Mastercard Economics Institute Releases Travel Industry Trends 2023: Experiences Endure, Business Travel Bounces Back, and Mainland China Re-OpensMIAMI, FL | MAY 15, 2023
MIAMI, FL | MAY 15, 2023 – New insights from the Mastercard Economics Institute reveal that consumers are taking advantage of a more traditional travel ecosystem in 2023, prioritizing leisure travel and pioneering new corridors around the world. Released today, Travel Industry Trends 2023 delivers key insights about the global state of travel, punctuated by shifting economic landscapes, persistent consumer demands, 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 cultures prioritizing 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
Leisure travel remains robust in the markets measured in LAC – flight bookings in the Dominican Republic (+43.5%), Jamaica (+52.8%) and Puerto Rico (+32.9%) are up when comparing March 2023 to March 2022. Business travel and entertainment spending is also growing in the region, up 27% for small businesses and 48% for large businesses when looking specifically at March 2023 vs. March 2022.
Travelers establish new corridors
Latin America's economic growth, driven by a rise in commodity prices, has positively impacted outbound travel. Improved air connectivity between Latin American cities to other destinations and competitive pricing have enabled Latin American travelers to explore more international destinations. The U.S. remains the top destination, with European destinations like Spain and Germany expected to grow in popularity in the spring and summer. Mexico and the Caribbean are expected to be popular spring and summer destinations for U.S. and Canadian citizens.
Tourists continue to prioritize experiences
Preference for experiences over things persists, and travelers are demonstrating new demand for the unique. Potentially influenced by social media and entertainment, travelers are landing in lesser-known destinations in search of cultural immersion. Spending on experiences is up in the markets measured in LAC – Costa Rica (+144%), El Salvador (+213%), Guatemala (+117%), Jamaica (+105%), and Mexico (+116%) in March 2023 versus March 2019 levels. Meanwhile, spending on things above pre-pandemic levels occurred in two of the counties measured in LAC – Costa Rica (+107%) and El Salvador (+129%), highlighting robust tourism demand.
Mainland China’s reopening benefits global and Asia Pacific 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. By March 2023, spending on experiences was notably 93% of where it was in 2019 despite minimal travel last year. Economies in the Asia Pacific region could be obvious beneficiaries of China's opening, given their strong ties to international trade, tourism, and geographical proximity. Based on Mastercard Economics Institute estimates, other countries that are expected to benefit include northern Europe – Germany and France – and Brazil, which could see a boost in their exports to China as the economy recovers.
”Despite evolving economic landscapes, resilient consumers continue to prioritize travel. And with new corridors emerging and China reopening, the 2023 outlook indicates good reason to be optimistic.”
Comprehensive Support to Travelers & Tourism Sector
Travelers 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 behavior 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 traveler at the center of engagement.
Mastercard is dedicated to helping the global tourism sector recover and welcome travelers 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 maximize bookings.
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, jewelry, footwear, bookstores, electronics, toys and department stores. Excludes transportation and lodging spend. Represents analysis of aggregated & anonymized switched volumes (nominal US dollars unadjusted for FX) for leisure travelers while in-destination.
Disclaimer: This presentation and content are intended solely as a research tool for informational purposes and not as investment advice or recommendations for any particular action or investment and should not be relied upon, in whole or in part, as the basis for decision-making or investment purposes. This presentation and content are not guaranteed as to accuracy and are provided on an "as is" basis to authorized users, who review and use this information at their own risk. This presentation and content, including estimated economic forecasts, simulations or scenarios from the Mastercard Economics Institute, do not in any way reflect expectations for (or actual) Mastercard operational or financial performance.
About Mastercard Economics Institute
Founded in 2020, the Mastercard Economics Institute draws on unique, high-frequency and actionable economic measurement to give leaders in business and government the insights needed to make thoughtful decisions with better outcomes.
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