For the first time since the start of the pandemic, leisure and business flights around the world reached levels not seen since 2019.
That’s according to the Mastercard Economics Institute’s third annual travel report, “Travel 2022: Trends & Transitions,” released yesterday.
After analyzing 37 global markets, the report found cross-border travel reached pre-pandemic levels in March – a milestone for a travel industry dominated by domestic travel since 2020.
Global flight bookings for leisure travel soared 25% above pre-pandemic levels in April, the report said. This is explained by the number of short-haul and medium-haul flights, which were higher in April than in the same period in 2019, according to the report.
Long-haul leisure flights were not far behind. After starting the year at -75% of pre-pandemic levels, an “unprecedented increase” in international flight bookings brought these “just shy” flights back to 2019 levels in less than three months, the report says. .
Like airlines, global spending on cruises, buses and rail passengers rose sharply earlier this year, with passenger car rentals in March surpassing 2019 levels, according to Mastercard’s 2022 Travel Report Economics Institute.
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Business travelers, who have followed leisure passengers throughout the pandemic, are also returning to the skies.
At the end of March, business flight bookings surpassed 2019 levels for the first time since the start of the pandemic, the report said, marking a key milestone for airlines that rely on passengers from “frequent travelers” of companies.
The return of business travel has been swift, as corporate flight bookings were only around half of pre-pandemic levels earlier this year, the report said.
The global upward trajectory comes despite a slow return to air travel in Asia. Flights to Singapore, Malaysia and Indonesia have increased among Asia-Pacific travelers this year, although most major international travel destinations are outside the region.
“Of the top destinations visited by Asia-Pacific travelers in the first quarter of 2022, 50% were outside the region according to our data, with the United States being number 1,” said David Mann, Chief Economist. for Asia-Pacific, Middle East and Africa at the Mastercard Economics Institute.
“Despite a delayed recovery compared to the West,” Mann said, “Asia-Pacific travelers have shown a strong desire to return to travel where there have been liberalizations.”
If flight bookings continue at their current rate, an estimated 1.5 billion more global passengers will fly this year than in 2021, according to the Mastercard Economics Institute, more than a third of them from Europe.
Strong demand for air travel and picking up global hiring trends are just some of the reasons the global travel industry has “more reason to be optimistic than pessimistic”, according to the report. .
People have paid off their debts at “a record pace” over the past two years, while wealthier consumers – who are “more likely to travel for leisure” – have benefited from pandemic-related savings and the rising asset prices, according to the report.
Yet rising inflation, market instability, geopolitical issues in Europe and Asia, and rising Covid-19 rates threaten to derail a robust travel recovery in 2022.
Incomes are expected to rise in response to inflation, but it will happen faster in developing economies, the report said.
“While we expect income growth to outpace consumer price growth in Germany and the United States by mid-2023, this is unlikely to happen until 2024 and 2025 in Mexico and South Africa, respectively,” the report said.
Air fares are also on the rise, with the average ticket price increasing by around 18% from January to April this year, according to the report.
Increases in air travel costs varied widely by region, with fares up 27% in Singapore from April 2019 to April 2022. However, the report said US flight prices remained at almost unchanged over the same period.
Although many countries have reopened to international travellers, the pandemic still hangs over the industry.
“Among the many risks that could derail the resumption of travel … we would place Covid as the biggest swing factor,” Mann said.
“While treatments are better and many markets have seen successful vaccine deployments, a severe or contagious variant requiring border closures could lead to a return to the non-linear, stop-start recovery patterns of the past two years,” did he declare.
Whether travel demand will remain robust throughout the year remains to be seen – or whether travelers will take one last summer hurrah before tightening their purse strings.
The report notes that people have traditionally spent less on travel as a result of rising energy and food costs.
“However, given the massive levels of pent-up demand in a post-pandemic world, this time could be different,” the report said.