Leading hotel groups are expanding beyond Europe's crowded beach destinations into smaller towns and rural areas as tourist numbers surge. Dimitris Manikis, European head at Wyndham Hotels & Resorts, stated the company is "changing strategy" to focus on boutique hotels in second-tier and third-tier cities, driven by social media helping tourists discover new destinations. About 794mn international travellers visited Europe in 2025, accounting for more than half of global tourist arrivals, while the sector generates nearly 10% of the EU's GDP.

Spain, the world's second most-visited country, recorded 46.6mn international arrivals in the first half of 2026, up 4.6% year-on-year, with Italy seeing a 4.4% rise. Joe Stather, head of hotels research at JLL, noted tourists seek "destinations that are less internationally saturated," with momentum shifting to inland and northern Spain, mountain and rural Italy, and smaller islands. Elie Maalouf, CEO of Inter Continental Hotels Group, said tourism demand is "broadening out," with 2026 openings including properties in Valladolid, Spain, and Braga, Portugal.

However, overtourism backlash is growing, with 25,000 protesters attending a "Mallorca on the edge" demonstration in Palma over mass construction and affordability issues. Despite wildfire disruptions affecting over half a million hectares across the EU, US travellers continue arriving, with 23.3mn trips to Europe in 2025.