Tourism set to return to pre-pandemic levels in some region in 2023; business travel still lags

18 January, 2023

After stronger than expected recovery in 2022, this year could see international tourism arrivals return to pre-pandemic levels in Europe and the Middle East, according to latest predictions from UNWTO.

However, the travellers of today and tomorrow will differ from those of the past it says, with tourists especially expected to increasingly seek value for money and travel closer to home in response to the challenging economic climate.

Business travel continues its slower recovery and it could be 2025 before levels similar to pre-pandemic are recorded on a global scale.

Based on UNWTO's forward-looking scenarios for 2023, global international tourist arrivals could reach 80% to 95% of pre-pandemic levels this year, depending on the extent of the economic slowdown, the ongoing recovery of travel in Asia and the Pacific and the evolution of the Russian offensive in Ukraine, among other factors.

All regions bouncing back

According to new data UNWTO, more than 900 million tourists travelled internationally in 2022 - double the number recorded in 2021 though still less than two-thirds (63%) of pre-pandemic levels. Every global region recorded notable increases in international tourist numbers.

The Middle East enjoyed the strongest relative increase as arrivals climbed to 83% of pre-pandemic numbers. Europe reached nearly 80% of pre-pandemic levels as it welcomed 585 million arrivals in 2022.

Africa and the Americas both recovered about 65% of their pre-pandemic visitors, while Asia and the Pacific reached only 23%, due to stronger pandemic-related restrictions which have started to be removed only in recent months.

The first UNWTO World Tourism Barometer of 2023 also analyses performance by region and looks at top performers in 2022, including several destinations which have already recovered beyond 2019 levels.

More reason for optimism for global tourism

The new year brings "more reason for optimism for global tourism," according to UNWTO secretary-general Zurab Pololikashvili. UNWTO anticipates a strong year for the sector even in the face of diverse challenges including the economic situation and continued geopolitical uncertainty.

Economic factors may influence how people travel in 2023 and UNWTO expects demand for domestic and regional travel to remain strong and help drive the sector's wider recovery.

Chinese tourists set to return

UNWTO foresees the recovery to continue throughout 2023 even as the sector faces up to economic, health and geopolitical challenges. The recent lifting of COVID-19 related travel restrictions in China, the world's largest outbound market in 2019, is a "significant step" for the recovery of the tourism sector in Asia and the Pacific and worldwide, it says.

In the short term, the resumption of travel from China is likely to benefit Asian destinations in particular, but IATA notes this will be shaped by the availability and cost of air travel, visa regulations and COVID-19 related restrictions in the destinations.

By mid-Jan-2023 a total of 32 countries had already imposed specific travel restrictions related to travel from China, mostly in Asia and Europe.

At the same time, strong demand from the United States, backed by a strong US dollar, will continue to benefit destinations in the region and beyond, says UNWTO, while Europe will continue to enjoy strong travel flows from the US, partly due to a weaker euro versus the US dollar.

Notable increases in international tourism receipts

Notable increases in international tourism receipts have been recorded across most destinations, in several cases higher than their growth in arrivals, according to UNWTO data.

This has been supported by the increase in average spending per trip due to longer periods of stay, the willingness by travellers to spend more in their destination and higher travel costs due to inflation, it says.

However, UNWTO says the economic situation could translate into tourists adopting a more cautious attitude in 2023, with reduced spending, shorter trips and travel closer to home.

Furthermore, continued uncertainty caused by the Russian aggression against Ukraine and other mounting geopolitical tensions, as well as health challenges related to COVID-19 also represent downside risks and "could weigh on tourism's recovery" in the months ahead, says UNWTO.

Cautious optimism for 1Q2023 and into 2Q2023

The latest UNWTO Confidence Index shows cautious optimism for the Jan-2023 to Apr-2023 period, higher than the same period in 2022. This optimism is backed by the opening up in Asia and strong spending numbers in 2022 from both traditional and emerging tourism source markets, with France, Germany and Italy as well as Qatar, India and Saudi Arabia all posting strong results, notes UNWTO.

Business travel recovery still lags

Leisure travel still surpasses business travel in the recovery and some airlines believe it may not be until 2025 that pre-pandemic levels are achieved. Many airlines are reporting positive corporate travel bookings and new spikes in levels but spending on business travel globally is expected to recover to around 80% of 2019 levels in 2023, up from 65% in 2022, according to the Global Business Travel Association (GBTA). That will be influenced partly by increased average air fares.

Booking activity by SMEs hit 80% of 2019 levels during the third quarter of 2022, 19 percentage points above multinational corporations, according to American Express Global Business Travel (Amex GBT).