greece also began charging a tax on island cruise ships in July, in an effort to curb tourist numbers.

Battling overtourism

Regions take different approaches to battle overtourism without killing the golden-egg-laying goose.

Non-EU-member Iceland reinvests tax levies directly into environmental protection. The Croatian city of Dubrovnik partners with the cruise line association to schedule berthing. In Belgium’s Flanders region, local communities are involved in tourism planning. Austrian ski resorts seek to diversify by promoting summer hiking holidays.

Regulatory tools are also on the table, including hefty tourism taxes and visitor caps. Venice made global headlines with its visitor access fee.

However, not all measures are equally effective. The WTTC argues in a July report that tourism taxes do not reduce visitor numbers and that the money is rarely reinvested in tourism management. The industry group also warns that curbing tourism could lead to high losses in income and jobs.