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2022 contrasted with massive demand and revenge travel against concerns about rising prices, rising inflation and a possible recession.
Wouter Geerts
This year has been a year of heightened optimism about the travel industry’s recovery and heightened pessimism about rising inflation, very high interest rates and the possibility of a recession. Here are some of the highs and lows of the past year in 11 charts created by the Skift Research team.
Many of these charts are taken from the free downloadable State of Travel 2022 report, which provides a comprehensive overview of the current state of the travel industry through over 175 charts.
near full recovery
Skift Research has tracked the travel industry performance of four major travel sectors (airlines, hotels, short-term rentals and car rentals) in 22 countries since the start of the pandemic, collating and analyzing data from 20 travel partners. I was.
While most regions have recovered to pre-pandemic demand levels in 2022, Asia-Pacific is the only real straggler, slowed by the tenacity of China’s zero Covid policy.
Taps from the world’s largest pre-pandemic sauce market remain closed for now. When will China reopen and people will travel to the same places and the same way as before Covid-19?
Worried about inflation and rising prices
Globally, inflation is eroding purchasing power and risks undermining a robust travel recovery.
Through 2022, travel prices are increasing at a very high rate. While this represents strong pricing power for the industry, it also risks alienating consumers.
Our survey of US consumers shows that high travel prices are likely to impact consumers heading into 2023. Few people cancel their trips outright, but many downgrade their spending to cheaper alternatives.
Company performance is improving but lagging behind
Unsurprisingly, listed travel stocks have lagged the broader market since the pandemic. The travel sector as a whole fell 54% in March 2020. Since those lows, the travel sector has actually performed in line with broader stock indices. However, the sector is still 30% below its pre-pandemic high.
The industry, especially suppliers such as airlines, airports and accommodation providers, will struggle to secure talent in 2022.
One travel sector that does not have the same staffing issues is the already lean online travel space. Bookings made through the largest online travel agencies Booking Holdings and Expedia Group are expected to return to pre-pandemic levels (see details here). Airlines.
Suppliers tend to do best in a stable and growing economic environment, while distributors are often the first to take advantage of disruptions, both financial and technological. Distributors, for example, online travel agencies, tend to react quickly to changes in the technology landscape in order to take early advantage of the long-term consumer shift to e-commerce. Also, during times of economic turmoil, recessions tend to make suppliers more willing to pay for the “bedridden” that third-party channels can provide.
Our assumption heading into the pandemic was that the pendulum would swing back in favor of third-party distributors in a moment of extreme turmoil in the travel industry, but this time brands are good at online marketing. , the discount was not an option. , and Google significantly disrupted online distribution. Let’s see what 2023 will bring.
Consumer demand continues to change
For now, as we emerge from the pandemic, some of the changes we are seeing in consumer demand and behavior remain strong.
A study by Skift Research found that while full remote work is on the decline, hybrid forms of home/office combinations are on the rise. The increased flexibility that comes with these new ways of working is having a major impact on the travel industry. People are taking longer and longer trips. Business travelers are increasingly including weekends in their trips when possible, and leisure travelers are taking their laptops and working days away from their destination.
Short-term rentals have also grown significantly in popularity, and finding remote and rural destinations to vacation in 2022 remained popular.
Finally, sustainable tourism has seen another boost during the pandemic. While the industry has spoken of the need for a more sustainable approach and consumer interest has grown steadily over the last few decades, there is now a real lack of sustainability awareness that the travel industry needs to address in the next few years. We see social change. come.
