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Tourism outlook 2023
Around the world tourism experts opine that now is the best time to book your dream vacation because prices for flights to international destinations are beginning to climb up dramatically due to a spike in demand as more countries ease Covid restrictions. While you make up your mind about that lets consider how the travel and tourism sector is expected to play out in this new year.
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International tourism was expected to reach 65 per cent of pre-pandemic levels by the end of 2022, according to the United Nations World Tourism Organisation, with some areas recently reaching levels closer to 80 per cent or 90 per cent of their 2019 arrivals. And experts are cautiously optimistic about a continued travel rebound. Already, many travellers are charging full steam ahead into the new year as travel records in the very first days of 2023 show.
The EIU’s guide to tourism in 2023 provides a comprehensive view of the challenges, opportunities and trends to watch over the coming year.
On the whole, global tourism arrivals will increase by 30 per cent in 2023, following growth of 60 per cent in 2022, but will remain below pre-pandemic levels. The economic downturn, sanctions on Russia, and China’s zero-covid strategy will delay recovery. This follows growth of 60 per cent in 2022, but will still not be enough to take total arrivals to their 2019 level of 1.8bn. However, the trajectory will differ by region. Much of the Middle East, buoyed by high oil prices, has already seen a full recovery, while Eastern Europe will have to wait until 2025 because of the impact of the war in Ukraine. Other regions will range in between, with most reaching a full recovery in 2024
Inflation will not only affect travellers in 2023, but also the tourism sector. Hotels, bars and restaurants are grappling with high food and energy prices, while airlines are contending with high fuel bills. Airlines also face increasing wage pressures amid a chronic labour shortage. After laying off staff during the pandemic, many companies have struggled to rehire. This lack of staff has caused airport queues and caps on passenger numbers, as well as flight cancellations and lost luggage in the summer of 2022. The chief executive of Heathrow (UK) has warned that problems will last until the end of 2023.
For their part, the World Travel and Tourism Council (WTTC) said the global travel and tourism sectors were projected to return to pre-pandemic levels in 2023 and grow at a rate that would outpace global gross domestic product (GDP) growth.
The industry is expected to post an annual average growth rate of 5.8 per cent from 2022 to 2032 versus the 2.7 per cent increase in global GDP, and create 126 million new jobs, WTTC elaborated in a report released during the industry group's conference in Manila.
In 2019, tourism accounted for a 10th of global GDP and jobs but the coronavirus pandemic decimated the $9.6 trillion industry, halving its output value and leaving 62 million people jobless.
"The recovery is going to be so stellar that it's going to recover really powerfully. This does depend of course on China reopening," said WTTC President Julia Simpson, calling on all governments to reopen borders.
China's "zero COVID" policy and persistent lockdowns have disrupted global trade and domestic and international travel.
The travel and tourism industry's GDP is seen hitting $8.35 trillion this year and $9.6 trillion in 2023, a return to its pre-pandemic level.
Tourism jobs are projected to recover to 300 million this year and 324 million in 2023, close to the 333 million seen in 2019, WTTC said.
In Asia-Pacific alone, the hospitality industry's GDP will likely hit $3.4 trillion in 2023, already above the $3.3 trillion it saw in 2019, it said.
Compared with North America and Europe, travel has trailed in Asia-Pacific because of strict border restrictions in many countries. In Southeast Asia, travellers are now getting back on planes as the region's entry and COVID-19 quarantine rules are lifted. But a full recovery will be slow, industry members say.
To sum up, there would be issues with labour shortages, wage demands, and high food and energy prices. Even so, international airlines are expected to return to profitability, benefiting from a continued travel rebound. The impact of climate change on the industry will become more apparent, with high temperatures, water shortages and floods forcing tourism destinations to take action.