August 8, 2022

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Summer tourism brightens eurozone economy but cost of living crisis casts shadow

2 min read

Perched on a cliff on the Amalfi Coast, overlooking the azure waters of the Mediterranean, the Hotel San Pietro Positano is having its best year as pandemic-weary travellers, especially Americans, flock to Italy.

The hotel, charging an average rate of €1,800 per night for a room this summer, noticed a pick-up in April and is fully booked until mid-October. “For two years, nobody was able to come,” co-owner Vito Cinque said. “Now everybody does.” 

The eurozone’s tourism boom, aided by the single currency’s fall against the dollar, is one bright spot in a region that economists are increasingly concerned will fall into recession over the second half of this year.

Figures out on Friday showed the currency area’s economy grew by 0.7 per cent between the first and second quarters, a stronger result than the 0.1 per cent economists had forecast and a sharp contrast with US gross domestic product figures for the same period, which showed the world’s largest economy shrank for the second quarter in a row.

France, Italy and Spain all posted better than expected numbers as visitors flocking to Mediterranean destinations and enjoying city breaks helped offset the impact of surging energy bills and higher food prices on domestic demand.

Mohamed Ichem, who sells macarons at Ladurée near Paris’s Tuileries gardens, said most of his customers are English-speaking. “Tourists spend without counting,” said Ichem. “My biggest order was eight boxes of 54, for over €1,000.”

Adama Touré, who manages Le Castiglione — a brasserie minutes away from the Ritz hotel in the French capital’s chic Place Vendôme, said: “Americans are enjoying themselves in every way . . . I just served a plate of caviar to a group of them.”

Ignacio de la Torre, chief economist at asset manager Arcano, calculated that about a third of Spain’s second-quarter growth — which came in at 1.1 per cent, against just 0.2 per cent in the first three months of the…

2022-07-31 09:26:49

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