Is international travel back on the upswing?
This is an article ‘Is international travel back on the upswing?’ by Marc Pulisci
By the third quarter of the year, international travel continued to show a steady recovery, with arrivals reaching the 57% mark as compared to 2019 numbers in only the first seven months. Based on the most recent report issued by the United Nations World Trade Organization-World Tourism Barometer (UNWTO-WTB), overseas tourism nearly tripled for the first half of the month with a +172% increase year-on-year. With close to 60% of pre-pandemic normalcy, international flights and zero COVID-19 restrictions for nearly 90 countries this year are paving the way for more vibrant global travel that can only spell 'tourism recovery' in big block letters.
Globally, the industry lost a whopping $4.5 trillion in 2020 alone. Aside from decreased revenues, 62 million jobs associated with travel and tourism were lost during the height of the pandemic.
As the world begins to recover from the disruption this year, the industry seems to have the potential to recover with diverse outlooks, resilient strategies, and sustainable advocacy from national governments. However, there are more challenges to address than anyone had expected.
Despite the steady upswing in international travel numbers, the UNWTO is far from declaring the all-clear, citing several remaining challenges that border on geopolitical and economic matters. With this, countries might need to review their tourism strategies and align them with how they can impact travelers and the current trends.
From January to July 2022, records show that nearly 500 million tourists booked international flights to various destinations, which offers a 36% increase from last year's numbers for the same period. June and July alone reflect 44% of the total arrivals in the year as of the period, with Europe being the most traveled destination globally.
The highest recoveries
Aside from Europe, which registered a 190% increase from 2021 numbers as of July, the Middle East also showed steady tourism recovery with a quadruple rise of 287% during the same period and even a 3% jump from pre-pandemic levels.
Of the first seven months of the year, Europe also registered June and July as the biggest boost in international arrivals considering the summer season, closing on 2019 numbers by nearly 85%. Thanks to stronger intra-regional travel ties with the United States and more lenient travel restrictions, Europe's tourism is slowly inching its way to full recovery based on pre-pandemic levels.
As for the Middle East, the kingdom of Saudi Arabia and the Hajj pilgrimage attracted the most visitors in the first seven months of the year.
Elsewhere, Africa registered a 171% boost year-on-year for the same period to post a 60% recovery rate. At the same time, the Asia and the Pacific region doubled its numbers this year but not quite enough to get past the 86% recovery mark during pre-pandemic levels due to existing restrictions on non-essential travel for most countries in the region.
Big spending and confidence in travel
Another positive aspect of post-pandemic travel shows how outbound tourism expenditures have risen for major global markets. In France, travel expenses increased to an average of -12% compared to 2019 expenditures, while Germany posted a -14% for the same benchmark. Across the pond, the United States showed a robust -26% expenditure rate compared to pre-pandemic spending. In terms of international passenger air traffic, the first seven months of the year reflected a 234% jump compared to the previous year, according to the International Air Transport Association (IATA), which is around 70% of full recovery benchmarks.
Such numbers portray higher demand from travelers, which naturally entails a few operational and workforce adjustments for tourism entities and infrastructures such as airports. One of the most significant sectors affecting every economy is transportation. For most governments, it's equally crucial to consider the sector's role across the entire value chain. The Glasgow Declaration, for instance, which includes environmental commitments from destinations and businesses, was recently released by the UNWTO in collaboration with the One Planet Sustainable Tourism Programme. The aviation sector drives a significant push to cut emissions without undermining crucial tech advancements. Focusing on market changes and preventing the oversight of emerging nations and small islands that depend on international aviation traffic can efficiently balance spending and reduce negative impacts for struggling countries.
However, considering the disruption that the Russia-Ukraine war has manifested in currently rebounding international travel industries, there are still several significant risks that face the sector. These challenges border on interest rates in major destinations, the effect of global inflation on food and other expenditures, and of course, the looming global recession.
According to the UNWTO's Confidence Index, full industry recovery worldwide seems impossible to achieve even by the end of 2023, and economies might experience slower growth. At any rate, tourism experts remain enthusiastic about the reopening of international travel and the continued lifting of travel restrictions. The UNWTO panel surveyed even expressed 62% confidence in this year's May to August period showing a more buoyant outlook for the remainder of the year and onwards.
Still up in the air
Regarding industry labor and employment, North America and Europe show more dynamic labor deficits that trickle to Asian economies. Lesser seating capacities factor the region's recovery, and more employees can get furloughed due to canceled and limited flights. Continuing restrictions in Asia are also not helping streamline recovery, not to mention increases in fuel and operational costs.
Realistically, full recovery is far from anyone's sights though better numbers of up to a 65% increase year-on-year are expected to turn up by 2023, according to travel experts. The same experts also know that the current economic disruptions are the main factors that could spell the difference between a downside shift or a major stride toward the industry's full recovery by 2024.
Of course, travel companies and tourists still need to expect major adjustments in costs and savings for the better part of the next two years. Perhaps, focusing resources on domestic travel remains a logical alternative for struggling companies riddled with continuing travel and economic restrictions. With an average of 73% of total spending generated by domestic trips, governments can still realize resiliency while promoting local destinations to boost local tourism steadily.