International travel has returned to the record levels achieved in 2019 but UK domestic travel has lagged in terms of pace, said Oxford Economics Managing Director EMEA David Goodger at his AHC session in Manchester Central on the Future of Travel: Unpacking Trends for the UK Market
“We are seeing recovery and we’re getting back to or above 2019 levels for international travel, which let’s not forget was a record year,” Goodger said on day two of the congress. “And in the UK occupied beds are also above 2019 levels.”
However, he warned that a number of changes in 2016 have made the UK less attractive as a destination, from the removal of tax-free shopping for overseas visitors to greater restrictions on visas, which has contributed to the UK trailing other international locations.
In terms of recovery, international business, international leisure and domestic business and leisure have all experienced very uniform profiles in terms of the past few years, albeit that the figures have not been quite as robust domestically.
“Looking at the challenges for travel, cost of accommodation is top among those we have surveyed,” he said, stressing that expense remains a dominant factor in decision-making. “And most other top elements are cost-related.”
Optimism remains despite challenges
However, despite the challenges Goodger said that optimism remains about the travel trajectory for the medium term and he said that Oxford Economics expects from its research to see greater confidence expressed over the next two and five years.
“We have seen real wage increases, inflation is back under control, so people will have more money in their pockets. And travel is being prioritised [in terms of consumer expenditure], although that’s slightly less positive among UK respondents,” Goodger added.
Looking at regional trends, he noted that travel demand coming from the Americas, particularly the US, has come back in part because of the positive exchange rate effect and the strong dollar. European demand has been a little bit more subdued and “a bit of a disappointment” but has recovered this year, he noted of travel volumes.
“Asia and the Chinese market are gradually coming back, although China will not be fully back until next year,” Goodger predicted. “But international travel is continuing to drive growth and has experienced higher increases in spend than leisure because companies still see the value in travel.”
Overall, he anticipated that global international travel will hit new record levels this year and said that although UK international demand is lagging behind the recovery of elsewhere, it is nonetheless regaining 2019 levels.
“Domestic travel remains important but is less dynamic than international,” he concluded.