Something strange happened across Europe last year, and if you’re in the travel industry, you felt it in your wallet.
I’ve been watching tourism trends for years, and 2025 was different. Not the usual seasonal dips or minor fluctuations—this was a full-blown downturn that caught even the experts off guard. Countries that had been riding high on post-pandemic tourism booms suddenly found themselves with empty hotel rooms and quiet streets.
Let me walk you through what actually happened, because the official press releases don’t tell the whole story.
The Numbers Don’t Lie (And They’re Brutal)
Croatia got absolutely hammered. A jaw-dropping 16.7% collapse in foreign visitors during Q1 2025. We’re talking about Dubrovnik—the “Pearl of the Adriatic”—seeing noticeably fewer crowds. For anyone who visited in the 2010s when you could barely walk through the Old Town, this seemed impossible. But the data confirms it: one in six tourists who would’ve visited last year simply chose somewhere else.
Ireland’s situation is equally grim. A 9% drop in arrivals sounds bad enough, but here’s what really hurts: overnight stays plummeted by 23.1% in the first quarter. That’s not just fewer tourists—that’s tourists who do show up leaving faster. Tourism receipts fell 13.4%, meaning billions of euros that should’ve flowed through Dublin pubs, Galway B&Bs, and tour operators just… didn’t materialize.
Serbia, which had been quietly building momentum as an affordable cultural destination, saw its foreign arrivals drop 1.9%. That might sound small, but when you’re trying to establish yourself in a competitive market, any backward movement stings. Overnight stays fell 3%, totaling 12.28 million for the year—a clear sign that visitors aren’t just coming less often, they’re staying for shorter periods.
Even the Rich Countries Aren’t Immune
Here’s where it gets interesting: this isn’t just budget destinations struggling.
Switzerland—where a coffee costs more than a meal in most countries—saw tourism receipts decline 1.1%. The wealthy travelers who normally don’t think twice about $500-a-night hotels in Zermatt or luxury ski passes in St. Moritz are suddenly doing the math. Visitor numbers stayed relatively stable, but spending per person dropped noticeably.
Austria lost 1.4 million overnight stays in just Q1 2025. Vienna, Salzburg, the ski resorts—all feeling the squeeze. Cities that built their entire economic models around steady streams of tourists are now scrambling to adjust.
Sweden is watching visitors choose Denmark or Norway instead, drawn by slightly better value propositions. The country’s reliance on high-income tourists from neighboring nations has become a vulnerability in this new economic reality.
Even Romania—the budget darling of Eastern Europe—couldn’t escape unscathed, posting a 1% decline in foreign overnight stays. When even the affordable options are losing ground, you know something fundamental has shifted.
So What the Hell Happened?
Let’s cut through the corporate speak and talk about the real reasons people stopped coming:
1. Everything Got Expensive. Really Expensive.
Airfares didn’t just go up—they skyrocketed. A flight from New York to Dublin that might’ve cost $500 in 2023 was pushing $900-$1,200 in 2025. Hotels followed suit. That charming guesthouse in Split that used to be €70 a night? Now it’s €140. Meals, transportation, activities—all up significantly.
For most travelers, a European vacation went from “stretch but doable” to “maybe we should reconsider.”
2. The Global Economy Started Feeling Shaky
By early 2025, inflation was still biting hard across most developed economies. People were dealing with higher mortgage payments, increased grocery bills, and general economic uncertainty. When you’re worried about your job security or retirement savings, that two-week European adventure starts looking more like a luxury than a necessity.
3. Competition Intensified
Croatia used to be the affordable Mediterranean alternative to Italy or Greece. But now? Albania, Montenegro, and North Macedonia are offering similar coastal experiences at even lower prices. Austria faces competition from Hungary and Czech Republic. Ireland is competing with Scotland and Iceland for that “dramatic landscape” tourism.
Every country that relied on being “the cheap option” suddenly has three other countries undercutting them.
4. Travel Behavior Changed
This is subtle but important: people started taking shorter trips. The classic two-week European adventure is being replaced by long-weekend city breaks. That’s why overnight stays dropped more sharply than visitor numbers in many countries—people are still traveling, just not as long or as far.
There’s also a generational shift happening. Younger travelers (Gen Z and young millennials) are more selective, more budget-conscious, and more likely to choose off-the-beaten-path destinations promoted on TikTok over traditional European capitals.
The Real Impact on the Ground
Walk through Dubrovnik in summer 2025, and locals will tell you it’s the first time in years they could actually move freely through their own city. Small businesses that had expanded during the boom years found themselves overstaffed and underutilized.
In Ireland, hotel chains that invested heavily in new properties suddenly faced occupancy rates they hadn’t planned for. Tour operators who’d hired seasonal staff had to cut back. The ripple effects touched everything from car rentals to souvenir shops.
Even Switzerland’s luxury sector—which seemed recession-proof—started offering deals that would’ve been unthinkable two years ago.
What Happens Next?
Here’s the uncomfortable truth: some countries might not bounce back to their peak numbers for years, if ever.
The ones that will recover fastest are those willing to:
Embrace sustainable tourism rather than chasing maximum visitor numbers. Quality over quantity.
Offer genuine value instead of coasting on reputation. Switzerland charging premium prices is fine if the experience justifies it—but not if Croatia offers 80% of the experience at 40% of the cost.
Adapt to new traveler preferences. Eco-tourism, experiential travel, digital nomad-friendly infrastructure—these aren’t buzzwords anymore, they’re survival strategies.
Get creative with pricing. Dynamic pricing, off-season promotions, package deals that actually make sense—the old “take it or leave it” approach won’t work anymore.
Looking Ahead to 2026
As we’re already a month into 2026, early indicators suggest the trend hasn’t reversed. If anything, travelers are becoming even more selective about where and how they spend their money.
Countries like Serbia, Romania, and others in the Balkans actually have an opportunity here. If they can position themselves as offering authentic experiences at reasonable prices—and market it effectively—they could capture some of the travelers being priced out of traditional destinations.
But the Western European countries? They face a harder adjustment. When you’ve built your entire tourism infrastructure around premium pricing and high-spending visitors, pivoting to a more value-conscious market isn’t easy.
The Bottom Line
The European tourism slump of 2025 wasn’t a blip—it was a wake-up call. Rising costs, economic uncertainty, and changing traveler preferences created a perfect storm that caught most countries flat-footed.
Some destinations will adapt and thrive. Others will cling to the old model and continue hemorrhaging visitors. The next few years will separate the destinations that truly understand modern travelers from those still living in 2019.
For travelers, though? This could actually be good news. Less crowded destinations, better deals, and countries actually competing for your business rather than taking it for granted.
The golden age of “charge whatever you want, tourists will come anyway” is over. And honestly? That’s probably for the best.
Quick Reference: 2025 Tourism Decline by Country
| Country | Visitor Decline | Key Impact |
|---|---|---|
| Croatia | -16.7% | Steepest drop; major impact on coastal economy |
| Ireland | -9% arrivals, -23.1% overnight stays | Tourism receipts down 13.4% |
| Austria | -1.4M overnight stays (Q1) | Vienna particularly affected |
| Serbia | -1.9% arrivals, -3% overnight stays | Growth momentum reversed |
| Switzerland | -1.1% tourism receipts | Luxury sector spending declined |
| Sweden | Declining overnight stays | Competition from Denmark/Norway |
| Romania | -1% overnight stays | Budget advantage eroding |
