Tourism sector on track for full recovery this year

International tourism is well on its way to returning to pre-pandemic levels, with twice as many people travelling during the first quarter of 2023 than in the corresponding period of 2022.

The second UNWTO World Tourism Barometer of the year shows that the sector's swift recovery has continued into 2023. It shows that overall, international arrivals reached 80% of pre-pandemic levels in the first quarter of 2023. This fiscal the forecast is that the sector will reach $9.5TN, just 5% below 2019 pre-pandemic levels when travel was at its highest. Meanwhile, 34 countries have already surpassed the 2019 levels.

According to a research conducted by WTTC in collaboration with Oxford Economics, the global tourism body also forecasts that the sector will recover by up to 95% of the 2019 job level. An estimated 235 million tourists travelled internationally in the first three months, more than double the same period of 2022.

It evidences that tourism has continued to show its resilience. Revised data for 2022 shows over 960 million tourists travelling internationally last year, implying two-thirds (66%) of pre-pandemic numbers were recovered. Last year, despite the economic and geopolitical difficulties, the travel and tourism sector’s recovery continued at pace, growing 22% year-on-year to reach $7.7TN.

This recovery represented 7.6% of the global economy in 2022, the highest sector contribution since 2019. However, it’s global GDP is still 22.9% behind its 2019 peak. In 2021 the global sector grew 24.7% year-on-year, and last year it grew a further 22% to reach a GDP contribution of $7.7TN.

The research shows that the ongoing conflict in Ukraine and prolonged travel restrictions imposed by a number of countries like China has had a significant impact on the global recovery. But the recent decision by the Chinese government to reopen its borders will propel the sector and see it recover to pre-pandemic levels next year.

From a pre-pandemic high of more than 334MN, the Covid-19 pandemic ravaged employment in the sector which saw losses of more than 70MN to bring the total number employed in 2020 to just 264 mn.

Following the recovery of 11 mn jobs in 2021, the sector created 21.6 mn new jobs in 2022 to reach more than 295 mn globally – one in 11 jobs worldwide.

The Middle East saw the strongest performance, being the only region exceeding 2019 arrivals (+15%) and the first to regain pre-pandemic numbers in a full quarter. Europe reached 90% of pre-pandemic levels, driven by strong intra-regional demand, while Africa reached 88% and the Americas about 85% of 2019 levels

Asia and the Pacific accelerated its recovery with 54% of pre-pandemic levels. This upward trend is set to accelerate as most destinations, particularly China, have re-opened.

In many places, we are close to or even above pre-pandemic levels of arrivals.

Julia Simpson, WTTC President and CEO, said: “The travel & tourism sector continues to recover at pace, demonstrating the resilience of the sector and the enduring desire to travel. By the end of the year, the sector’s contribution will be within touching distance of the 2019 peak. We expect 2024 to exceed 2019. Travel and Tourism will be a growth sector over the next ten years.”

The Q1 2023 results are in line with UNWTO's forward-looking scenarios for the year, which project international arrivals to recover 80% to 95% of pre-pandemic levels. UNWTO's panel of experts expressed confidence of a strong peak season (May-August) in the Northern Hemisphere, reflected in the latest UNWTO Confidence Index, which indicates that the performance for the period is on track to outdo 2022 figures.

However, tourism's recovery also faces some challenges. According to the UNWTO panel of experts, the economic situation remains the main factor weighing on the effective recovery of international tourism in 2023, with high inflation and rising oil prices translating into higher transport and accommodations costs. As a result, tourists are expected to increasingly seek value for money. Uncertainty derived from the Russian aggression against Ukraine and other mounting geopolitical tensions also continue to represent downside risks.

The global tourism body is forecasting that the sector will grow its GDP contribution to $15.5TN by 2033 representing 11.6% of the global economy and will employ 430 mn people around the world, with almost 12% of the working population employed in the sector.

The latest EIR also reveals that 34 of the 185 countries analysed in the EIR have now recovered to pre-pandemic levels in terms of GDP contribution. WTTC forecasts that by the end of 2023, nearly half of the 185 countries will have either fully recovered to pre-pandemic levels or be within 95% of full recovery.