As predicted by the last edition of ANIXE report, this summer’s high season smashed all pre-pandemic levels despite inflation. The last two months have seen the continuation of a mega-positive trend in which turnover has exceeded 2019 levels. May 2022 generated a record level of bookings with a 15% monthly increase. The value achieved the 145% scale of growth compared with 05.2019. Recent months were the continuation of a steady positive trend, with turnover exceeding 2019 levels. August 2022 generated a 4% increase in bookings.
A value perhaps not as spectacular as in 05.2022, but the value remains 6% higher than before the pandemic began. Recent months have seen the continuation of a steady positive trend, with turnover exceeding 2019 levels. August 2022 generated a 4% increase in monthly bookings. A value perhaps not as spectacular as in May 2022, when the jump was 15%, but the value remains 6% higher than the same period before the pandemic began. This is good news for the travel sector, especially since the trend of full market recovery compared to the pre-pandemic period has continued for nearly six months.
This proves that the war in Ukraine, the pandemic and rising inflation – which certainly affects the number of travellers – cannot force people to cancel their vacations.
Finally free from the shackles of COVID, the pent-up demand for travel exploded. Airports, airlines and travel agents struggled to keep up with the massive influx of people desperate to get away for a week or two. After some initial bumps in the road, travel facilitators quickly accommodated the uptick in eager travellers to produce results that exceeded the pre-pandemic golden age.
Since our last edition, the tragedy in Ukraine has continued, as does its effect on the global economy. Inflation is rampant, energy prices are skyrocketing, and many talking heads predict a very cold (or expensive) winter for most Europeans. In addition, they expect that travel demand will wane as inflation rises and reduces consumer purchasing power.
Figures taken from the travel price index (TPI), published by the U.S Travel association, give us a gloomy outlook if current inflationary trends continue. According to July 2022’s TPI, the main driver of inflation is the transport segment. The price of airfares rose as much as 27.7% over the same period as last year due to spiking fuel prices. Meanwhile, the prices of accommodation in EU member countries grew by a huge 19.2%. In addition, food and beverage services saw a yearly increase of 7.4%. All of this means the price of the average holiday has risen around 17%. As a result, would-be travellers are beginning to feel priced out. In May 2022, 40% of Travelzoo Spain members who changed their travel plans said it was to choose a more affordable experience. So if prices go up even further, you can imagine more and more people will look for alternatives to travel.
Unless action is taken to prevent further inflation, these figures will likely grow as we approach 2023. And when most Europeans are choosing between ‘heating or eating’, will enough of us be able to afford a holiday to sustain the travel industry’s growth? Perhaps many will realise it might be the last chance for an affordable holiday and we could see a desperate scramble for getaways before the impending economic crisis. Do we need a fortune teller? We can try to predict the future with good or bad forecasts, but as we have seen, the market can react unpredictably. For example, the fear of a cold winter may fire up demand for travel to sunnier climes, just as travel restrictions allowed domestic travel to flourish.
Additionally, the Work From Home trend is evolving into the Work From Anywhere movement, which could bolster traveller numbers during the coldest months of winter. As a result, we are optimistic that although growth might slow due to inflation, we don’t foresee the same negative trends which the pandemic brought.
So, unless COVID-19 raises its ugly head from a summer of slumber and forces governments to take restrictive action, or the war explodes out into the rest of the world, we remain forever the optimists. As a wise man once said, “the past is history, the future is a mystery, and today is a gift, and that’s why we call it the present”. So, let’s not despair about what we don’t know, celebrate this summer’s booking bonanza and take a deeper look at the numbers behind the records.