Travel: Quarterly Statement Q2 2023

June 2023

Travel Quarterly Statement for Q2 2023 reveals that there has been an impressive rebound in tourism demand, but is now moderating as the cost of living crisis, with persistently high inflation, is taking its toll on consumers’ spending on discretionary items like travel. The Middle East and Africa is ahead, with strong inbound performances in the United Arab Emirates, Qatar and Saudi Arabia. Chinese outbound demand has been slow to materialise, but the long-term potential is sound.

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Key findings

Impressive rebound despite challenges

The speed of recovery in the Q2 2023 forecast is stronger than predicted in the previous quarter for trips (although not inbound tourism spending), but only by 1.2%, due to the global economic slowdown acting as a drag on demand. In 2023, inbound tourism spending worldwide is expected to reach USD1,518 billion, reaching 84% of pre-pandemic levels – an impressive rebound despite challenges from the cost of living crisis and the war in Ukraine.

Middle East out in front

Led by strong performances from Qatar, the UAE and Saudi Arabia, the broader Middle East and Africa region was the first to exceed 2019 peak levels in inbound tourism spending, aided by the latter two countries’ focus on diversifying away from fossil fuels and building vibrant global tourism hubs. Saudi Arabia has ambitious targets for 100 million visitors by 2030, as part of its Vision 2030 programme, after opening up to leisure tourism with an e-visa scheme.

China’s slow burn release of demand

China’s outbound recovery has yet to pick up full speed, with a cautious start to reopening after restrictions were removed, constrained by capacity and administrative challenges. However, the future looks bright for those looking to capitalise on high-spending, digitally savvy and social media-friendly Chinese visitors who prioritise curated travel and hospitality experiences. Outbound spending is predicted to more than triple in 2023, to USD100 billion.

Mega events worth the risk

Mega events – often deemed a poisoned chalice – are one way to re-energise destinations and connect with repeat and potential visitors. Already, the 2024 Paris Olympics are creating controversy, such as residents priced out, security challenges and geopolitical spats. France is predicted to enjoy a 20% uplift in inbound tourism spending in 2024, buoyed by the games.

Scope
Key findings
Updated forecast for travel: Even current threats cannot dampen acceleration
Global view: Slight adjustment of 0.5% downwards for market size in 2022
Middle East and Africa is the star inbound market
Only 29 countries enjoy upgrades to their forecast outlook
Majority of countries witness downgrades as global uncertainty continues to take its toll
World opens up ever more to travel
China slowly unleashes pent up outbound tourism demand
India rail disaster raises safety fears as country gears up for G20
Paris 2024 Olympic and Paralympic Games cause controversy
UK: “ sick man of Europe” re-emerges with stubbornly high inflation
Japan bets on experience-driven tourism
Middle East and Africa ahead of the curve in tourism recovery
Speed of recovery slows as travel recalibrates to the “new normal”
Global baseline outlook: Improved growth in an increasingly multi-speed global economy
Global inflation moderates only gradually as price pressures show signs of persistence
Real GDP annual growth forecasts and revisions from last quarter
Euromonitor International and COVID-19: Forecasts and analysis
Travel COVID-19 data and reporting timeline
About Euromonitor International’s Travel Forecast Model
Travel Forecast Model applications
Growth decomposition explained
Significance and applications for growth decomposition
Key applications for Travel Forecast Model

Travel

Travel encompasses several categories including tourism flows, lodging, travel modes, in-destination spending and booking.

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