Predicted growth in the 2024 travel industry will be driven by higher income travellers and a return to the international market by the Chinese.
Speaking at IHIF EMEA in Berlin, Tourism Economics managing director EMEA David Goodger said the global economic situation is continuing to normalise after recent economic shocks that have hit people’s pockets.
However, following last year’s data which shows travel has now surpassed the 2019 benchmark, before the pandemic locked down the world, the outlook is broadly positive.
Goodger said “It is a growth outlook but the two words we tend to be using a lot at the moment are ‘cautious optimism’.”
He said inflation is increasingly coming under control around the world, although it remains higher than ideal while interest rates are set to come down, even if this isn’t happening as quickly as consumers would like.
The immediate impact of this is while domestic markets have returned to normal; there is still room for growth in the international sector which is likely to get a boost this year from increased business travel.
Goodger said: "We do need continued strong economic conditions and we need that confidence to continue growing before we see that international travel return.”
Despite this, he added Tourism Economics’ own travel industry monitor survey which is carried out on a quarterly basis shows that 62% of respondents are predicting an increase in hotel occupancy this year, compared to 12% who are expecting a decrease.
This optimism is backed up by data showing that while among countries with advanced leisure travel markets, about 8% of all discretionary sending goes on travel, this figure is set to grow in 2024.
Goodger said: “Everything we’re seeing this year suggests that we will be pushing further and going to new highs in terms that ration.”
Much of this growth in advanced countries will be driven by well off consumers taking international and luxury holidays.
Goodger said: “There is a lot more resilience among the higher earners whose savings ratio rose during the pandemic.
“Some of that spending has been wound down but there’s still a lot of money being held by higher earning households.”
Meanwhile, despite emerging markets spiking in 2023,they are still not back to pre pandemic levels, although Goodger argued this situation will continue to improve as there is a high desire to experience international travel in this market while growing wealth and growing middle classes will mean they have the means to do so.
While he discounted figures showing a recent post pandemic spike in Chinese international travel as being skewed by the inclusion of travel to Hong Kong and Macau, he argued the market is set to make its long anticipated return to international travel in 2024.
Goodger said: “This year going into the medium term we do expect China to be the real stand out contributor, partly because of the size of the market and because of an increase in middle class households and wealth in China.”
However, he warned that this anticipated return to the market does depend on the geopolitical situation remaining stable, something that could change if China Taiwan tensions lead to trade barriers while it remains unclear what a second potential Donald Trump presidency could mean for the country.
Elsewhere, Goodger admitted while India might look like it has a good year ahead of it; it will be “no more than Italy or Canada”.
He also predicted Saudi Arabia and the UAE will have a strong 2024 thanks to improved accessibility and new products.