While global tourism arrivals will rise by 30% in 2023 – following 60% growth in 2022 – they will still not return to pre-pandemic levels.
This is according to The Economist’s Economic Intelligence Unit (EIU) report, ‘Tourism Outlook 2023’ which highlights that there are many headwinds facing tourism recovery in 2023.
Last year the EIU forecasted that global tourism would recover to near pre-pandemic levels by the end of 2023, as fear of COVID-19 receded and restrictions were lifted.
However, Russia’s invasion of Ukraine in February 2022 and the accompanying political instability, global inflation and economic slowdown – as well as China’s strict zero-COVID strategy – have dampened those expectations.
A spokesperson for the EIU said: “We have now pushed our forecast for a tourism recovery firmly into 2024, with considerable turbulence likely in the interim. Even so, the depth of the tourism slump in 2020-21 means that strong growth is inevitable in 2023 now that travel restrictions have been lifted in most countries.”
Globally, the EIU expects pent-up demand for travel to drive growth of 30% in international tourism arrivals, taking them to 1.6bn. This follows growth of 60% in 2022 but will still not be enough to take total arrivals to their 2019 level of 1.8bn.
However, the trajectory will differ by region. Much of the Middle East, buoyed by high oil prices, has already seen a full recovery, while Eastern Europe will have to wait until 2025 because of the impact of the war in Ukraine. Other regions will range in between, with most reaching a full recovery in 2024.
Chinese travellers largely absent
As for key source markets, Chinese travellers will remain largely absent, highlights the EIU report. While the war in Ukraine has delayed the tourism recovery, an even bigger factor has been China’s zero-COVID policy.
China accounted for around one-tenth of the world’s tourism departures before COVID, but the EIU expects its borders to remain largely locked until at least mid-2023.
The report notes that there is even a risk that the zero-COVID policy could be extended if the pandemic continues to be a threat. If all goes to plan, however, authorities will gradually take a less strict stance towards the virus, easing (but not lifting) mandatory quarantine measures and inbound travel controls.
However, the report highlights that frequent mass testing of the population in big cities, and occasional lockdowns in smaller cities will continue to keep sporadic outbreaks from spiralling out of control.
In this scenario, the number of outbound travellers from China are likely to more than double in 2023, to around 59 million. This would be only a little more than a third of the 155m departures in 2019, when China was the world’s biggest source of tourists.
High prices and labour shortages
The EIU report said inflation would not only affect travellers in 2023, but also the tourism sector. Hotels, bars and restaurants are grappling with high food and energy prices, while airlines are contending with high fuel bills. Airlines also face increasing wage pressures amid a chronic labour shortage.
After laying off staff during the pandemic, many companies have struggled to rehire. This lack of staff has caused airport queues and caps on passenger numbers, as well as flight cancellations and lost luggage in the summer of 2022. The chief executive of Heathrow Airport Holdings, John Holland-Kaye, has warned that problems will last until the end of 2023.
