Between July and September 2023, more than 414 million international tourists travelled globally, a 21.5 per cent increase from the same period in 2022, reaching 91 per cent of 2019 levels (Figure 1, UNWTO). Growth in the third quarter (Q3) of 2023 has been fueled by sustained pent up demand and travel sentiment, driving strong visitor expenditures particularly evident during the Northern Hemisphere summer season. The rate of growth has slowed compared to the Q3 2021–2022 period (83 per cent y/y increase), as visitor volumes get closer to pre-pandemic levels and global macroeconomic and geopolitical instability dampen organic sources of growth. Global hotel occupancy rates were 3 per cent higher in Q3 of 2023 than the same period in 2022. In July, they reached 71 per cent, the highest occupancy level since the start of the pandemic (STR).
Trade in travel services remained resilient amidst economic and geopolitical challenges affecting other sectors (Figure 2). Tight monetary policy, persistent inflationary pressures and heightened geopolitical tensions affected the growth of trade in goods through the second half of 2023 (World Bank). Meanwhile, trade in travel services recovered to 98 per cent of 2019 levels in Q2 2023 the most recent quarter with widespread data available and surpassed pre-pandemic levels in the months of August and September. Growth in global services trade decelerated in Q2, increasingly being stabilised by tourism growth, although the contribution of tourism to trade growth will likely wane as the recovery matures (World Bank).
Travel receipts, an important indicator of tourism’s contribution to foreign exchange earnings and gross domestic product (GDP), continued their strong upward trajectory. Many countries registered high levels of year-on-year (y/y) growth in inbound travel receipts, including Indonesia (82.7 percent), Brazil (44.9 percent), and India (40.5 percent). Major source markets with strong growth in outbound tourism spending included Italy, spending 16 percent more than in 2019 (January to August), and Germany and the United States (13 per cent and 11 per cent more from January to September 2023, respectively) (UNWTO).
In Q3 2023, the gap between global aviation passenger demand and supply further narrowed, illustrated by a convergence of passenger traffic and capacity in Figure 3. Aviation supply or capacity—measured by Available Seat Kilometers (ASKs)—continued to grow in Q3 as airlines increased their fleets in response to sustained demand, narrowing the
supply-demand gap caused by the pandemic. Global Aviation demand (international passenger traffic, measured in Revenue per Kilometers or RPKs) increased as well, with airlines in Latin America and the Middle East reaching their pre-pandemic traffic levels by September 2023, and carriers in Asia Pacific nearly doubling their international RPKs y/y in that month. Meanwhile, European passenger traffic exhibited an unusual decline in August, contrary to historical seasonal trends. (IATA)
Year-on-year increase in travel prices resumed in Q3 after 18 months of almost continuous declines (Figure 4). In August 2023, U.S. travel-related inflation—reflected by the U.S . Travel Price Index (TPI)—was up 2.2 per cent y/y, influenced by lodging prices (3 per cent y/y), recreation prices
(5.6 per cent y/y), and food/beverage away-from-home prices (6.5 per cent y/y). In September, motor fuel prices increased as well (2.7 per cent y/y), while airfares remained below 2022 for Q3 as supply further converges with demand. Broader consumer prices—measured by the U.S. Consumer Price Index (CPI)—increased moderately during the same time, albeit less than travel prices. (USTA)
Between July and September 2023, more than 414 million international tourists travelled globally, a 21.5 per cent increase from the same period in 2022, reaching 91 per cent of 2019 levels (Figure 1, UNWTO). Growth in the third quarter (Q3) of 2023 has been fueled by sustained pent up demand and travel sentiment, driving strong visitor expenditures particularly evident during the Northern Hemisphere summer season. The rate of growth has slowed compared to the Q3 2021–2022 period (83 per cent y/y increase), as visitor volumes get closer to pre-pandemic levels and global macroeconomic and geopolitical instability dampen organic sources of growth. Global hotel occupancy rates were 3 per cent higher in Q3 of 2023 than the same period in 2022. In July, they reached 71 per cent, the highest occupancy level since the start of the pandemic (STR).
Trade in travel services remained resilient amidst economic and geopolitical challenges affecting other sectors (Figure 2). Tight monetary policy, persistent inflationary pressures and heightened geopolitical tensions affected the growth of trade in goods through the second half of 2023 (World Bank). Meanwhile, trade in travel services recovered to 98 per cent of 2019 levels in Q2 2023 the most recent quarter with widespread data available and surpassed pre-pandemic levels in the months of August and September. Growth in global services trade decelerated in Q2, increasingly being stabilised by tourism growth, although the contribution of tourism to trade growth will likely wane as the recovery matures (World Bank).
Travel receipts, an important indicator of tourism’s contribution to foreign exchange earnings and gross domestic product (GDP), continued their strong upward trajectory. Many countries registered high levels of year-on-year (y/y) growth in inbound travel receipts, including Indonesia (82.7 percent), Brazil (44.9 percent), and India (40.5 percent). Major source markets with strong growth in outbound tourism spending included Italy, spending 16 percent more than in 2019 (January to August), and Germany and the United States (13 per cent and 11 per cent more from January to September 2023, respectively) (UNWTO).
In Q3 2023, the gap between global aviation passenger demand and supply further narrowed, illustrated by a convergence of passenger traffic and capacity in Figure 3. Aviation supply or capacity—measured by Available Seat Kilometers (ASKs)—continued to grow in Q3 as airlines increased their fleets in response to sustained demand, narrowing the
supply-demand gap caused by the pandemic. Global Aviation demand (international passenger traffic, measured in Revenue per Kilometers or RPKs) increased as well, with airlines in Latin America and the Middle East reaching their pre-pandemic traffic levels by September 2023, and carriers in Asia Pacific nearly doubling their international RPKs y/y in that month. Meanwhile, European passenger traffic exhibited an unusual decline in August, contrary to historical seasonal trends. (IATA)
Year-on-year increase in travel prices resumed in Q3 after 18 months of almost continuous declines (Figure 4). In August 2023, U.S. travel-related inflation—reflected by the U.S . Travel Price Index (TPI)—was up 2.2 per cent y/y, influenced by lodging prices (3 per cent y/y), recreation prices
(5.6 per cent y/y), and food/beverage away-from-home prices (6.5 per cent y/y). In September, motor fuel prices increased as well (2.7 per cent y/y), while airfares remained below 2022 for Q3 as supply further converges with demand. Broader consumer prices—measured by the U.S. Consumer Price Index (CPI)—increased moderately during the same time, albeit less than travel prices. (USTA)
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