Europe has spent decades trying to attract more tourists. Now some of its most successful destinations are facing the opposite problem: they may not be able to accommodate many more.
Spain and Italy remain among the world’s most desirable holiday destinations, but the latest warning from TUI CEO Sebastian Ebel suggests that the tourism industry is entering a new phase. According to Ebel, Spain is close to being fully sold out, while parts of southern Europe are approaching their practical tourism capacity. That means future growth may increasingly come not from sending more visitors to the same famous destinations, but from redirecting travelers elsewhere.
The implications are much bigger than hotel availability.
Tourism capacity involves airports, roads, hotels, restaurants, water supplies, beaches, public transport, heritage sites, housing and local communities. Once those systems become saturated, adding another million visitors does not necessarily create more prosperity. It can instead produce congestion, higher prices, environmental damage and resentment among residents.
And that is precisely the challenge now facing parts of Spain and Italy.
Spain’s Tourism Success Is Creating a New Problem
Spain has become one of the world’s tourism superpowers.
The country welcomed a record 96.8 million international visitors in 2025, according to TUI’s tourism foundation, putting enormous economic value on travel while simultaneously increasing pressure in heavily visited areas.
Spain’s government expects approximately 43 million international tourists to visit during June through September 2026, around 6% more than during the same period in 2025. International visitor spending during those four months is projected at roughly €64 billion, about 10% higher year over year.
Those numbers sound like an unqualified success.
But they reveal the paradox.
More tourists do not automatically mean a better tourism industry.
If airports, hotels, roads, water systems and historic centers are already operating near their limits, additional demand can produce diminishing returns.
What Does “Tourism Capacity” Actually Mean?
Tourism capacity isn’t simply the number of hotel beds.
A destination can have thousands of empty rooms and still be unable to comfortably accommodate additional visitors.
Why?
Because tourism depends on an entire ecosystem.
Consider a Mediterranean island.
It needs enough:
- hotel rooms;
- airport capacity;
- flights;
- taxis;
- buses;
- restaurants;
- electricity;
- drinking water;
- sewage treatment;
- beaches;
- medical services;
- waste collection;
- workers;
- housing for employees.
If one component reaches its limit, the entire tourism system can become constrained.
This is why tourism capacity is better understood as the maximum number of visitors a destination can accommodate without seriously damaging infrastructure, the environment, local life or the visitor experience.
The Hotel Problem Is Only Part of the Story
When a destination becomes popular, the obvious response is to build more hotels.
But that solution has limits.
New hotels require:
- land;
- construction;
- water;
- energy;
- roads;
- workers;
- waste systems.
In heavily developed coastal regions, finding suitable land can be difficult.
Even when land exists, residents may oppose additional construction because of concerns about housing, traffic and environmental damage.
So simply saying “build more hotels” ignores the wider problem.
Spain Is Already Trying to Decentralize Tourism
Interestingly, Spain’s tourism strategy is moving in precisely this direction.
The Spanish government says spending growth in traditionally less-visited regions is expected to outpace growth in the country’s main tourism destinations during summer 2026. That reflects an effort to decentralize visitor flows rather than concentrating everyone in the same places.
This could become one of Europe’s most important tourism strategies.
Instead of asking:
How do we attract more people to Barcelona?
the better question may be:
How do we persuade some of those travelers to visit other parts of Spain?
The Spain Beyond Barcelona and Mallorca Opportunity
Spain has enormous tourism resources outside its best-known destinations.
Travelers can explore:
- Asturias;
- Galicia;
- Cantabria;
- Extremadura;
- Castilla y León;
- Aragón;
- inland Andalusia;
- rural Catalonia;
- smaller Mediterranean destinations.
These areas may benefit from visitors seeking alternatives to the most crowded destinations.
The challenge is connectivity.
A rural destination cannot simply be told to “welcome tourists” if reaching it requires three flights, a rental car and a prayer.
Infrastructure has to follow the tourism strategy.
Italy Faces a Similar Problem
Italy has an equally powerful tourism brand.
