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Travel sector must be “clear-eyed” about future

Skift Research’s 2023 State of Travel report proclaims that domestic travel has fully recovered globally, yet international performance is tracking below 2019 levels as a result of persisting challenges.

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While numerous Asian countries were some of the top visitors to the US in 2019, none of them have recovered

Through a series of over 250 infographics, the research compiled by the media company presented data collected and analysed by its own team, as well as those from numerous validated third-party research sources.

“This State of Travel 2023 report is a positive report, but we want the industry to be clear-eyed about the persisting and upcoming challenges,” Skift proffered.

Last year was replete with “bumper performances” in some countries and sectors, with others experiencing a much slower rebound. However, problems with supply persist.

In the report, travel’s performance was analysed comprehensively and considered within the context of the global economy.

Domestic travel across the globe drove the recovery of the industry as a whole, and Skift’s data indicates that most countries are now on par with pre-pandemic levels. However, international travel has not yet made a full recovery, with performance tracking below 2019 levels.

Speaking with The PIE about 2023 trends in the tour sector, founder and CEO of Lingo Tours, Johan Schersten asserted that following the 2022 “bounce back” post-pandemic, 2023 offered increased “normality” for the travel industry.

“It would be fair to claim that 2022 was more ‘bouncy’ than a rebound, as it had some unpleasant surprises with failing aviation services and service providers that were often understaffed,” Schersten said.

However an increase in demand and suppliers’ reliability is ultimately reflected in “better experiences and happier travellers”, he suggested.

And while many travellers were keen to leave their masks and vaccination cards behind them post-pandemic, some pandemic-related behaviours have continued into 2023, according to Skift, such as the purchase of insurance, flexible bookings and flight booking windows.

In early 2023, the Middle East became the only region to experience a full recovery of international travel. In fact, several countries in the region became some of the fastest growing destinations for international arrivals, with UAE topping that list.

Skift terms the airline industry’s path to recovery “a work in progress”, with long-haul flights in particular down significantly.

According to the US National Travel and Tourism Office, while numerous Asian countries were some of the top visitors to the US in 2019, none of them have recovered.

“East Asian nations like Japan, China and South Korea have fallen dramatically. China saw the biggest decline with arrivals down 81% vs. pre-Covid levels,” NTTO states. However, with China being “the missing puzzle piece”, according to Skift, its reopening has sparked a global travel resurgence.

Skift compiled statements from CEOs of major airlines and accommodations companies, all of whom lauded the recovery in their sector, as well as in the industry as a whole.

“Our airline partners and suppliers continue to invest in young travellers”

Carlo Fabros, business development manager at Student Universe, lauded the commitment of industry leaders. “Our airline partners and suppliers continue to invest in young travellers as they see the long-term value they provide in our travel sector,” he told The PIE.

Globally, the accommodations sector has had a robust performance in 2023, particularly with alternative accommodations leading the recovery in Europe. The impact is similar in the LATAM region. Skift noted that “the accommodation sector has emerged as the star performer, overtaking 2019 levels by 30-32% in June 2023”.

Notably, the rebound has occurred despite the economic slowdown and fear of recession. Yet in an April 2023 survey conducted by Skift, rising inflation posed a risk to travel spending. In fact, when booking personal trips in the second quarter of 2023, 68% of respondents experienced higher travel prices versus in the same quarter of 2022.

And while only 8% said they deferred or cancelled their trip due to the increases, most respondents adjusted their plans, with the top three changes being spending less on food and activities, picking less expensive hotels and selecting less expensive flights.

The business sector has not fully recovered to pre-pandemic levels according to Deloitte’s 2023 corporate travel study. Experts predict that it may take until the end of 2024 or beyond for business travel to reach a full recovery.

Yet while nearly half of business travellers agree with this timeline, there are an equal number who believe business travel will never again reach pre-pandemic levels given the rise in video conferencing tools.

Many of the other significant consumer trends highlighted in the report revolved around the impact remote work has on travel. “As a result of greater flexibility around work, the blending of leisure and business travel has become more paramount,” according to Euromonitor.

India, US, UK, and Australia had the most “bleisure” travellers in the past year. Moreover, Euromonitor predicted that global spending by these travellers will more than double by 2027 versus 2021 figures.

While there has been a marked increase in luxury experiences with high carbon footprints, such as flying or sailing on private transportation, another competing trend that is emerging is a strengthened call for sustainability.

The World Travel and Tourism Council reported that of those it surveyed in 2023, 75% indicated a desire to choose sustainable travel in the future, 69% actively seek sustainable options and 59% have chosen some form of sustainable options in the past few years.

Skift noted that nearly half of its survey respondents paid extra for a more sustainable travel option in the past 12 months.

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