4 graphs show what the travel industry is like two years after Covid
After a year of heavy losses, the travel industry is finally showing some signs of recovery, although the advent of the omicron variant Covid-19 has caused some countries to tighten their borders again.
Rising vaccination rates, cumulative demand and cumulative savings helped boost global tourism demand until 2021, as nationwide blockades eased and countries pushed back border restrictions.
Here are four graphs showing what the travel industry is like two years after the Covid pandemic.
Travel recovery has remained uneven across regions, according to an analysis by research and travel news firm Skift.
Using an index of more than 50 different indicators, the analysis measured the recovery in different regions, compared to where the industry was in 2019 before the pandemic. These indicators include travel searches, as well as hotel occupancy rates, nightly income, and cancellations.
“What we’ve found is that there’s a very strong correlation between the number of new Covid cases and the recovery in travel,” said Wouter Geerts, Skift’s senior research analyst.
“As cases increase, borders tend to close, local blockades come into effect and travel sees a significant and almost immediate drop,” he said.
U.S. countries like the U.S. and Mexico have remained “more open,” and that 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 focus on countries imposing massive blockades, exhaustive tests and strict restrictions, even if only detect a few cases.
In recent weeks, several countries, including the United States, Canada, the United Kingdom and Singapore, have moved to restrict travel from South Africa after the World Health Organization labeled omicron, a strain of Covid-19 which was first discovered in South Africa, as a variant of concern.
Global Revenue Passenger (RPK) mileage is expected to increase this year, but only about 40% of pre-Covid levels, IATA said. RPK is an airline metric that shows the number of kilometers traveled by paying passengers.
Fitch Ratings lowered its overall RPK forecasts for 2021 and 2022, citing a slower-than-expected rise in international traffic and limited business travel. The agency warned that the operating conditions of the airlines will remain volatile with the advent of omicron.
“While it is too early to assess the effects of Omicron, additional waves of infections and policy responses could lead to travel restrictions and temporary or stagnant declines in traffic,” Fitch said in a November report.
But next year, North America could become the only region where airlines are profitable, IATA said.
The Middle East recovered more significantly, with hotel bookings from January to October 2021 just 13% below the same period in 2019, according to the data.
High vaccination rates that coincided with Europe’s peak travel seasons were one of the main factors contributing to the recovery in the Middle East, said Mike Tansey, director general of travel market growth at Accenture. Europe is a major source of visitors to the Middle East.
“Middle Eastern countries are close to the top of the league in terms of vaccination rates, making the region one of the fastest growing travel destinations,” he told CNBC. .
Travel forecast for 2022
Although the pandemic is not over, some in the travel industry are optimistic about a rise in tourism.
Governments have taken “very encouraging action” to revive travel, said Choo Pin Ang, general manager for Asia for the online travel portal Expedia. He cited examples from Thailand and Malaysia where steps have been taken to allow more travel.
“For 2022, the outlook is much more positive,” Choo told CNBC’s “Capital Connection” in October.
Researchers at travel site Booking.com surveyed more than 24,000 adults in August and asked about their travel intentions and priorities in 2022.
A major difference in the survey result compared to last year’s survey was related to remote work, Nuno Guerreiro, South Asia’s regional director for South Asia, told Booking.com.
Most travelers, about 59 percent, would opt for shorter vacations if that 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 face ongoing Covid outbreaks, Guerreiro said. But the key is that “travel is still critical to people’s lives,” he told CNBC.
– CNBC’s Yen Nee Lee contributed to this report.