Rome, Venice, Florence, Milan, Naples, the Amalfi Coast and Tuscany attract enormous international demand.
But popularity creates its own problems.
Historic cities have physical limits.
You cannot simply expand the Colosseum.
You cannot widen every medieval street.
You cannot build another Venice next to Venice.
And you cannot indefinitely increase visitor numbers without changing the character of the places people came to see.
Venice Is the Ultimate Example
Venice demonstrates the contradiction perfectly.
The city depends heavily on tourism.
But too many visitors can overwhelm its:
- narrow streets;
- public transport;
- bridges;
- historic buildings;
- waste systems;
- residential neighborhoods.
The city has therefore experimented with visitor-management measures, including an admission fee for certain day visitors during high-demand periods.
The message is clear:
Tourism must increasingly be managed, not simply maximized.
Overtourism Is Becoming a Political Issue
The tourism debate is no longer limited to industry executives.
Residents in parts of southern Europe have protested against overcrowding, rising housing costs and the transformation of neighborhoods into short-term rental districts. Governments have responded with measures including tourism taxes and restrictions affecting cruise traffic and short-term rentals.
This represents an important shift.
For decades, tourism was often treated as inherently beneficial.
Now communities are asking:
At what point does tourism stop benefiting residents?
Tourism Can Raise Housing Costs
One of the most contentious issues is housing.
When apartments are converted into short-term tourist rentals, the supply of housing available to local residents can decline.
That can contribute to higher rents in already expensive markets.
The tourism industry argues that visitors generate jobs and economic activity.
Residents may respond that they cannot afford to live in the destinations where they work.
That tension is unlikely to disappear.
The Worker Problem
There is another capacity constraint that receives less attention:
tourism workers.
Hotels and restaurants need:
- cleaners;
- cooks;
- waiters;
- drivers;
- receptionists;
- tour guides;
- maintenance staff;
- security personnel.
If a destination attracts more tourists without increasing its workforce, service quality can deteriorate.
And if workers cannot afford housing near tourist centers, companies face even greater recruitment problems.
Tourism capacity is therefore partly a labor-market capacity problem.
Climate Change Is Adding Another Ceiling
Tourism capacity is becoming more complicated because climate change is affecting southern Europe.
Extreme heat can reduce the attractiveness of summer travel while increasing pressure on electricity and water systems.
Wildfires can disrupt entire regions.
Drought can create conflicts over water.
The European Union has explicitly identified climate change, water stress, biodiversity loss and pollution as risks associated with geographically concentrated tourism.
So the tourism industry faces a strange contradiction:
The destinations most famous for sunshine may increasingly struggle with too much heat.
Water Could Become One of the Biggest Tourism Constraints
Mediterranean tourism is highly water-intensive.
Hotels consume water through:
- showers;
- laundry;
- swimming pools;
- landscaping;
- restaurants;
- cleaning.
Millions of visitors arriving simultaneously can significantly increase demand.
At the same time, residents need water for drinking, agriculture and everyday life.
That creates a politically sensitive question:
Who gets priority when water becomes scarce?
Tourism Has an Infrastructure Problem
Tourism growth often happens faster than infrastructure expansion.
A destination may experience a rapid increase in visitors while:
- airports remain unchanged;
- roads become congested;
- sewage systems become overloaded;
- public transport becomes crowded;
- waste volumes increase.
This is why European policymakers increasingly emphasize infrastructure investment alongside tourism growth. The EU Council has specifically highlighted the need for better connectivity and stronger resilience across the tourism ecosystem.
Airports Are a Hidden Constraint
An airport can technically handle millions of passengers annually, but peak demand matters.
If enormous numbers of travelers arrive on the same summer weekends, airports can experience:
- long queues;
- baggage delays;
- runway congestion;
- air-traffic constraints;
- ground-transport bottlenecks.
Building a new airport isn’t always politically or environmentally feasible.
So airlines may eventually face capacity limits even when consumer demand remains strong.
Cruise Tourism Creates Another Challenge
Cruise ships can deliver thousands of visitors to a destination within hours.
