SOAR
1
Global Travel Environment
The International Civil Aviation Organisation’s latest analyses reveal that global air transport seat
capacity and passenger totals have reached an estimated 80% of pre-pandemic levels, with
passenger revenue at around 72% of its 2019 high point. The number of air passengers carried from
January to August of this year increased by an estimated +55%, compared to the same period in
2021. Aircraft flight departures increased by +28%, with overall seat capacity growing by +32%
over the same period.
The short-term outlook for accommodation performance across STR’s 48 forecast markets
continues to improve, with 2022 occupancy and average daily rate (ADR) upgraded for most
European markets. Pent-up leisure demand continues and rescheduled COVID-era events are
helping corporate demand. Strong demand, alongside persistently high inflation and tight labour
markets, are expected to contribute to continued ADR growth. While the pace of recovery for most
European markets is expected to slow from Q4 2022 through Q1 2023, demand remains on track
for recovery by 2023 for the 32 European forecast markets. The inflationary environment will lead
to higher rates, with ADR growth expected to maintain double-digit growth levels this year and in
2023, when compared with 2019 rates.
Latest data from ForwardKeys shows that continued post-pandemic travel recovery remains likely,
despite rising inflation and threats of recession. Forward bookings for leisure travel show a
continued recovery post-pandemic and business bookings are catching up. Caution persists
though, due to the continued war in Ukraine and its consequent impact on energy prices, as this
will negatively affect European economies and likely dent consumer confidence and corporate
demand. However, it is important to note that there is currently a concentration of flight bookings
during the traditional autumn half-term peaks and Christmas. There is concern that these peaks
could lead to further flight disruption, if the recent recruitment difficulties experienced by the
aviation industry persist.
Overall global consumer confidence continues to decline as inflation rises and the worldwide cost
of living crisis kicks in. Global tourism sources report that medium to long term travel outlook
continues to remain unclear as the impact of rising household food and energy prices takes hold.
The Ipsos’ Global Consumer Confidence Index for September reads at 45.7, down 0.4 point since
August. The Index sits at its lowest point since April 2021. In addition, the Expectations index has
declined for the 11
th
consecutive month and it now sits at its lowest point since December 2020.
Consumer confidence in the EU hit its lowest level on record in September. The Flash Consumer
Confidence Indicator for EU and euro area recorded a continuing steep downward trend in
September, dropping by 3.5 points in the EU (-29.9) and 3.8 points in the euro area (-28.8).
A new Ipsos poll in GB shows high levels of public concern about the rising cost of living, with 90%
of Britons concerned about rising costs on themselves or the country as a whole. The GfK
Consumer Confidence indicator in the UK fell to -44 in August 2022 from -41 in July, hitting a new
record low. On 22 September, the Bank of England said Britain was now in recession and raised
interest rates by 0.5 percentage points to a 14-year high of 2.25%.
US consumer confidence increased in August, after falling for three months; however, concerns
about inflation remain elevated. Purchasing intentions increased after a decline in July, and
vacation intentions reached an eight-month high on the back of a strong dollar.
Note: At the time of writing, the UK government is working through a number of fiscal proposals
which are impacting on exchange rates; this is being closely monitored by Tourism Ireland.