The travel industry, which has experienced unprecedented turbulence over the past few years, has witnessed a significant shift, according to a new report released by the Mastercard Economics Institute. Titled “Travel Industry Trends 2023”, the comprehensive report delves into a post-pandemic landscape where consumers are veering towards a traditional travel ecosystem while nations like China emerge from their shells and leisure and business travel maintain a robust growth pattern.
Travel preferences are changing as global societies continue to shake off the aftermath of the COVID-19 pandemic. Consumers are now showing an increased penchant for experiences over material possessions and consistently showcasing an unyielding demand for leisure travel. The start of 2023 saw a leisure travel uptick, with business travel finding its groove in the latter half of 2022, buoyed by cultures heavily focused on a return-to-office strategy.
A critical element predicted to stimulate global growth is the re-opening of mainland China, offering a lifeline to economies, particularly within the Asia Pacific region. The turbulence created by a fluctuating global economy will likely be steadied by the rise of China’s newly re-opened market. Mastercard Economic Institute reports this through an in-depth analysis based on comprehensive data and estimates.
The findings reveal an intriguing growth pattern for both leisure and business travel. Global leisure travel has seen a substantial surge driven by the lifting of travel restrictions in Asia. Interestingly, flight bookings saw a roughly 31% rise in March 2023 compared to the same period in 2019. The trends imply an equal growth rate for both leisure and business travel, with demand for in-person meetings seeing a significant spike. Commercial travel and entertainment expenses are leading this growth, particularly in Asia Pacific and Europe, up by 64% and 42%, respectively, between January and March 2023.
China’s re-opening is expected to impact global positively and Asia Pacific tourism. As a nation that once held tight COVID regulations, the release of pent-up travel demand is anticipated to drive strong tailwinds. By March 2023, the report noted a rise in spending on experiences to 93% of 2019. Countries like Germany, France, and Brazil are likely beneficiaries, witnessing a boost in their exports to China as the economy recovers.
Meanwhile, new travel corridors are being established. As consumers enjoy higher income levels and a return to some level of pre-pandemic comfort, new destinations are coming into focus. For instance, the United States and Australia remain favourites for travellers from the Asia Pacific region. Meanwhile, destinations like Thailand and Hong Kong SAR are rising in popularity, ranking within the top 10 list of favourite destinations for Asia Pacific travellers.
The report also highlights that travellers are demonstrating new demand for the unique, seeking out lesser-known destinations for cultural immersion. By March 2023, global spending on experiences was up 65%, while spending on things increased by 12% compared to 2019. Thailand, specifically, emerged as a favourite, witnessing a 40.5% increase in spending on experiences and a 24% rise in things possessions compared to 2019.
“In 2023, travel came roaring back in Asia as China re-opened its borders and other markets eased the last of their pandemic-era travel restrictions,” said David Mann, Chief Economist for Asia at the Mastercard Economics Institute.
Mastercard is committed to aiding the global tourism sector’s recovery, providing an array of services from market analysis to high-frequency data insights that make sense of changing consumer trends.
For a deeper dive into these insights, the Travel Industry Trends 2023 report is available for full access. Other reports and insights from the Mastercard Economics Institute are accessible here.
Written by: Supaporn Pholrach (Joom)
