Tourists on a ferry from Split to Brac Island on June 27, 2021, Croatia. Tourism is expected to pick up in Europe as Covid restrictions relax.

Elisabetta Zavoli / Getty Images

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European tourism is expected to pick up as countries ease restrictions following successful Covid-19 vaccination programs and falling infection rates.

While variants of Covid and weakening consumer confidence mean nothing is certain – the picturesque seaside village of Kokkari on the Greek island of Samos is exceptionally quiet for this time of year – the opportunities in Europe for investors are hotels, car rental companies and airport operators who boasted strong pre-pandemic business models and who have resisted Covid in good financial health.

The rebound will be the key to the economic health of some countries. Tourism represents almost 15% of the GDP in Spain and more than 20% in Greece. While tourism in southern Europe is expected to be higher this year than in 2020, it will still be 50-60% lower than 2019 levels, said Chris Hare, an economist at HSBC, who estimates that tourism this year could contribute one to two percent. indicates the GDP of southern European countries.

A better recovery story is in Northern Europe. Although not as popular as the south of France and Italy, the Nordic countries have suffered less from a decline in tourism. The latest Eurostat data show that the total number of nights spent in tourist accommodation in Denmark fell only 36% from April 2020 to March 2021 and by around 40% for Norway and Sweden.

A hidden gem is

Scandic Hotels Group

(ticker: SHOT.Sweden), which operates a network of 280 hotels in the Nordic region, Germany and the UK

German Bank

Predicts Scandic stock could reach SEK 40 ($ 4.70), up from SEK 35.38 recently on permanent rent cuts on rented properties and a rebound in hotel demand.

Morgan Stanley analyst Jamie Rollo estimates Scandic stock is reaching a multiple of 15.3 times expected earnings in 2023.

Scandic said in a June statement that, since April, “hotel demand has increased in all markets due to the gradual easing of restrictions related to the Covid-19 pandemic. Domestic leisure travel is increasing in all markets.

Another promising European travel payback game is based in Frankfurt


(FRA.Germany). Although it is active in 31 airports around the world, the bulk of its annual turnover comes from Europe. Its core business is Frankfurt airport, which represented 51.8% of the group’s sales in 2019. In 2020, Germany represented 73% of Fraport’s activity.

Frankfurt carried 70.6 million passengers in 2019 – which fell to 18.8 million in 2020 – and is a hub for 100 airlines. In a statement released in May, Fraport said that in the first three months of 2021, Frankfurt saw passenger traffic drop 77.6% year-on-year to just under 2.5 million. Compared to the first quarter of 2019, this is an even larger drop of 83.2%, so it is well positioned to take advantage of the rebound in travel.

There are other catalysts. Frankfurt Airport has consulted with airlines on increasing airport fees at Frankfurt Airport and will aim to reduce what were typically long queues in pre-pandemic security days with a new hall and additional aisles at Terminal 1.

CEO Stefan Schulte said in a June speech that Fraport had “taken advantage of the crisis to become considerably lighter, more efficient and therefore more competitive.”

Chu has a buy rating and a target price of 74 euros ($ 88.25). Fraport stock is up 19.1% this year to € 58.80, ahead of rival

Paris Airports

(ADP.France), which gains 4%.

Fraport said in the May statement that the group’s revenue is expected to reach around € 2 billion in 2021, up 19.7% from € 1.67 billion in 2020 but 46%. below 3.7 billion euros in 2019.