Mastercard Economics Institute releases Travel Industry Trends 2023: Mainland China re-opens, experiences endure, and business travel bounces back

New insights from the Mastercard Economics Institute reveal that European consumers are taking advantage of a more traditional travel ecosystem in 2023, prioritising leisure travel. Released today, Travel Industry Trends 2023 delivers key insights about the global and European state of travel, punctuated by shifting economic landscapes, persistent consumer demand, and a reopening of mainland China.  

In the face of a changing economic landscape, post-pandemic preferences for experiences over things¹ and a consistent demand for leisure travel shape the 2023 outlook. Initially lagging leisure travel, business travel found its footing in the latter half of 2022, especially in regions prioritising a return to office. With an uncertain economy providing some cross-market turbulence, mainland China’s reopening is expected to bolster growth globally with concentrated impact in Asia Pacific, according to Mastercard Economics Institute estimates.  

Key findings include:  

• Leisure and business travel are growing at the same pace. In the second half of 2022 into early 2023, corporate flight bookings caught up to leisure flight bookings driven by regions with a strong return to office culture.² Our insights show demand for in-person meetings, with the most significant growth in commercial travel and entertainment expenses being led by Asia Pacific and Europe up 64% and 42%, respectively, between January-March 2023.³ 
  
• Mainland China’s reopening benefits Northern Europe tourism. China’s reopening following tight COVID regulations comes at a time when it will likely have a positive impact on the experience economy as pent-up demand for travel is expected to drive strong tailwinds. Based on Mastercard Economics Institute estimates, countries from Northern to Southern Europe – Germany, Netherlands, France and tourist hotspots in the south - are expected to benefit from China’s reopening which could see a boost in their exports, including tourism, to China as the economy recovers. 
  

• European travellers prefer to travel within the region – the only non-European country on the list of top 10 destinations for Europeans is the US. Due to extreme heatwaves and risks of wildfires in the southern Europe, they are increasingly exploring destinations in the cooler parts of the continent, including the UK, Scandinavia, the Netherlands, Switzerland and Germany.
  

• Tourists continue to prioritise experiences. Preference for experiences over things persists, and travellers are demonstrating new demand for the unique. European travellers are increasingly driven by a desire for cultural immersion, the appeal of lesser-known destinations, and sustainable travel experiences. However, the macroeconomic environment will continue to reshape tourists’ spending behaviours. Travellers from Europe where the real wage growth is negative or sluggish, are likely to seek value-for-money options. European consumers have already traded down in discretionary spending categories, choosing cheaper brands in grocery stores, eating out a more affordable restaurants and flying more low-cost airlines.

“After a strong recovery last year, pent-up desire to travel is set to boost European growth again in 2023“, comments Natalia Lechmanova, Senior Economist, Europe at Mastercard. “This is great news for Europe which remains as a top global destination for travellers from all corners of the world. The services sector is particularly well placed as travellers continue to prioritise spending on “experiences” over spending on “things“. 

Comprehensive Support to Travellers & Tourism Sector 

Travellers want a good experience from the time they book their plane ticket to their first step on new soil, and companies that understand that are better positioned to establish longer and more valuable relationships with their consumers. This key shift in expectations has already started to change not only how companies work with their consumers, but also the way in which we travel. And though consumer behaviour will continue to shift alongside the macroeconomic environment, providing more choice in how to pay (like redeeming points for bookings), and tailoring experiences, recommendations, and offers are just two strategies that keep the individual traveller at the centre of engagement.  

Mastercard is dedicated to helping the global tourism sector recover and welcome travellers through a range of services, from market analysis and high-frequency data insights that help make sense of changing consumer trends to marketing solutions and consumer engagement strategies that drive brand loyalty and maximise bookings.  

You can view the full Travel Industry Trends 2023 report here. Other reports and insights from the Mastercard Economics Institute can be found here.    

¹"Experiences" includes tourist spending at restaurants, amusement parks, casinos, nightclubs, bars and other events, while "Things" includes tourist spending at convenience store chains, apparel, cosmetics, sporting goods, jewellery, footwear, bookstores, electronics, toys and department stores. Excludes transportation and lodging spend. Represents analysis of aggregated & anonymised switched volumes (nominal US dollars unadjusted for FX) for leisure travellers while in-destination. 

² Corresponds with the number of commercial flight bookings made during reference period relative to the same time in 2019. Based on aggregated & anonymised Mastercard flight booking data provided by third party partners sourced by Mastercard Economics Institute. 

³ Represents Mastercard Economics Institute analysis of aggregated & anonymised switched volumes (nominal US dollars unadjusted for FX) for corporate travel & entertainment expenses.

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