It’s been all bad news about Europe for more than a year. The latest: Fitch Ratings labeled six eurozone countries (Belgium, Spain, Italy, Ireland, Cyprus, and Slovenia) as “rating watch negative,” meaning that the credit ratings of these countries are under active review and may be downgraded soon. Meanwhile the entire European Union is on the watchlist for downgrades at Standard and Poor’s.

There is good news coming out of one sector, though: tourism. The United Nations World Tourism Organization recently reported unexpected increases in international tourism to Europe in the first eight months of in 2011. In July, in fact, Europe marked the highest number of international tourist arrivals ever in a single month—118 million.

“Despite current volatility, international tourism is proving to be an important economic driver for many European economies, bringing much needed foreign exchange and helping to ease the pressure on their balance of payments,” said UNWTO Secretary-General Taleb Rifai in a release. “UNWTO encourages European governments to support tourism and consider the sector as one that can back economic recovery given its capacity to distribute wealth and create jobs across the region.” For 2012, overall international tourism growth is expected to be between 3 percent and 4 percent, slightly lower than in 2011, but still in positive territory.

Up in the Air
Meanwhile the eurozone crisis has caused the International Air Transport Association this month to announce revisions to its industry outlook. IATA has downgraded its forecast for airline profits in 2012 from $4.9 billion to $3.5 billion. “The Eurozone crisis puts severe downside risk on the 2012 outlook as illustrated by the recently published Organization for Economic Cooperation and Development economic outlook. In a worst-case scenario, should the eurozone crisis evolve into a full-blown banking crisis and European recession,” IATA stated in a release, “the global aviation industry could suffer losses exceeding $8 billion in 2012.”

Value Destination?
Europe’s troubles also point to potentially smaller increases in airfare and hotel room rates, according to the annual American Express Global Business Travel Forecast, released in late October. Specifically, the report predicts an increase of 0 to 4 percent in airfare for short-haul economy flights within the Europe, Middle East, and Africa (EMEA) region; between 2.5 percent and 5 percent for long-haul economy flights to EMEA; and slightly bigger increases in business-class airfare.

For corporate hotel rates in EMEA, the America Express forecast is for possible declines in Spain, Greece, and the other most economically challenged countries. Overall, expected rate increases are between .5 percent and 4.5 percent for mid-range EMEA properties, and between 1 percent and 5 percent for upper-range EMEA properties.