Travel TrendsTravel trends show robust leisure and business travel, China's reopening impact, and a preference for experiences.

6 key insights into the thriving travel industry of 2023

Asian travellers are venturing to the US and Australia, and exploring lesser-known locations for cultural immersion.
Asian travellers are venturing to the US and Australia, and exploring lesser-known locations for cultural immersion. Photo Credit: Adobe Stock/Lukas

The Mastercard Economics Institute has released its Travel Industry Trends 2023 report, shedding light on the latest developments in global travel. The report emphasises the resurgence of leisure and business travel, the reopening of mainland China, and the enduring preference for experiential journeys.

Key findings:

  1. Leisure and business travel are growing at the same pace, with flight bookings up approximately 31% in March 2023 compared to 2019, driven by the lifting of travel restrictions in Asia.
  2. Mainland China's reopening following Covid-19 regulations relaxation is expected to have a positive impact on the global and Asia Pacific tourism industry. Pent-up demand for travel is anticipated to drive strong growth, benefiting economies with close ties to China.
  3. Travellers are venturing further from home, establishing new corridors. The US and Australia remain popular destinations for travellers from the Asia Pacific region, while Hong Kong has seen increased visitor numbers, ranking third on the list of top destinations in February 2023.
  4. The preference for experiences over material possessions continues, with spending on experiences up 65% compared to 2019. Travellers are seeking cultural immersion in lesser-known destinations and are prioritising unique travel experiences.
  5. Corporate travel has caught up with leisure travel, indicating a strong return to office culture in many regions. Demand for in-person meetings and commercial travel has shown significant growth, particularly in the Asia Pacific and Europe regions.
  6. Spending on experiences in Singapore has surged, with a 264.7% increase in March 2023 compared to the same month in 2022, following the easing of Covid-19 restrictions.

David Mann, chief economist for Asia at the Mastercard Economics Institute, anticipates a strong demand for travel that will extend beyond the initial "revenge travel" phase. However, the challenge lies in whether flight and accommodation supply can keep pace with this surge in demand.

Mann added that to cater to evolving consumer expectations, comprehensive support for travellers and the tourism sector is crucial. Companies must focus on enhancing the entire travel experience, from booking to on-ground services, by offering diverse payment options, personalised recommendations, and tailored offers. By keeping the individual traveller at the centre of engagement, companies can foster long-lasting and valuable relationships.

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