The future in focus

Explore the new trends and global movements shaping the future of international travel and tourism at Arabian Travel Market

In some parts of the world, international travellers are navigating the labyrinth of health regulations and border restrictions as they prepare to board their next flight. For many others, their upcoming trips are set to proceed as seamlessly as possible – for the first time in two years – with many countries around the world relaxing testing requirements and replacing the patchwork of restrictions with seamless digital solutions.

Industry experts believe that things are moving in the right direction, with these positive changes ushering in better days for the sector. Also signalling that the international travel and tourism industry is well on its way to recovery, the World Travel & Tourism Council (WTTC) revealed in its latest report that the sector’s contribution to the global economy could reach US$8.6 trillion this year, just 6.4 percent behind pre-pandemic levels.

As per the global tourism body, if the vaccine and booster roll-outs continue at pace this year and restrictions on international travel are further eased around the world, the sector could create 58 million jobs in 2022, to reach more than 330 million, just one percent below pre-pandemic levels and 21.5 percent above 2020.

In 2019, before the pandemic stopped travel in its tracks, the sector contributed nearly US$9.2 trillion to the global economy, generating 10.4 percent of the global GDP. However, in 2020, the crisis almost brought the sector to a complete standstill, causing a massive 49.1 percent drop, representing a severe loss of nearly US$4.5 trillion.

Now, a little over two years later, there’s a paradigm shift in making travel as seamless, secure and safe as possible, with new trends and global movements steering the sector forward.

“The outlook for international travel is positive,” said Scott Livermore, Chief Economist, Oxford Economics. “While we do not expect an immediate complete rebound, significant gains are expected in 2022 and 2023 as pent-up demand is realised.

“Once business travel recovery is fully underway, and once China and some other more cautious markets ease restrictions, we can expect to see travel volumes regain 2019 levels. This is currently expected worldwide in 2025 and by 2024 in the Middle East. The expected timeline for recovery has been deferred by the war in Ukraine but it has not been derailed.”

Although recovery is certain, experts agree that the way in which travellers will experience the world will not be the same, with new trends redefining the sector as we know it. Discussing the current landscape of the industry, Livermore stated: “Travel remains more skewed towards domestic and short-haul destinations as these are typically more familiar and perceived

The outlook for international travel is positive. While we do not expect an immediate rebound, significant gains are expected in 2022 and 2023 as pent-up demand is realised

to be safer as well as involving lower costs. In the short term, travellers will continue to favour short-haul travel and some quieter, more rural destinations, but these trends will fade over time as recovery becomes more entrenched.

“We still anticipate consumerled economic growth in the coming months and years as enforced savings accumulated during the pandemic are spent, which will support pent-up travel demand. However, rising commodity prices will add to inflationary pressures and will erode some savings and income growth to soften this impact.

“Leisure travel will lead recovery and continue to account for a larger share of activity in the coming years than before the pandemic.”

So what can travel industry businesses do to leverage these new trends and recover faster? Livermore answers: “Businesses should focus on short-haul source markets and those which have already eased travel restrictions for quick gains and to restore volumes.

“Flexibility in bookings and favourable cancellation policies should remain a key part of business plans owing to continued volatility in the outlook due to renewed COVID-19 outbreaks and the risk of restrictions. The war in Ukraine further adds to uncertainty and may affect traveller sentiment.”

He added: “Destinations and businesses need to pay greater attention to destination and visitor management rather than just marketing. Destination stewardship is important to balance the needs of visitors and residents who

Scott Livermore

have had a break from the positive and negative elements brought about by tourism, for example, overcrowding in some major destinations.”

Since the initial impact of COVID19 on travel was felt, it has always been clear that corporate travel would face a slower return to normalcy. But now, the sector, which took the biggest hit during the pandemic, is showing green shoots again. Although much remains to be seen, the successful vaccine roll-out has brought the industry some relief.

Livermore said: “Business travel will return, but a proportion of meetings will remain online and travel budgets will be squeezed. There are real benefits to in-person meetings, which are recognised by businesses, and 2019 levels will be regained over time, but in the near term, we expect to see fewer attendees at meetings per organisation and delegates.

“Large business events will return – and there have been some high-profile examples of successful events that have been held in the post-COVID-19 environment – but there will remain some caution in organising these in many destinations, given the required lead time and lingering uncertainty,” he added.

Industry experts believe that one silver lining to the pandemic is travellers’ heightened awareness of the environment and a renewed commitment to making choices that are better for the planet

“We expect to see a greater focus on sustainable and authentic experiences. These were emerging trends prior to the pandemic that are now coming to the fore,” explained Livermore. “Travellers are likely to take fewer leisure trips involving a flight per year, but of longer duration, in order to minimise carbon footprint. They are eager to once again experience different places and cultures and will increasingly seek authentic destinations.

“Travellers are also increasingly demanding sustainable travel products and experiences. Businesses and destinations with sustainable policies and practices are seeing the fastest gains and these things are essential to thrive. In this way, the pandemic has accelerated pre-existing trends, along with the desire for more authentic experiences,” concluded Livermore.