For the first time since the epidemic began, leisure and business flights worldwide have risen to levels not seen since 2019.
This is according to the third annual travel report of the MasterCard Economics Institute titled “Travel 2022: Trends & Transitions” published yesterday.
After analyzing 37 global markets, the report found that cross-border travel reached pre-epidemic levels by March – a significant milestone for the travel industry, which has been affected by domestic travel since 2020.
The flight is back
Global flight bookings for leisure travel in April rose 25% above pre-epidemic levels, the report said. This was driven by the number of short-haul and medium-haul flights, which was higher in April than in the same period in 2019, the report said.
Long-distance leisure flights were not far behind. An “unprecedented increase” in international flight bookings has brought these flights to the 2019 level “just shy” in less than three months, after the pre-epidemic level started at -75% this year, according to the report.
According to the MasterCard Economics Institute’s 2022 Travel Report, global spending on cruise, bus and passenger railways, like airlines, rose sharply earlier this year, with tourist car fares surpassing the 2019 level in March.
3 Alexed | E + | Getty Images
Business flyers, who have been following retired passengers for the entire epidemic, are also returning to the skies.
At the end of March, for the first time since the onset of the epidemic, business flight bookings exceeded the 2019 level, according to the report, the corporate “frequent flyer” marked an important milestone for airlines that rely on passengers.
The return of business travel has accelerated, as business flight bookings were about half of the pre-epidemic level earlier this year, according to the report.
Delay in Asia
Despite the slow return of air travel to Asia, the global upward momentum continues. Flights to Singapore, Malaysia and Indonesia have increased among Asia-Pacific flyers this year, although most of the top international travel destinations were outside the region.
“Among the top destinations visited by Asia-Pacific travelers in the first quarter of 2022, 50% were outside the region based on our data, with the United States at No. 1,” said David Mann, Asia-Pacific chief economist at the MasterCard Economics Institute in the Middle East and Africa.
“Despite the delayed recovery compared to the West,” said Mann, “travelers from Asia Pacific have expressed a strong desire to return to where liberalization has taken place.”
If flight bookings continue at their current pace, an estimated 1.5 billion more world passengers will fly this year than in 2021, with more than a third coming from Europe, according to the MasterCard Economics Institute.
Will this continue?
Some of the reasons for the strong demand for air travel and the growing trend of global hiring are the “reasons for optimism rather than pessimism” in the global travel industry.
People have repaid loans “at a record pace” over the past two years, while wealthy consumers – who are “more likely to travel in retirement” – have benefited from rising epidemic-related savings and asset prices, the report said.
Nevertheless, rising inflation, market volatility, geopolitical problems in Europe and Asia, and rising Covid-19 rates threaten to derail a strong travel recovery in 2022.
Inflation is expected to increase revenue, but it will accelerate in developing economies, the report said.
“While we expect revenue growth to surpass consumer price growth in Germany and the United States by mid-2023, it is unlikely to occur in Mexico and South Africa until 2024 and 2025, respectively,” the report said.
Air fares have also risen, with average ticket prices rising by about 18% from January to April this year, the report said.
The cost of air travel in the region varies significantly, with fares increasing by 27% in Singapore from April 2019 to April 2022. However, the report said that the prices of flights to the United States remained relatively unchanged during the same period.
Although many countries have reopened for international travelers, the epidemic still lingers on the industry.
“Among the myriad risks that could derail travel recovery … we will keep Covid as the biggest swing factor,” Mann said.
“While treatments are better, and many markets have seen successful vaccine rollouts, a serious or contagious variant that requires border closure could bring back the non-linear, stop-start recovery patterns of the past two years,” he said.
Hurray last summer?
It remains to be seen whether travel demand will remain strong throughout the year – or whether travelers will rush last summer before tightening their purse strings.
The report notes that people traditionally spend less on travel after increasing energy and food costs.
“However, given the widespread demand in the post-epidemic world, this time may be different,” the report said.