ITB Trendcasts: Price Increases become a core Driver for Growth in Travel
In this episode, Charuta Fadnis, Senior Vice President Research of Phocuswright, first gives an insight into the current state of the global travel industry. She states that the overall trend is positive and the recovery of the global travel industry is becoming steady in Summer 2023. “2023 will be another good year, even if growth in some markets will again be moderate”, Fadnis continues. After the pandemic, the global travel market reopened at different times, making it temporarily difficult to measure success in annual growth rates. For cruises, Phocuswright counted a +500% increase in grosstravel in 2022, which is still a relative success after tremendous restrictions during the pandemic.
Speedy recovery after openings turn into a new normal
China is a good example for both late openings and speedy recovery in travel, just after the withdrawal of the mandatory quarantine for international travelers on 8 January this year. Shortly after that day, international travel spiked, states Lydia Li, Deputy General Manager of Messe Berlin Shanghai, who is currently preparing the re-opening of ITB China, the leading B2B travel trade show focused on the Chinese travel market that will be held from 12 September to 14 September in Shanghai.
China’s Dragon Boat Festival in June has already led to an all-time record number of domestic trips. “Domestic travel can become a mirror for international trips in China”, says Lydia Li, who is expecting significant growth both in inbound and outbound travel. Even if price increases and visa appointments hinder the revival, international travel is predicted to recover quickly and steadily. In China, there is a trend towards more individual and customized trips, provided and designed with the help of future technologies. This will be one of the hot topics at ITB China this year.
High growth in booking volumes, slower in pax
After a boom in 2022, the German travel market can expect a moderate growth in booking volume this year. Even if the travel revenue is increasing, the overall number of guests this summer appears to be slightly below that of 2022, says Andreas Wulfes, CEO of Neusta Data Intelligence, a data intelligence specialist that scansbooking data from GDS and other sources.
Prices increases do not stop bookings in Summer 2023
Both Phocuswright and Neusta Data Intelligence see inflation as the prime driver of gross bookings growth in 2023, and restrictions due to the pandemic have increased travel demand for vacations around the globe. Thosebucket lists are now being processed, says Charuta Fadnis. Even significant increases in travel prices do not seem to be an obstacle, even if a potential downturn may follow afterwards.
For Germany’s most popularair travel destinations around the Mediterranean, such as Spain, Greece and Turkey, Neusta Data Intelligence expects price increases of between 13% and 24 % year-on-year in summer 2023- still being a winner this year,while long-distance travel will develop unevenly this year.
It all depends on the timing of reopening
While Thailand and other countries are seeing a strong growth from Germany this summer, the Dominican Republic and other foreign destinations are losing market share, according to Neusta Data Intelligence. But as we've learned, growth depends on when a market has opened post-pandemic.
More facts and insights about the latest market data are available at ITB Travel Hero’s Trendcasts with Charuta Fadnis (Phocuswright), Andreas Wulfes (Neusta Data Intelligence) and Lydia Li (ITB China): ITB TRAVEL HERO PODCAST.