Global tourism data shows strong performance in 2023, but the industry will only fully recover to pre-pandemic levels in 2024. Receipts are expected to reach $9.5 trillion this year which are 5% short of its gross domestic product (GDP) contribution in 2019 indicates the Economic Impact Research of the World Travel & Tourism Council (WTTC). Julia Simpson, president and CEO of the council says that global recovery will happen next year and is forecast to exceed 2019 figures.
Remarkable Recovery
According to the Managing Director of Baker Tilly Turks and Caicos islands, the importance of travel/tourism was intensified during the pandemic. Data from the United Nations World Travel Organization (UNWTO) support the high demand post-Covid with international arrivals reaching 80% of 2019 levels during the first quarter which is more than double compared to the same period last year. The Middle East was a strong performer exceeding pre-pandemic arrivals by 15%. Europe also saw 90% of pre-pandemic figures powered by robust intra-regional demand. By sub-region and destination, sunny and island destinations in Southern Mediterranean Europe and North Africa performed well. Western and Northern Europe, Central America, and the Caribbean were close behind.
Zurab Pololikashvili UNTWO’ Secretary-General commented on the sector’s ‘unique ability to bounce.’ Indeed, it is incredible that a huge industry took such a big hit, came back stronger and at the same time, continuously reinvented itself. However, the industry must stay vigilant to challenges such as staffing shortages, geopolitical insecurity, and high cost of living crisis. At the same time, tourism must also fulfill its responsibilities to respond to climate emergency and inclusive development issues.
Main Challenges
The UNWTO Panel of Experts pinpoints the economic situation as the main factor with high inflation and rising prices leading to increased transport and accommodation costs. As a direct result, tourists want value for money and may travel closer to home. The good news is the sector can address these issues through various strategies. Expanding the range of accommodation to cater to different budgets will enable travelers to find options that suit their financial constraints. A report by Morning Consult supports that overall intent to travel is on an upward trajectory boosted by demand in South Korea and Western Europe. Hence, travelers still prefer cutting travel costs to ditching plans.
Another important point to remember is that the nature of travel and the type of experience that tourists want are different now. For example, younger travelers want to explore new and less crowded destinations that offer values that they can relate to such as the protection of the environment and sustainability. Booking habits have shifted as well with many opting for flexible bookings in cases of travel restrictions. Thus, airlines and other providers modify cancellation policies and the travel experience to capture a growing leisure market. For example, Emirates were always against offering premium economy. However, people weren’t willing to pay for business class tickets, but want more than flying economy. Several airlines are already doing this to enhance the aviation experience of tourists.
World travel may not recover fully this year but will likely bounce back to 2019 levels next year. Facing challenges and issues such as rising costs of fares and accommodation will help the sector rebound steadily. Flexibility and diversity in tickets and lodging as well as enhanced travel experience are strategies that can aid the process.
