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Excellent Prospects for Global Tourism Suggest More Opportunities for International Business and IPMI

In this iPMI Global Insights article, iPMI report author Ian Youngman, wades through floods of information from the World Travel Market London.

Ian Youngman is a writer and researcher specialising in insurance. He writes regularly for a variety of magazines, newsletters, and on-line services. He publishes a range of market reports, and undertakes research for companies. To read his latest report, International Health Insurance 2023, please click here, or visit the REPORTS section of iPMI Global.

WTM Global Travel Report reveals opportunities and risks ahead for travel industry while discussions and other reports are also interesting.

Travel on the up

  • Rising travel and holiday costs have yet to dampen demand among consumers but higher prices have been identified as one of the key challenges the industry faces.
  • Despite the uncertain economic backdrop, the outlook is positive with many consumers demonstrating priority when it comes to spending on travel.
  • Economic growth in emerging markets and demographic and societal shifts remain areas of opportunity.
  • Global tourism continues to rebound strongly despite risks and challenges.
  • By the end of 2023, Tourism Economics predicts that global outbound trips will exceed 1.25 billion, 85% of the peak level achieved in 2019.
  • ‘Bleisure’ blended business and leisure travel – is a key business travel trend.
  • Economic challenges and global events will affect consumer confidence, and advances in technology, new consumer behaviour, and social and geo-political factors are among some of the risks and opportunities for tourism organisations across the world.
  • Travel has shown time and again how resilient it is.

Leisure travel

  • Consumers in advanced economises are prioritising leisure travel for their discretionary spend leading to a positive outlook for the global tourism industry.
  • The number of leisure trips taken in 2023 will be 10% lower than during 2019.
  • The value of these trips, in dollar terms, will be higher than 2019.
  • Pressure on fuel, staffing and finance costs for the aviation sector is one of the factors driving up prices.
  • Demand for leisure travel in 2024 will be robust.
  • One future driver will be the significant increase in the number of households in China, India and Indonesia able to afford international travel.
  • The travelling class in China is expected to double over the next 10 years.
  • China is back as a major global destination.
  • Destinations in line for a triple-digit increase in the value of their inbound leisure business over the next decade include Cuba (103% growth), Sweden (179%), Tunisia (105%), Jordan (104%) and Thailand (178%).

People want experiences

  • More holidaymakers are abandoning their sun loungers in favour of nature, foodie and wellness experiences.
  • There is increasing demand for unique, authentic and personalised experiences on vacation.
  • The climate crisis could mean fewer but potentially longer long-haul trips, and more local, short-haul trips.
  • Slow travel, which involves undertaking longer but potentially fewer trips, will become an increasingly popular trend.
  • Experience is the new luxury.

Turkey leads the way as Europe recovers

  • The value of inbound visitors to Europe has returned to pre-pandemic levels with domestic tourism in the region also back.
  • For 2023 inbound travel will be worth 19% more than 2019 when measured in dollar terms, although the number of visits has dropped by 3% from 440 million in 2019 to 428 million in 2023.
  • Europe – which for the purposes of this report includes the UK and Turkey – is the region with the highest volume and value of inbound visits.
  • Spain and France, the two largest inbound markets, are 33% and 31% up on 2019 respectively.
  • Turkey – the region’s third biggest market –has recorded a 73% hike on 2019.
  • Croatia, the region’s tenth biggest market, is highlighted as another standout performer with 2023 expected to come in 51% ahead of pre-pandemic levels.
  • Moving into 2024, Turkey’s continuing appeal as an inbound destination will see it become the second most valuable country in the region, leapfrogging France which drops to number 3 despite seeing year-on-year growth between 2023 and 2024.
  • Portugal will gain market share in 2024.
  • UK inbound leisure travel is flat in 2023 and will increase slowly in 2024.
  • For 2033 Spain, France and Turkey will continue their growth trajectory.

Domestic and inbound travel revive Middle East tourism

  • The strong performance from Saudi Arabia and United Arab Emirates is behind Middle East tourism recovery.
  • The number of leisure visitors to the region in 2023 is expected at 33 million, compared with 29 million in 2019. Measured in dollar terms there is a 46% increase in inbound spend compared with 2019.
  • The Middle East is also outperforming all other regions for
  • Saudi Arabia and the United Arab Emirates are investing heavily in tourism infrastructure, tourism development and marketing.
  • Inbound and domestic in both markets is fully recovered.

China

  • By 2033 Chinese outbound by value could be double that of the United States.
  • The value of outbound travel from China between 2024 and 2033 will be 131%, the largest increase for any major market.
  • The number of Chinese households earning enough to be able to afford to travel will double by 2033, with an additional 60m-plus households in the market.

USA rebound in 2024

  • Most major travel markets in the Americas have recovered apart from the USA that is due to get back to 2019 levels in 2024.
  • For 2023 the Americas is expected to welcome 117m inbound leisure visitors, 4% down on 2019.
  • The other major markets- Canada and Mexico- have had a very strong year.
  • By 2033 the USA inbound leisure market will remain the second largest in the world and be worth 82% more than 2024.
  • By 2033 outbound leisure travel from US is expected to grow in value by 35% in value.

Africa

  • Major destinations and source markets across Africa are expected to end 2023 ahead of in terms of value, with domestic tourism performing strongly.
  • For 2023 African international inbound leisure will be down in volumes but up in value compared with 2019.
  • This year 43 million people will visit Africa, a drop on the 49 million in 2019.
  • Market leader Egypt is slightly ahead, with 2023 at 101% of 2019 in value terms.
  • Morocco has made a strong recovery.
  • South Africa is the region’s third largest inbound market and the one taking longest to recover.
  • Next year will see the region build although South African inbound will continue to fall short of 2019.
  • By 2033, the report expects that the value of inbound leisure to South Africa will be 143% ahead of 2024.
  • Mozambique, Mali and Madagascar are high-growth markets.

Affordable luxury more popular

  • Affordable luxury is becoming more popular despite the squeeze on many holidaymakers’ budgets.
  • This growth area aligns with a broader trend for consumers to seek out new and unique experiences on holiday.

Business travel

  • 85% of business travel is through small to medium businesses.
  • There is an upturn in bleisure – people combining business and leisure, with one in four people now bringing a loved one with them as part of a trip in 2024, partly enabled by the rise in flexible working.

Africa

A separate report on travel and tourism in Africa by VFS Global for the World Travel & Tourism Council (WTTC) says:

  • Travel and tourism in Africa could boost the continent’s economy by US$168BN over the next 10 years.
  • The African sector is expected to grow by 6.5% a year.
  • But all this is subject to improving the air infrastructure, making visas easy and tourism marketing.

Summary

  • The travel trade tends to be optimistic so care has to be taken.
  • Bleisure means that business travel must include leisure tripos and family.
  • Major events such as war in the Middle East could dampen the predictions.
  • Travel is a good indicator or economic fortunes so when travel and tourism are booming, signs are also good for international; business and IPMI.
  • IPMI should also note the massive growth of the middle class in China, India and Indonesia- and coming up a similar trend in Africa and Latin America.
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