Global Tourism Undeterred by Rising Prices

The international tourism industry is in relatively good shape, with high demand, despite rising prices, analysts have noted.

Some economic forecasters predicted that the post-pandemic travel boom would start to slow down, especially with high-ticket prices. Thus far, however, demand remains high.

In the current year, international travel surged to approximately 90% of its pre-pandemic levels, as reported by the International Air Transport Association. This resurgence was primarily driven by travelers from cooler climates visiting Southern Europe, even in the face of high temperatures. A significant portion of these international tourists hailed from the United States.

Tourists still keen to travel despite high prices

“In the wake of the pandemic, a number of folks have reset their priorities and have focused on splurging on travel,” Dan McKone, a senior partner at strategy consultancy L.E.K. Consulting, told Reuters.

The number of people opting to holiday abroad may even increase in the coming year, as suggested by the insights of travel technology company Amadeus. Their recent survey unveiled that 47% of participants identified international travel as a prominent priority within discretionary spending for both 2023 and 2024. This figure represents an increase from the previous year’s 42%. The survey encompassed travelers from various nations, including the UK, France, the United States, Germany, and Singapore.

These trends boosted travel companies’ quarterly earnings. Royal Caribbean (RCL.N) reported record results, Booking Holdings (BKNG.O) and Airbnb (ABNB.O) saw revenue rise by 27% and 18% respectively, while Delta (DAL.N) and Marriott International (MAR.O) predicted strong future demand. Lufthansa (LHAG.DE) stated bookings for the year exceed 90% of pre-pandemic levels, extending the summer season, and United Airlines (UAL.O) is expanding Pacific routes to include Manila, Hong Kong, Taipei, and Tokyo this autumn.

In a recent statement, Moody’s investor service projected a 22% year-on-year growth in global passenger demand for 2023 and a 6% increase for 2024. Despite these positive trends, ticket prices, which have experienced double-digit percentage hikes in some instances post-pandemic, are not anticipated to experience a significant decline.

Travel to Greece

Naturally, Greece stands to benefit from high demand in the tourist sector. According to some figures, tourism accounts for as much as 25% of Greece’s GDP, so success in this sector is vital to the Greek economy.

The positive economic climate for tourism this year is contrasted sharply by the meteorological climate. In late July, parts of Greece – some of which are tourist hotspots – were devastated by wildfires which spread easily due to dry weather conditions. The spread of the wildfires on Greek islands like Rhodes and Corfu necessitated the evacuation of a significant number of tourists.

It remains to be seen how much the wildfires will affect the bottom lines of businesses and workers dependent on tourism this year, but some analysts already seem to think that Greece has fared better than other countries impacted by the wildfires like Italy. Part of the Greek government’s response to the issue has been to offer free holidays to those who had to cancel their trips to Rhodes due to the fires.