That can be economically valuable.
But it can also create enormous short-term pressure.
A city might receive thousands of passengers who:
- use public transport;
- visit museums;
- occupy restaurants;
- create waste;
- crowd attractions;
and then leave without staying overnight.
That has fueled debates about whether cruise tourism provides enough economic value relative to its impact.
Short-Term Rentals Are Part of the Same Debate
Platforms offering short-term accommodation have transformed tourism.
They provide visitors with more choices.
But in highly popular cities, critics argue that excessive tourist accommodation can reduce long-term housing availability.
Governments across Europe are therefore experimenting with restrictions.
The underlying principle is increasingly clear:
A city needs to remain a place to live, not merely a place to visit.
TUI’s Business Model Makes the Warning Particularly Interesting
TUI is not simply an airline or hotel company.
The group operates across much of the tourism value chain, including:
- tour operations;
- airlines;
- hotels;
- cruises;
- travel agencies;
- destination experiences.
TUI itself describes its integrated model as spanning hotels, cruises, activities, travel distribution and holiday flights.
That gives its executives a broad view of consumer demand.
If the company sees capacity tightening in one destination, it can theoretically redirect aircraft, hotel inventory and marketing toward another.
That is exactly the flexibility Ebel is emphasizing.
Egypt Could Be a Major Beneficiary
One of the biggest potential winners from this shift is Egypt.
Ebel expects Egypt to continue growing as a tourism destination, partly because it still has room to expand capacity.
Egypt also has several advantages:
- major historical attractions;
- Red Sea resorts;
- large-scale hotel development;
- extensive coastline;
- relatively strong package-tour infrastructure.
For European travelers, Egypt can provide a Mediterranean-adjacent alternative with a different tourism proposition.
Turkey Is Also Fighting for Travelers
Turkey is another major competitor.
According to Ebel, Turkish hotels have reduced prices to attract more budget-conscious travelers, helping demand recover.
That creates an important competitive dynamic.
When Spain and Italy become expensive or difficult to book, travelers do not necessarily abandon their holidays.
They may simply move elsewhere.
Tourism demand is increasingly mobile and price-sensitive.
Travelers Have More Choices Than Ever
The modern traveler can compare destinations almost instantly.
If Mallorca costs €2,500:
Maybe Turkey costs €1,800.
If Rome is crowded:
Maybe Athens is more attractive.
If Spain is too hot:
Maybe northern Europe becomes appealing.
If European hotel prices rise:
Maybe Egypt becomes the better value.
This makes destination competitiveness extremely fluid.
Price Is Becoming a Bigger Factor
TUI’s Ebel says tourists are increasingly sensitive to prices, destinations and the type of vacation being offered.
That matters because tourism capacity constraints can push prices upward.
If hotel rooms are scarce, prices rise.
If flights are limited, airfares rise.
If restaurants are overloaded, costs can increase.
Eventually, a destination can price itself out of some segments of the market.
That Could Create a “Luxury Tourism” Effect
One possible outcome is that capacity-constrained destinations increasingly target higher-spending visitors rather than maximum visitor numbers.
Instead of:
More tourists.
The goal becomes:
Fewer tourists spending more.
This approach can reduce physical pressure while maintaining economic benefits.
But it creates another problem:
Who gets access to Europe’s cultural treasures?
If destinations become affordable only to wealthy travelers, tourism becomes less inclusive.
The Future May Be About Visitor Value, Not Visitor Volume
This could become the new tourism metric.
Instead of measuring success by:
“How many tourists visited?”
governments could ask:
- How much did visitors spend locally?
- How many local jobs were created?
- How long did visitors stay?
- How much pressure did they place on infrastructure?
- Did tourism improve residents’ quality of life?
- How much revenue went toward conservation?
That would produce a much more sophisticated tourism strategy.
Longer Stays Could Be Better Than More Arrivals
A destination might benefit more from one visitor staying seven nights than several visitors staying one night each.
