Research Briefing | Dec 19, 2022

Global Tourism Outlook in 2023

Global travel will show resilience in the face of the approaching economic downturn signalled by the pace of forward bookings and positive survey data. A continuing recovery in business travel, as well as some remaining built-up savings and pent-up demand, will support the ongoing travel recovery.

Nevertheless, the recession in the advanced economies will limit the pace of recovery in 2023. The US economy is set for a mild recession in 2023 but this will be countered by the strong dollar and accumulated savings. A looming recession and higher than previously anticipated inflation across Europe will erode earnings and weigh on consumer spending and tourism demand.

Staff shortages will continue to increase labour costs for the industry which will have to be, at least partially, passed on to consumers. Additional costs for travel will also feed through from higher energy prices and especially jet fuel prices.

Mass outbound tourism from China is expected to resume in the second half of 2023, although significant uncertainty remains around this timing.

The resumption of Chinese travel will contribute to the recovery of long-haul travel market share in 2023. The absence of Chinese outbound demand beyond this would be a major blow for the travel & tourism industry and for destinations worldwide.

There remains strong pent-up demand for cruise operations supported by bookings data which suggest that increased capacity will be filled. However, there will be increased deployment challenges and pricing pressure for cruise lines.

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