Tourism likely to recover sooner than expected

Almost six months into 2022, a sense of optimism has returned to the tourism sector, as travel demand finally shows signs of a significant uptick. According to the UNWTO's latest World Tourism Barometer, international tourism increased by 182 per cent in the first three months of 2022 compared to the previous year. While that's still 60 per cent below 2019 levels, the uptick in international arrivals gathered pace in March, pointing towards a strong second quarter leading into the summer holiday season.

The UNWTO now expects international tourist arrivals to reach 55 to 70 per cent of 2019 levels this year, which is equivalent to a 90 to 140 per cent improvement over 2021. While confidence is slowly building in the industry, there are some big ifs to consider. Not only could Covid make a comeback in the fall or whenever a more lethal variant emerges, but the war in Ukraine, inflation and global economic conditions could also stifle tourism's return.

International tourism continued its recovery from January 2022, with a much better performance compared to the weak start to 2021. However, the Russian invasion of Ukraine adds pressure to existing economic uncertainties, coupled with many Covid-related travel restrictions still in place. Overall confidence could be affected and hamper the recovery of tourism.

UNWTO has revised its outlook for 2022 due to stronger-than-expected results in the first quarter of 2022, a significant increase in flight reservations, and prospects from the UNWTO Confidence Index. International tourist arrivals are now expected to reach 55 per cent to 70 per cent of 2019 levels in 2022, depending on several circumstances including the rate at which destinations continue to lift travel restrictions, the evolution of the war in Ukraine, possible new outbreaks of coronavirus and global economic conditions, particularly inflation and energy prices.

Airports Council International (ACI) World has released its tenth quarterly assessment looking at the impact of the Covid-19 pandemic, its effects on airports, and the path to recovery.

More than two years after the World Health Organization (WHO) declared the Covid-19 outbreak a global pandemic, some 'normalcy' has begun to emerge thanks to a historic vaccination effort that saw, at the time of publication, more than 12 billion doses administered in 184 countries.

This unprecedented vaccination effort is now beginning to bear fruit despite some setbacks from the recent Omicron wave. Many countries have followed through on their plans to return to some normality, lifting many health measures, relaxing travel restrictions and reopening borders. The momentum created by the reopening had a positive and immediate impact on the recovery in global demand for air travel. The summer months of 2022 are expected to be exceptionally strong, with many noting that the summer of 2022 is actually 'three summers merged into one.'

As more pandemic restrictions were lifted, facilitating trade in goods and allowing the manufacturing and service sectors to grow, the performance of the global economy accelerated, especially in the final months of 2021. The International Monetary Fund (IMF) estimated the global growth of the economy in 2021 at 6.1 per cent. However, growth is expected to slow significantly in 2022 and 2023 as the recovery faces multiple obstacles, ranging from potential new variants, high crude oil prices, higher inflation, supply disruptions or geopolitical conflicts, and the humanitarian crisis.

According to the IMF, global growth is expected to moderate to 3.6 per cent in 2022 and 2023, down 0.8 and 0.2 percentage points from its January forecast. High levels of inflation are contributing significantly to this global slowdown. Energy and food prices have risen rapidly, disproportionately affecting low-income countries. In its April 2022 Economic Outlook, the IMF highlights that "multilateral efforts are essential to respond to the humanitarian crisis, prevent further economic fragmentation, maintain global liquidity, manage the debt overhang, address climate change, and end pandemic".

On the vaccine front, the pace of vaccination has continued to accelerate in core emerging markets in recent months, but many countries remain well below the commonly recognized threshold for herd immunity. Only 18 per cent of the population in low-income countries have received at least one dose of a vaccine, while 81 per cent of the population in high- and upper-middle-income countries have received at least one dose. Targeting countries with a low vaccination rate is especially important to prevent the risk of new waves and the formation of new variants.

The global travel industry is expected to make a full recovery by 2025, according to new research from Global Data. The study found that international departures will reach 68 per cent of their pre-Covid-19 levels globally in 2022 and are expected to improve to 82 per cent in 2023 and 97 per cent in 2024. By 2025, travel is expected to reach 101 per cent of 2019 levels with international departures projected to reach 1.5 billion.