Longer stays can spread economic benefits across:
- hotels;
- restaurants;
- attractions;
- transport;
- local businesses.
They may also reduce the constant churn associated with short visits.
This is particularly relevant for cruise tourism and day-trip tourism.
Europe Has a “Peak Season” Problem
Tourism is highly seasonal.
Millions of people want to travel at roughly the same time.
That creates enormous pressure in July and August.
But hotels, airports and restaurants sit underused during other months.
The solution is obvious in theory:
Spread demand throughout the year.
In practice, it is harder.
Schools have summer holidays.
Families have limited vacation windows.
Weather matters.
Businesses have seasonal operating patterns.
Still, Europe’s tourism industry increasingly sees season extension as an important opportunity.
Greece Is Already Experimenting With Season Extension
TUI’s work in Rhodes offers an example.
The company and local partners are developing initiatives aimed at extending the tourism season while supporting local value creation, biodiversity and environmental education.
That illustrates a broader principle:
The future of Mediterranean tourism may not be about squeezing more visitors into August.
It may be about attracting more visitors in April, May, October and November.
Rural Tourism Could Become a Major Growth Engine
If Barcelona, Venice and the Amalfi Coast are overcrowded, rural destinations have an opportunity.
Tourists increasingly want:
- authenticity;
- nature;
- food experiences;
- local culture;
- slower travel;
- outdoor activities.
That could redirect economic activity toward areas that traditionally receive fewer visitors.
But rural tourism must be developed carefully.
Otherwise, today’s quiet villages can become tomorrow’s overcrowded hotspots.
Technology Could Help Manage Crowds
Technology offers another potential solution.
Destinations could use real-time data to monitor:
- visitor numbers;
- traffic;
- public transport;
- attraction queues;
- hotel occupancy;
- weather;
- environmental conditions.
Tourists could then receive recommendations such as:
“The city center is currently at 95% capacity. Visit this nearby attraction instead.”
That sounds futuristic.
But the technology already exists.
The challenge is coordinating it across governments, businesses and tourism operators.
AI Could Transform Destination Management
Artificial intelligence could become particularly useful.
AI systems could forecast visitor demand and help tourism authorities predict:
- airport congestion;
- hotel demand;
- traffic;
- water consumption;
- crowd levels;
- staffing requirements.
For companies like TUI, AI could also help shift capacity between destinations as booking patterns change.
TUI itself has identified AI as a strategic opportunity in its broader transformation.
But Technology Cannot Solve Everything
No algorithm can create more water.
No app can widen a medieval street.
No AI system can manufacture affordable housing overnight.
Technology can optimize existing resources.
It cannot eliminate physical limits.
Eventually, destinations have to make difficult political decisions.
Governments Will Have to Decide What “Enough” Means
This is perhaps the hardest question.
How many tourists are enough?
There is no universal number.
One destination might comfortably handle 10 million annual visitors.
Another might struggle with 2 million.
Capacity depends on:
- geography;
- infrastructure;
- population;
- climate;
- housing;
- environmental sensitivity;
- tourism model.
The answer must therefore be local.
Residents Need a Seat at the Table
Tourism policy cannot be designed only by airlines, hotels and government ministries.
Residents experience the consequences every day.
They know:
- which roads are overcrowded;
- which neighborhoods are changing;
- where rents are rising;
- where water shortages occur;
- which attractions are overwhelmed.
Successful tourism policy must therefore involve local communities.
TUI’s own CEO has previously argued that local people should have a say in how much tourism their cities and regions want and what form it should take.
The “More Tourists Is Always Better” Philosophy Is Dead
That may be the most important lesson.
Tourism growth remains economically valuable.
But unlimited growth is physically impossible.
At some point, more tourists can reduce the quality of the destination for both visitors and residents.
The industry is therefore moving toward a more nuanced model:
growth where there is capacity, restraint where there isn’t.
What Happens Next?
TUI’s response is likely to be increased flexibility.
If Spain becomes difficult to expand, aircraft and marketing capacity can move toward:
- Egypt;
- Turkey;
- Greece;
- other Mediterranean destinations;
- long-haul markets.
