Market recovery by 2023?

Industry experts and travel companies have differing expectations on when the international tourism market will recover. Ian Youngman looks at two recent forecasts from Statista and the UN World Tourism Organization (UNWTO) and suggests forecasts must be treated with caution and regularly re-assessed in line with current developments.

Despite the crises of 2020 and 2021 with a global decline in arrivals, there is hope according to the forecasts of the Mobility Market Outlook released by the data and market research institute Statista.

Statista: New revenue records from 2023 onwards

According to Statista the global tourism revenue for 2021 is forecast to increase by over 50% compared to 2020. New revenue records can be expected from 2023 onwards; for 2025 the experts even predict a revenue growth of 23% versus the success year 2019.

Projections by Statista, using World Travel and Tourism Council, WorldData and OECD figures show that domestic tourism markets in Germany and other popular countries have not been impacted as severely as international tourism. In 2019 domestic tourism accounted for €259 billion, 85% of Germany’s domestic tourism revenues, whereas for 2020 the share is projected to be 91% (€173 billion).

Trends that are likely to take off in the tourism industry in the near future are becoming apparent. Statista forecasts that technological innovations will have a positive impact on the industry, e.g., AI-based, personalised services and innovative forms of presenting tourism services with virtual reality.

UNWTO: 2019 levels return in 2.5 to 4 years

Global tourism suffered its worst year on record in 2020, with international arrivals dropping by 74% according to the latest UNWTO World Tourism Barometer. Destinations worldwide welcomed 1 billion fewer international arrivals in 2020 than in the previous year, due to an unprecedented fall in demand and widespread travel restrictions. This compares with the 4% decline recorded during the 2009 global economic crisis.

According to the Barometer, Asia and the Pacific (-84%), the first region to suffer the impact of the pandemic and the one with the highest level of travel restrictions currently in place, recorded the largest decrease in arrivals in 2020 (300 million fewer). The Middle East and Africa both recorded a 75% decline.

Europe recorded a 70% decrease in arrivals, despite a small and short-lived revival in the summer of 2020. The region suffered the largest drop in absolute terms, with 500 million fewer international tourists in 2020. The Americas saw a 69% decrease in international arrivals.

Many countries are now reintroducing stricter travel restrictions. These include mandatory testing, quarantines and in some cases a complete closure of borders. The gradual rollout of COVID-19 vaccines is expected to help restore consumer confidence, contribute to the easing travel restrictions and slowly normalise travel during 2021.

While much has been made in making safe international travel a possibility, UNWTO says the crisis is far from over. The harmonisation, coordination and digitalisation of risk reduction measures, including testing, tracing and vaccination certificates, are essential foundations to promote safe travel and prepare for the recovery of tourism once conditions allow.

The latest UNWTO Panel of Experts survey shows a mixed outlook for 2021. 45% envisage better prospects for 2021, while 25% expect a similar performance and 30% foresee a worsening of results in 2021. 50% expect a rebound to occur in 2021 and 50% expect no rebound until 2022. There will be growing demand for domestic tourism and ‘slow travel’ experiences.

Looking further ahead, most experts do not to see a return to pre-pandemic levels happening before 2023. 43% point to 2023, while 41% expect a return to 2019 levels will only happen in 2024 or later. UNWTO’s extended scenarios for 2021-2024 indicate that it could take two-and-a-half to four years for international tourism to return to 2019 levels.