For the first time since the pandemic, air travel has returned to 2019 levels, and in some cases, travel has exceeded this year’s levels. This is according to the third annual travel report of the Mastercard Institute of Economics titled “Travel 2022: Trends and Transformations”which was published last week.
After analyzing 37 global markets, the report found that cross-border travel reached pre-pandemic levels in March – an important milestone for the travel industry that has been dominated by domestic travel since 2020.
The data show that a ‘Great recovery’ It’s in the works, says David Mann, chief economist for Asia Pacific, Middle East and Africa at the Mastercard Institute of Economics. “It’s just pure evidence of how strong pent-up demand really is.”
The flight is back
Global air travel bookings rose 25% above pre-pandemic levels in April, according to the report. It was driven by the number of short and medium-haul flights, which were higher in April compared to the same period in 2019, according to the report.
Leisure flights over long distances were not far behind. After starting the year at -75% of pre-pandemic levels, someone did “An unparalleled increase” In reservations for international flights these flights “close” to 2019 levels in less than three months, according to the report.
Business flyers, which have followed leisure travelers throughout the pandemic, are also back in the sky.
At the end of March, it exceeded business travel bookings in 2019 for the first time since the start of the pandemic, according to the report, marking an important milestone for the Airline who depends on corporate commuters with Frequent flyer.
The return of business trips has been rapid, with bookings for business trips at about half the levels before the pandemic earlier this year, according to the report.
delay in asia
The global upward trajectory comes despite the slow return to air travel in Asia. Flights to Singapore, Malaysia and Indonesia have increased among publications in Asia Pacific this year, although most major international destinations have been outside the region.
“Among the top destinations visited by travelers in Asia Pacific during the first quarter of 2022, 50% were outside the region based on our data, with the United States at number one,” in man.
“Despite a late recovery compared to the West”, He said, “Travelers in the Asia Pacific region have demonstrated a strong desire to return to travel as liberation has taken place.”
If flight bookings continue at their current pace, an estimated 1.5 billion passengers worldwide will travel more this year than 2021, according to the Mastercard Institute of Economics, with more than a third of them from Europe.
Will this continue?
Strong demand for air travel and rising global employment trends are just some of the reasons why the global travel industry has “More reason for optimism than pessimism”, According to the report.
People have paid off their debts in “standard rate” Over the past two years, while wealthier consumers – who are “likely to travel at their leisure” – have benefited from the savings associated with the pandemic and increased asset prices, according to the report.
However, rising inflation, market instability, geopolitical problems in Europe and Asia and high prices for Covid-19 threaten a strong rebound in travel in 2022.
Income is expected to grow in response to inflation, but this will happen faster in developing economies, according to the report.
While we expect revenue growth to outpace consumer price growth me Germany and the United States in the middle of 2023, this is unlikely to happen until 2024 and 2025 Mexico special to South Africa“, stated in the report.
Flight ticket prices skyrocketing
Air ticket prices have also been on the rise, with average fares up about 18% from January to April this year, according to the report. Increases in the cost of air travel varied widely between different regions, with prices increasing by 27% in Singapore from April 2019 to April 2022. However, the report says that airfares in the United States have been virtually unchanged over the same time frame.
But Mann said that for people eager to travel again, higher prices are not an immediate problem. Inflation and cost increases will only matter “After we released some pent-up demand pressure first.”
Consumers will eventually respond to higher travel prices, he said, “but it’s more of a story, we can tell, at the end of the year and in 2023.” And that’s only if high prices continue, he said.
Uncertainty about COVID
The main problem may be the uncertainty surrounding the pandemic, which continues to cast a shadow over the travel industry. “Among the many risks that can be traced from a journey recovery… we will position Covid as the biggest turning point,” in man.
“While treatments are better, and many markets have seen successful deployments of vaccines, an acute or infectious alternative that requires border closures may result in a recurrence of non-linear recovery patterns and discontinuation of initiation within the past two years,” he said. He said.
One last summer hurray?
It remains to be seen whether the demand for travel will remain strong year-round — or whether travelers will relish last summer’s joy before packing their bags. The report noted that people usually spend less on travel after rising energy and food costs. “But given the massive levels of pent-up demand in the post-pandemic world, this time may be different,” he said. said in the report.
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