Ebel also expects long-haul demand to regain momentum, particularly toward the Caribbean and East Asia.
This suggests that Europe’s tourism map could become more diversified.
The Global Tourism Race Is Changing
For decades, destinations competed primarily to attract visitors.
Now they are increasingly competing on something more complicated:
capacity, value and sustainability.
A destination with unlimited hotel rooms but terrible infrastructure isn’t necessarily attractive.
A destination with fewer visitors but excellent experiences may become more competitive.
Europe Doesn’t Need Fewer Tourists Everywhere
This point is important.
The problem isn’t tourism itself.
The problem is concentration.
Some European regions are overloaded while others desperately need visitors.
The EU has explicitly recognized this imbalance, describing the concentration of tourists as a source of pressure in some destinations while others experience “undertourism.”
The solution is therefore not to shut down European tourism.
It is to redistribute it.
The New European Tourism Model
The future could look something like this:
High-demand cities
More visitor controls and higher-value tourism.
Coastal destinations
More emphasis on water efficiency and climate resilience.
Rural regions
Investment in connectivity and tourism infrastructure.
Shoulder seasons
More marketing and events outside July and August.
Cruise ports
Better scheduling and visitor management.
Hotels
Greater emphasis on energy and water efficiency.
Tour operators
More flexible capacity allocation.
Travelers
More willingness to explore less-famous destinations.
That would be a very different tourism model from the one Europe built during the last several decades.
Final Thoughts
Spain and Italy aren’t running out of tourists.
They’re running out of space to absorb ever more tourists in the same places at the same time.
That distinction matters.
TUI CEO Sebastian Ebel’s warning that Spain is close to being fully sold out illustrates a structural shift in European travel. Demand remains strong, but the traditional destinations that built their economies around endless visitor growth may no longer be able to expand at the same pace.
The answer will not simply be building more hotels.
Europe will need better infrastructure, smarter visitor management, stronger public transport, more sustainable water use, expanded shoulder seasons and greater investment in destinations that have been overlooked.
For travelers, this could actually be good news.
Instead of spending a fortune fighting through crowds in Europe’s most famous cities, visitors may discover quieter regions, smaller towns and emerging destinations that offer richer experiences.
The tourism industry is entering an era in which the best destination may not be the one that can accommodate the most people, but the one that knows how many people it can accommodate well.
And that could fundamentally reshape where the world goes on holiday next.
5 Frequently Asked Questions
1. What does TUI mean by Spain and Italy reaching tourism capacity?
It means some popular destinations are approaching practical limits on how many visitors their hotels, airports, transport systems, attractions, infrastructure and local communities can comfortably support. TUI CEO Sebastian Ebel said Spain is “almost fully sold out,” making further growth difficult.
2. Does this mean Spain and Italy are going to stop accepting tourists?
No. There is no indication that either country is closing its tourism industry. The issue is managing additional growth, particularly in heavily visited locations. Governments and businesses are increasingly looking at ways to distribute visitors geographically and seasonally.
3. Which destinations could benefit if Spain and Italy become overcrowded?
TUI expects destinations such as Egypt and Turkey to benefit, while long-haul destinations including the Caribbean and East Asia could also regain momentum. Other Mediterranean and less-visited European destinations may benefit as travelers search for alternatives.
4. Why is overtourism becoming such a serious problem in Europe?
Tourism is geographically concentrated. Spain, France, Germany and Italy account for more than 60% of EU overnight stays, while visitor numbers are heavily concentrated in particular cities and regions. This can put pressure on housing, infrastructure, water resources, biodiversity and local communities.
5. What can Europe do to solve the tourism capacity problem?
The most effective approach is likely to combine destination diversification, shoulder-season travel, infrastructure investment, visitor management, sustainable water use, better public transport and stronger local participation in tourism decisions. The goal shouldn’t be simply to attract fewer tourists, but to distribute tourism more intelligently and ensure that visitor growth creates lasting benefits for local communities.
Sources The Wall Street Journal
