When Travel Will Be Back to Normal?
The question is posed when travel will return to normal. The economy is still recovering from the COVID-19 pandemic, but travel restrictions remain, prices are volatile, and people are nervous. Here are some things to keep in mind:
Global business travel activity is clawing its way back to normal after COVID-19 pandemic
A COVID-related pandemic is having a dramatic impact on business travel. According to Greg Hayes, CEO of jet engine manufacturer Raytheon Technologies Corp., 30 percent of commercial air traffic is corporate-related. Despite this fact, only half of business travel is mandatory. The global economy is increasingly connected and communication technologies have changed the way we think about productivity.
Before the pandemic, business travelers accounted for three-quarters of airline profits. But now, business travel accounts for just 12 percent of seat capacity and two-thirds of the revenue of hotels. As a result, virtual meetings could replace 27% of corporate travel by 2022. Even so, the economic impact of the COVID-19 pandemic will be felt for many years to come.
Though the CDC has cleared vaccinated individuals to travel within the United States, it is still cautious about international flights, as entry requirements are often unpredictable. Other factors that could slow corporate travel activity are employee and client discomfort with in-person interactions. And of course, higher airfares and hotel rates could slow down business travel. But while the CDC has stated that domestic travel is returning to normal, the long-term effect could be much more devastating.
Global tourism activity fell by nearly 75% in 2020
The global travel and tourism industry has experienced a decline of nearly 74 percent since the beginning of the decade. The decline is particularly pronounced in Asia and the Pacific, with arrivals in this region falling by nearly 300 million. The decline was even more dramatic in Africa and the Middle East, with arrivals falling by a combined 81 percent. The decline was exacerbated by the fact that domestic tourism was declining much faster than international travel. However, the rebound in 2021 has been slower than anticipated, with much of the growth being seen in the second half of the year.
The impact of the pandemic on tourism has disproportionately affected developing countries. Developing countries are expected to experience the greatest decline in 2020, with reductions of sixty to eighty percent. North East Asia, the Caribbean, and Western Europe will be least affected by the disease. A global economic impact analysis suggests that the emergence of a global flu pandemic will affect the tourism industry in all regions.
Global business travel activity plummeted 53.8% in 2020
The decline is expected to be the greatest in emerging markets, where business travel activity dropped by more than half in 2020, according to new IATA research. Emerging markets, which include countries like Russia, Ukraine, Turkey, and Romania, saw business travel decline by 48 percent in 2020, but are expected to rebound to $57.2 billion by 2024. The recovery will be particularly strong in emerging markets, which accounted for half of all global business travel in 2018.
The global health crisis affected the business travel industry, with COVID-19 alone causing losses of more than 700 billion U.S. dollars. While COVID-19 is a less severe pandemic, its effects still remain significant. In February 2022, one out of every ten employees worldwide did not take a business trip. As a result, business travel activity could recover to pre-pandemic levels by 2024.
China’s domestic air travel could start to recover this summer
The recovery of domestic air travel in China is expected to slow down following the summer holidays. In the immediate term, however, a return to normal flight operations should be possible. The country’s air regulator has indicated that international flights connecting Beijing and Shanghai are on track to resume this summer. While China has yet to ease COVID restrictions, the country is making strides to ensure that international air travel in the country is free from the virus.
After two years of restraining travel, the easing of the ban has spurred demand for domestic air travel, particularly during family visits and holidays. This may have resulted in pent-up demand, which could front-load travel demand this summer. But while consumers are likely to view the new freedom to travel as a temporary one, it may impede the recovery in the longer term.
