Travel: Quarterly Statement Q1 2022

May 2022

The Travel Quarterly Statement for Q1 2022 reflects the fact that cautious optimism for recovery has been tempered by war in Ukraine, leading to a humanitarian crisis at the heart of Europe and a major slowdown in the global economy, acting as a drag on huge pent-up demand. The impacts of war have been felt particularly in the doubling of inflation, as energy, fuel and food prices soared, leading to higher prices, deterring would-be travellers.

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Key Findings

War in Ukraine

The outlook for travel and tourism has been overshadowed by the war in Ukraine that began on 24 February 2022, with the Russian invasion. The war is predicted to cause a drop of USD7 billion in global inbound tourism spending in 2022, as Russian outbound tourism demand collapses under economic sanctions. The latest outlook for global travel and tourism is for global inbound spending to be at 45% of 2019 levels in 2022, based on the latest quarterly statement.

Hyperinflation risks

Some countries, like Turkey, are already dealing with the economic fallout of the war, with spiralling costs of food and energy, living with the reality of hyperinflation. The war has caused a spike in global energy prices, as sanctions shut off Russian oil and gas, with further sanctions expected. Rising prices are a double-edged sword for the likes of airlines, where pent-up demand on the one hand enables prices to rise, but on the other, risks driving consumers out of the market as household budgets tighten.

Bolder steps

Despite the rising uncertainty caused by recent geopolitical events in Europe, destinations across the world are becoming emboldened in their approach to opening up to double vaccinated passengers, thanks to mass vaccinations of residents, as well as hospitality staff, in places like the Caribbean. Asia Pacific has been slower to open up, due to red tape and low vaccination rates, but progress is now being made, with the likes of Cambodia and Singapore, along with Australasia, opening their doors.

Thriving not surviving

The window for reversing the negative impacts of climate change is closing according to the latest IPCC report, but tourism spending recovery is set to take several years, so the time to act on sustainable transformation is now. Embracing decarbonisation across the travel supply chain is critical, and will help protect the ecosystems and communities that tourism depends on. Extreme climate events will have a damaging long-lasting impact on even the most resilient destinations if they fail to act.

Introduction

Scope
Key findings

Q1 2022 Travel Update

Updated forecast for travel: major downgrade in Q1 even before the war
Global view: long road to recovery taking several years
War in Ukraine darkens the tourism outlook for Europe
Less than half of countries see upgrades, led by Mexico
Majority of countries witness significant downgrades
Travel restrictions are easing as the world reopens
War in Ukraine will slow global tourism recovery, particularly in Europe
War and sanctions lead to collapse in Russia’s outbound tourism
Oil price spike takes its toll on airlines
Turkey suffers from a hyperinflation surge that will price consumers out
UK lifts all testing requirements and restrictions
Singapore fully reopens to international travel
Caribbean a bright spot in tourism recovery
Opportune time for sustainable transformation as window closes
Geopolitical events impact potential tourism recovery

Q1 2022 Macroeconomic Update

Global economic growth to slow down; inflation remains high
COVID-19 new variants, supply disruptions and rising prices are key risks
Real GDP annual growth forecasts and revisions from last quarter, AE
Real GDP annual growth forecasts and revisions from last quarter, EMDE

About Our Industry Forecast Model

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