Press Release

Booming air tourism could fuel European rent hikes of up to €250 a year

June 29, 2026

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Briefing

Economics of air transport in Europe

Examining fair distribution of costs & benefits from air transport for tourism

June 29, 2026

Southern Europe and Ireland hit hardest by air tourism-driven housing crisis, T&E study finds

Unchecked growth in tourism, facilitated by air traffic growth, is fueling an unaffordable housing crisis across Europe. Some of the most popular destinations like Spain, Portugal, Italy and Greece, have seen protests from residents in the high-season summer months, often due to the strain on affordable housing.

A new study by the New Economics Foundation (NEF), and commissioned by T&E, reveals that the average annual rents in five of Europe’s largest tourism-dependent economies are projected to rise by up to €250 per year over the next five years (2026-2031) as a consequence of incoming air tourism. These rises will primarily affect lower-income households, as income fails to keep pace with rental costs.

In absolute terms, Ireland is expected to see the largest rise, facing a rent increase of €250 per year. In relative terms, Greece, Portugal, and Spain are forecasted to see the largest increases, with rent price rises between €160 - €220. [1]

The study highlights that European regions facing the most intense local backlash against overtourism, such as the Balearic Islands, Crete, and Madeira, almost always register the highest volumes of foreign arrivals per resident, with the vast majority landing by air.

The aviation sector is responsible for an estimated 52% of the global tourism industry’s direct emissions and much of the sector’s emissions growth. In Europe, emissions from international tourist arrivals by air are projected to rise over 60% between 2016 and 2030.

Despite the growing concern over the impacts of tourism on local communities and the growing climate risks to the region, European governments continue to double down on aviation and tourism-driven growth. Spain has committed €12.9 billion toward airport investment, including the expansion of the Barcelona and Madrid airports. Athens is currently rolling out a €1.3 billion expansion to boost annual passenger capacity by 25%, while terminal expansions are actively underway in Lisbon.

“This study proves we cannot separate the anti-tourism protests on the ground from the surge of flights arriving overhead. Trying to manage tourism overcrowding while simultaneously expanding airports in Dublin, Barcelona, or Lisbon is a losing battle,” Denise Auclair, Head of T&E’s Travel Smart Campaign says. “If governments are serious about protecting affordable housing and meeting climate targets, they must put an immediate stop to airport expansions and reconsider strategies for tourism and transport connectivity”, she concludes.

Most economic impact assessment approaches in aviation fail to consider effects on property and rent prices, even where such consequences are at the very top of the political agenda.

According to the study, failing to recognise how much air traffic growth drives overtourism and its impacts on communities, will result in a narrow and inefficient government response.

Rising tourist influx fails to lift workers’ wages

The analysis also shows that the increase in air transport growth doesn't necessarily translate into better wages for workers. In fact, nations with the highest volumes of air tourist arrivals, like Italy, Spain and France have performed the worst when it comes to real-terms wages for tourism sector workers, leaving local hospitality workers with falling pay while facing rising living costs.

At the same time, large businesses are capturing a growing share of the money tourists spend on accommodation in Spain, France, Greece and Italy. Yet, local tourism workers aren’t seeing any benefits in their salaries.

“So often when airports expand, local communities are promised a wealth of economic benefits, but what we’re seeing in the data challenges this assumption. Jobs have been created, but the low wages they offer are poor compensation for rising housing costs, stretched infrastructure and increasing pollution,” Dr. Alex Chapman, Head of Economic Policy at the New Economics Foundation, said.

Dr. Chapman continued, “These impacts are also damaging to the wider economy. Our analysis shows that investment in non-tourism businesses falls as investors opt for property accumulation instead. This leaves workers trapped by their housing costs, unable to move to better work or invest in their skills.”

Furthermore, higher property prices can reduce business investment in the wider economy. The study suggests that over the 2019-2031 period, business investment can be expected to fall most sharply in Greece, Portugal, Spain and Italy. The largest losses in absolute terms hit Italy and Spain, which lose €1.1bn and €1.0bn in annual investment respectively. This happens as higher prices incentivise investors to direct capital towards property rather than towards productive and innovative sectors, such as transport equipment i.e. electric vehicles or trains, and information technologies.

With emissions from tourist flights arriving in Europe projected to continue to rise, T&E recommends that the upcoming EU Sustainable Tourism Strategy contain steps to:

Conduct a critical review of the impacts of international air tourism arrivals in Europe, considering effects in vital areas such as housing;
Reduce international air arrivals in regions approaching tourism saturation, including putting an end to plans for airport expansion;
Reconsider strategies for tourism and transport connectivity, such as prioritising low-carbon transport like rail and improving workers’ wages to support equitable value creation.

[1] As house and rent prices are sensitive to international tourism arrivals regardless of their mode of transport, the study isolates the air transport contribution.

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