Group travelers benefit from resilient demand despite economic headwinds
Travel demand is still booming despite worries about the global economy and the cost of living, giving airlines and hotels a boost ahead of an uncertain winter.
Hotel bookings for the fourth quarter exceeded 2019 levels this year, according to figures compiled by travel company Amadeus, which aggregates data from 35,000 global hotel properties.
Henrik Kjellberg, managing director of European holiday rental company Awaze, said bookings were “holding up well over the winter, both in terms of volume and price”, adding that “even in a recession, I’m expect the travel industry to continue to operate well.”
Airline bookings data also show that the travel recovery has not slowed since a summer season so busy that some European airports were overwhelmed with passenger numbers.
Global flight bookings for September, October and November were 33% below 2019 levels this week, an improvement from the summer when bookings were 40% lower, according to the industry data firm. ForwardKeys trip.
The flight data, drawn from an industry-wide ticketing database, covers all major national carriers and includes parts of Asia where flights are still well below normal levels. This includes sales from low-cost airlines, many of which have reported faster recoveries and are flying near or above 2019 levels.
“In the struggle between the push to recover from the pandemic and the cost of living crisis acting as a drag to slow things down, recovery holds the upper hand,” said ForwardKeys executive Olivier Ponti.
Tour operator Tui said this week that bookings in the UK, Germany and the Netherlands had exceeded pre-pandemic levels in recent weeks and people were spending more money than usual on trips longer or more expensive.
“It’s encouraging and shows the current importance of holidays and travel experiences in the post-Corona era,” said Tui’s outgoing chief executive Fritz Joussen.
The rally came even as airlines hiked ticket prices, mainly to pass on higher fuel costs.
Long-haul airline Virgin Atlantic expects winter revenue to top 2019 levels, even though it plans to fly only 90% of its pre-pandemic schedule.
Vinod Kannan, managing director of Vistara, India’s second-largest airline, said “it hasn’t gotten to the stage where we are seeing a drop in demand because of fares”, noting that “people don’t haven’t traveled for two years”.
Airline stocks have suffered in recent months despite the resumption of travel as investors worried about high fuel prices and a weakening economic outlook.
Analysts say the biggest question facing the industry is whether demand can remain resilient in the face of a significant economic downturn.
Bernstein analysts calculate that European airlines’ fourth quarter schedules show a full return to 2019 levels for transatlantic and intra-European flights, and are 9-15% lower for travel to the rest of the world.
But they warned winter demand “remains highly uncertain”.
Kannan said he thought ‘through this year, through this winter, we should still be fine because of the Covid rebound – and people still want to meet friends, relatives and businesses. But what about 2023? We will have to wait and watch”.