The Mastercard Economics Institute’s latest report reveals a vibrant 2023 global travel outlook in the resilient spirit of post-pandemic resurgence. Unfettered by the past, consumers champion leisure travel with an unwavering commitment to experiences over material possessions. Remarkably, the reopening of mainland China has brought significant promise of strengthening the global tourism sector, significantly benefiting the Asia Pacific region.
Titled “Travel Industry Trends 2023,” the report meticulously uncovers critical insights into the prevailing global travel patterns. The canvas of these patterns is painted with the hues of shifting economic scenarios, perpetual consumer requirements, and the highly-anticipated reopening of mainland China. View the Full Report Here.
Consumer preferences have consistently tilted towards experiences rather than tangible items in a rapidly evolving economic landscape. This paradigm shift is shaping the 2023 travel outlook, fueled by a considerable interest in leisure travel that has outpaced the rebound of business travel until recently.
2023 has witnessed a resurgence in business travel, particularly among cultures valuing a return to the traditional office setup. Despite the uncertainty looming over the global economy, mainland China’s reopening is set to catalyze growth. As per Mastercard Economics Institute’s estimates, China’s return is predicted to bring about substantial growth worldwide, notably impacting the Asia Pacific region.
The Caribbean, too, echoes this global trend. Travel spending on experiences has witnessed a significant rise in Aruba (+70%), Barbados (+25.7%), Bahamas (+40.2%), and Jamaica (+105.9%), as compared to pre-pandemic levels (March 2023 vs. March 2019). Leisure travel remains staunch in the Caribbean markets, with flight bookings in the Dominican Republic (+221.4%), Jamaica (+128.7%), and Puerto Rico (+115.7%) soaring past pre-pandemic levels. Business travel and entertainment spending in the Latin America and Caribbean (LAC) region has shown an upswing, recording a growth of 27% for small businesses and 48% for large businesses in March 2023 compared to the previous year.
Amid the steady recovery, the emergence of new travel corridors stands out. Latin America’s economic growth, spurred by rising commodity prices, has directly stimulated outbound travel. Improvements in air connectivity between Latin American cities and other international destinations, coupled with competitive pricing, have enabled Latin American explorers to traverse more globally. Destinations like Spain and Germany are expected to be popular among these tourists in the spring and summer seasons.
Conversely, Mexico and the Caribbean have emerged as anticipated spring and summer destinations for U.S. and Canadian citizens. The demand for unique, culturally immersive experiences continues to rise, driven by social media influences and popular entertainment.
China’s long-awaited reopening brings a boon for global and Asia Pacific tourism. The relief from strict COVID-19 regulations is likely to propel a strong demand for travel and experience-based consumption. By March 2023, despite minimal travel in the preceding year, spending on experiences in China reached an impressive 93% of the 2019 levels. China’s opening seems poised to yield rich dividends for economies in the Asia Pacific region, owing to their close ties in international trade, tourism, and geographical proximity. According to the Mastercard Economics Institute estimates, Northern Europe, particularly Germany, France, and Brazil, are other nations expected to gain from China’s economic recovery.
As Bricklin Dwyer, Mastercard’s Chief Economist and Head of the Mastercard Economics Institute, said, “Consumers are acting on pent-up desire to explore new locales, connect with friends and family, and accumulate experiences to make up for lost time. Despite evolving economic landscapes, resilient consumers continue to prioritize travel. And with new corridors emerging and China reopening, the 2023 outlook indicates good reason to be optimistic.”
Mastercard remains committed to aiding the global tourism sector in its recovery efforts and enhancing travellers’ experiences. Through market analysis and high-frequency data insights, Mastercard helps businesses decipher changing consumer trends and formulates marketing solutions and consumer engagement strategies that maximize bookings and promote brand loyalty.
In the words of Dwyer, “Travelers want a good experience from the time they book their plane ticket to their first step on new soil, and companies that understand that are better positioned to establish longer and more valuable relationships with their consumers.”
As the world continues to navigate the flux of the macroeconomic environment, companies increasingly prioritise personalising experiences, offers, and payment methods, including options for redeeming points for bookings. This shift in strategy is expected to keep individual travellers at the heart of engagement and catalyze the resurgence of the global travel and tourism industry.
Written by: Jill Walsh
