4 charts show what the travel industry looks like 2 years after Covid started
After a year of heavy losses, the travel industry is finally showing signs of a rebound – even as the emergence of the omicron variant of Covid-19 has led some countries to tighten their borders again.
Increased vaccination rates, pent-up demand and accumulated savings Helped boost global tourism demand through 2021 as nationwide lockdowns eased and countries rolled back border restrictions.
Here are four charts that show what the travel industry looks like two years after the start of the Covid pandemic.
Travel recovery has remained uneven across regions, according to an analysis by travel research and information company Skift.
Using an index of more than 50 different indicators, the analysis measured the recovery in different regions – relative to where the industry was in 2019 before the pandemic. These metrics include travel searches, as well as hotel occupancy rates, revenue per night, and cancellations.
âWhat we found is that there is a very strong correlation between the number of new cases of Covid and recovery from travel,â said Wouter Geerts, senior research analyst at Skift.
“When cases increase, borders tend to close, local blockades go into effect and travel experiences a significant and almost immediate drop,” he said.
North American countries such as the United States and Mexico have remained “more open” and this has helped their tourism industries, the analyst said. In contrast, ‘zero Covid’ strategies across Asia have suppressed travel until recently, Geerts said, referring to the approach where countries impose mass lockdowns, extensive testing and strict restrictions although only a few cases are detected.
In recent weeks, several countries, including the United States, Canada, the United Kingdom and Singapore, have decided to restrict travel from southern Africa after the World Health Organization labeled omicron – a strain Covid-19 which was first discovered in South Africa – a worrying variant.
Global revenue passenger-kilometers (RPKs) are expected to increase this year, but only to around 40% of pre-Covid levels, IATA said. The RPK is an airline industry metric that indicates the number of kilometers traveled by revenue passengers.
Fitch’s ratings have gone down its global RPK forecasts for 2021 and 2022, citing a slower-than-expected rebound in international traffic and limited business travel. The agency warned that airline operating conditions would remain volatile with the emergence of omicron.
“While it is too early to assess the effects of Omicron, further waves of infections and political responses could lead to blocked or temporary travel restrictions and traffic drops,” Fitch said in a report from November.
But next year, North America may become the only region where airlines become profitable, IATA said.
The Middle East recovered most significantly, with hotel bookings from January to October 2021 only 13% lower than the same period in 2019, data shows.
High vaccination rates coinciding with peak travel seasons in Europe have been a major contributor to the recovery in the Middle East, said Mike Tansey, managing director of growth markets travel at consulting firm Accenture . Europe is a major source of visitors to the Middle East.
“Countries in the Middle East are near the top of the league in terms of vaccination rates, making the region one of the fastest growing in travel,” he told CNBC.
While the pandemic is not over, some in the travel industry are optimistic about a rebound in tourism.
Governments have taken “very encouraging steps” to revive travel, said Choo Pin Ang, managing director for Asia of the online travel portal Expedia. He cited the examples of Thailand and Malaysia where measures have been taken to allow more travel.
“For 2022, the outlook is much more positive,” Choo told CNBC “Capital Connection” in October.
Researchers on the travel site Booking.com surveyed more than 24,000 adults in August and asked them what their travel intentions and priorities were in 2022.
One of the main differences in the survey results compared to last year’s survey was related to remote working, said Nuno Guerreiro, regional director for South Pacific Asia at Booking.com. .
Most travelers – around 59% – would opt for shorter vacations if it means they can completely disconnect from work instead of working remotely while on vacation, he said.
The travel industry remains under “significant pressure” as countries grapple with ongoing Covid epidemics, Guerreiro said. But the main takeaway is that “travel is still fundamental in people’s lives,” he told CNBC.
– CNBC’s Yen Nee Lee contributed to this report.