Travel and the year ahead has been saved
Travel and the year ahead
Travel Weekly Insight Annual Report 2022-23
In March 2020, the World Health Organisation declared the Covid-19 outbreak a pandemic and within days people were told to stop all non-essential travel. Within a month, the travel industry stopped as international travel became impossible. The global travel industry has not experienced such shocks since the second World War. The end of the pandemic proved no less disruptive. Despite the summer of 2022 seeing some rebound in travel activity, geopolitical instability, surging inflation, higher interest rates and tightening monetary policy have all presented fresh headwinds and are preventing the sector’s full recovery.
Learning from the past two years, the sector is focusing on building more resilience to manage in times of uncertainty. Its future will depend on leaders taking responsibility to drive the sector’s transformation beyond their current tenure. Investing in the rethink and redesign of the travel industry will be critical especially in the face of the climate crisis.
Continued high inflation, higher taxes and rising interest rates will mean discretionary expenditure will fall in 2023. In these circumstances, demand is likely to remain subdued, in volume terms at least, until energy and food price inflation ease notably, with spending in the travel sector tempered by household attempts to save money. The series of shocks the world has experienced in the past two years mean that business leaders have to learn to manage businesses in an environment of increasing unpredictability.
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Transforming for tomorrow
The unprecedented disruption to how we travel has created an urgent need to rethink transportation, accommodation, and hospitality. As industry standards and practices continue to evolve, there is an opportunity to incorporate new technologies and methodologies that will define a new era of modern travel. Enforced changes, such as the accelerated shift to digital channels and solutions to interact with consumers and faster adoption of technologies to counter shortages of labour, can provide new opportunities for growth, as can the recognition of the financial gains from engaging in the ESG transition.
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The travel industry demonstrated incredible resilience through the last two years. Economic uncertainty, labour shortages and changing regulations pose new threats and risks. With sustainability being a growing priority, travel businesses also need to be ready to show their contribution towards addressing climate change given the sector’s difficulties in abating emissions.
It is imperative for the travel sector to work harder on serving changing consumers and stakeholders, not only to remain attractive but also to build greater resilience in anticipation of future challenges and crises.
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