(05/06/23) New insights from the Mastercard Economics
Institute reveal that consumers are taking advantage of a more
traditional travel ecosystem in 2023, prioritizing leisure travel
and pioneering new corridors around the world.
Published last week, the Travel Industry Trends 2023
report delivers key insights about the global state of travel,
punctuated by shifting economic landscapes, persistent consumer
demands and the reopening of mainland China.
Key findings include:
• Leisure and
business travel are growing at the same pace. Driven by the
long-awaited lifting of travel restrictions in Asia, global
leisure travel remains robust, with flight bookings up roughly 31%
in March 2023 compared to the same month in 2019. In
the second half of 2022 into early 2023, corporate flight
bookings caught up to leisure flight bookings driven by those regions
with a strong return to office culture. Global leisure and
business travel are now growing at the same rate. The report
shows that demand for in person meetings, with the most significant growth in commercial travel and entertainment expenses being
led by Asia Pacific and Europe up 64% and 42%, respectively,
between January-March 2023.
Top 10 international travel destinations in March 2023
• Mainland China’s reopening
benefits global and particularly Asia Pacific tourism. China’s reopening
following tight COVID regulations comes at a time when it will
likely have a positive impact on the experience economy as
pent-up demand for travel is expected to drive strong tailwinds.
By March 2023, spending on experiences was notably 93% of
where it was in 2019 despite minimal travel last year. Economies
in the Asia Pacific region could be obvious beneficiaries of
China’s opening, given their strong ties to international
trade, tourism, and geographical proximity. Based on Mastercard
Economics Institute estimates, other countries that are
expected to benefit include northern Europe – particularly Germany and France –
and Brazil, which could see a boost in their exports to China as
the economy recovers.
• Travelers establish new corridors. As
consumers are enjoying higher incomes and returning to some
level of pre-pandemic comfort, they’re also starting to venture
further from home to new locations. For travelers from the
Asia Pacific region, the United States and Australia remain
favorite destinations for spring and summer journeys.
Beginning in late 2022, visitors to Hong Kong SAR started to
increase, with the destination edging its way into the top 10
list and soaring to #3 in February 2023. Luxury travel
experiences, such as splurging on high-end accommodation and
luxury travel in places like France and Italy, will likely
entice Chinese tourists emerging from a zero-COVID environment to
rejoin the experience economy.
• Tourists continue to
prioritize experiences. Preference for experiences over things
persists, and travelers are demonstrating new demand for the unique. Potentially influenced by social media and
entertainment, travelers are landing in lesser-known destinations
in search of cultural immersion. As of March 2023, global
spending on experiences was up 65% while spending on things is up
12% compared to 2019. Experience-oriented spending is surging
in certain corridors where pandemic lockdowns have expired,
but Chinese tourists who traditionally over-index on luxury retail
compared to other tourists could provide a boost to goods
spending across markets.
“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. “As people around the world prioritize
experiences over things, the strong demand for travel is
expected to last far beyond the initial ‘revenge travel’ bump. As
we look ahead to the peak summer travel season, the big
question is whether flight and accommodation supply can keep up
with demand.”
You can view the full Travel Industry Trends 2023
report
here.
