Asia Pacific to Drive Growth in 2024
The global travel industry faces shifting dynamics in 2024. Travel revenue projections for the top 200 tourism companies show that Europe, the most popular tourism hotspot in the world, is slowing down as the Asia-Pacific region is set to be the primary driver of travel growth. The forecast shows Asia Pacific in the lead, growing 20% over 2023. Europe’s gains are expected to be more modest, at 5% year-on-year.
Sluggish Growth in Europe
The Skift Travel Health Index monitors travel indicators across 22 countries, benchmarking monthly performance to 2019. The analysis reveals a recovery in Europe, but growth in the region is held back by Russia, which is stuck at 65% of pre-pandemic levels, and the economic conditions, which are leading to sluggish growth levels.
Asia Pacific, a laggard since 2021, made slow progress in travel recovery from the pandemic. However, early 2023 was a game-changer. As soon as China reopened borders and travel from the country resumed, the region made rapid progress, surpassing pre-pandemic performance by 2% in April 2023. This trend has continued. The strong growth in the region pushed the global travel average to overcome 2019 performance levels.
Europe's Modest Travel Forecast
As of the end of 2023, inbound travel to Europe was only 6% short of 2019 levels. Intra-European travel and favourable exchange rates attracting Americans helped the region’s travel rebound. High prices have fueled the recovery, mainly driven by rising inflation. After the revenge travel boom and a strong summer, European travel patterns are normalizing.
While the region has been resilient, persistent geopolitical instability could hurt further growth. According to the European Travel Commission’s Trends and Prospects (Q3 2023) Report, the ongoing war in Ukraine continues to affect arrival figures in Eastern Europe, and the developing conflict in Israel poses risks to destinations such as France, Turkey, and Romania, which are popular with Israeli travellers.
The report also revealed that 24% of European travellers are concerned about rising trip costs, and 17% expressed concerns about the economic situation and personal finances in the upcoming months. Additionally, extreme climate conditions may further impact tourism.
Having said that, Paris is gearing up to host the 2024 Olympics. Hotel rates in the city have surged, 24% higher than during the same period in 2023. This uptick shows the impact of increased demand associated with hosting major global events.
Developments are on the horizon in Eastern Europe, too. Romania and Bulgaria are expected to join the Schengen area in March 2024. This move will give a boost to travel in these countries.
We expect the region to grow, but more slowly than others. Globally, Europe has the highest volume of international travellers, twice the travel volumes seen in Asia Pacific in 2023. These numbers are too large to grow at double-digit growth rates. So, single-digit growth levels should not be viewed negatively; instead, they indicate the normalization of travel in the region. The Global Travel Outlook 2024 forecast shows that international travel volumes from Europe will almost return to pre-pandemic levels by 2024 and further grow by around 3% in 2025.
Asia Pacific to Drive Growth in 2024
The global travel industry faces shifting dynamics in 2024. Travel revenue projections for the top 200 tourism companies show that Europe, the most popular tourism hotspot in the world, is slowing down as the Asia-Pacific region is set to be the primary driver of travel growth. The forecast shows Asia Pacific in the lead, growing 20% over 2023. Europe’s gains are expected to be more modest, at 5% year-on-year.
Sluggish Growth in Europe
The Skift Travel Health Index monitors travel indicators across 22 countries, benchmarking monthly performance to 2019. The analysis reveals a recovery in Europe, but growth in the region is held back by Russia, which is stuck at 65% of pre-pandemic levels, and the economic conditions, which are leading to sluggish growth levels.
Asia Pacific, a laggard since 2021, made slow progress in travel recovery from the pandemic. However, early 2023 was a game-changer. As soon as China reopened borders and travel from the country resumed, the region made rapid progress, surpassing pre-pandemic performance by 2% in April 2023. This trend has continued. The strong growth in the region pushed the global travel average to overcome 2019 performance levels.
Europe's Modest Travel Forecast
As of the end of 2023, inbound travel to Europe was only 6% short of 2019 levels. Intra-European travel and favourable exchange rates attracting Americans helped the region’s travel rebound. High prices have fueled the recovery, mainly driven by rising inflation. After the revenge travel boom and a strong summer, European travel patterns are normalizing.
While the region has been resilient, persistent geopolitical instability could hurt further growth. According to the European Travel Commission’s Trends and Prospects (Q3 2023) Report, the ongoing war in Ukraine continues to affect arrival figures in Eastern Europe, and the developing conflict in Israel poses risks to destinations such as France, Turkey, and Romania, which are popular with Israeli travellers.
The report also revealed that 24% of European travellers are concerned about rising trip costs, and 17% expressed concerns about the economic situation and personal finances in the upcoming months. Additionally, extreme climate conditions may further impact tourism.
Having said that, Paris is gearing up to host the 2024 Olympics. Hotel rates in the city have surged, 24% higher than during the same period in 2023. This uptick shows the impact of increased demand associated with hosting major global events.
Developments are on the horizon in Eastern Europe, too. Romania and Bulgaria are expected to join the Schengen area in March 2024. This move will give a boost to travel in these countries.
We expect the region to grow, but more slowly than others. Globally, Europe has the highest volume of international travellers, twice the travel volumes seen in Asia Pacific in 2023. These numbers are too large to grow at double-digit growth rates. So, single-digit growth levels should not be viewed negatively; instead, they indicate the normalization of travel in the region. The Global Travel Outlook 2024 forecast shows that international travel volumes from Europe will almost return to pre-pandemic levels by 2024 and further grow by around 3% in 2025.
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