Travel Market Report – Q1 Update

REPORT TRAVELMARKETREPORT ProducedbyResearch&Intelligence March2024 TravelMarketReport WelcometothelatesteditionoftheTravelMarketReport,broughttoyouby BCDTravel’sResearch&Intelligenceteam. Aswe’venowenteredanewyear,thisquarter’sTravelMarketReportbeginswithasummaryofwhattwoorganizationsbelievearethemacro,businessandtraveltrendstolookoutforin2024. Wefollowthiswithanupdateonthecurrentstateofglobalairtravelandhow it’srecovering. Stickingwiththesubjectofair,weexplorethelatestroundofairlineconsolidation,whichwillaffectcompetitioninAsia,EuropeandtheU.S. Weregularlysurveybothtravelmanagers/buyersandbusinesstravelers.Inourlatestsurvey,weaskedtravelersfortheirviewsoncarrental.It’sthefirsttimewe’veexaminedthisaspectofgroundtransportation.Youcanfindoutsomeofthekeyfindings,beforedelvingintothedetailedreport. Drawingonsurveyswepreviouslyconductedaboutsustainabletravelwithbothtravelbuyersandbusinesstravelers,we’veconsolidatedthefindingsintoasinglereport.Wepresentsomehighlights,includingasummaryoftheregionaldifferencesintravelers’sustainablebehaviors. TheResearch&Intelligenceteam MikeEggleton Director,Research&Intelligence NataliaTretyakevich SeniorManager,Research&Intelligence MelinaSibaja TravelInsightsAnalyst Background TomStandage,editorof“TheWorldAhead”fromTheEconomistmagazine,providedhisviewsonthetentrendstowatchoutforin2024. PoliticsGeopoliticsEconomics Vote-a-rama Multipleelectionswillputglobaldemocracyinthespotlight.Butmanyelectionswillbeneitherfreenorfair. America’sglobalchoice It’spresidentialelectionyearintheU.S.andtheoutcomeistooclosetocall.Buttheconsequencesofthevotewillbeglobal,impactingissuesrangingfromclimatepolicytosupportforUkraine. Europetostepup ToensureagainsttherealrisksofweakenedU.S.support,Europemuststepupandprovidethemilitaryandeconomicbackingneededlong-termbyUkraine.Anditshouldalsolayoutthe(difficult)pathforUkraine’seventualEUmembership. MiddleEastturmoil ThesituationinIsraelandGazahasdisruptedtheMiddleEast.Theconflictcouldspreadormayheraldanewchanceforpeaceintheregion. Multipolardisorder ConflictinUkraineandtheMiddleEast,andinstabilityinAfrica’sSahelhavedistractedtheU.S.fromitsunipolarfocusoncounteringChinainAsia. Asecondcoldwar Coldwarrhetorichashardened,particularlybetweenChinaandtheU.S.TheWestwillfindithardtodisconnectfromChina.CompetitiontowoocountriesintheSouthernHemisphere,fortheirgreenresources,willintensify. AIgetsreal AIisrapidlydeveloping,businessesareadoptingit,andregulationshouldmakeitmoreacceptable.Butworrieswillpersistaboutanexistentialthreat,joblossesandelectionmeddling. Newenergygeography Thepursuitofcleanenergyhascreatednewgreensuperpowers,redrawingtheenergy-resourcesmap.Copper,lithiumandnickelarethenewoil.A“greenlash”ispossible,asclimate-friendlypoliciesareseentargetingordinarypeople. Economicuncertainty Withinterestratesstayinghigherforlonger,Westerneconomiesmaylosemomentumin2024,ascompaniesandconsumersstruggle.Banksfacetwinchallengesofexposuretogovernmentbondsandcommercialproperty. Unitingtheworld? TheEconomistcompletesthesetwithatenthtrendbasedonapre-ChristmashopethattheworldputsideologicaldifferencesasideinanOlympicyear. Source:TheEconomist,TheWorldAhead,Nov.6,2023 Background BasedonanalysisfromitssisterpublicationTheEconomistIntelligenceUnit,TheEconomistmagazinehassharedaroundupoftenbusinesstrendstowatchoutforin2024. Interestratesfall Asinflationslowlyeases,centralbanksaroundtheworldwillstarttoreduceinterestrates(formid-2024). Infrastructureholegrows Theshortfallininfrastructureinvestmentwillgrowto$3trillion.Asiawillbethemostactiveintryingtoclosethegap. Renewableenergyconsumptionclimbs Aseffortstoslowclimatechangegrow,consumptionofrenewableenergywillclimbby11%.Fossilsfuelswillstillaccountformorethan80%ofenergydemand. GrowthinEVs Stronggovernmentsupportwillboosttheuptakeofelectricvehicles(EVs).Aquarterofnewcarswillbeelectric,withmorethanhalfofthesesoldinChina. Emptyoffices AfifthofofficesintheU.S.willbeempty,as60%offirmsallowremoteworking.ButinEurope,thevacancyratewillbejust8%. Healthcarespendingtoexpand Anageingpopulationwillspendvigorouslyonhealth.With10%ofpeopleaged65orolder,healthcarewillaccountfor10%ofglobalGDP(grossdomesticproduct). Defenseindustrydoeswell TheU.S.alonewillspend$886billionondefense,asitsupportsUkraineandcountersmovesbyChinainAsia. Agoodyearforadvertising Bigsporting(ParisOlympics)andpolitical(U.Spresidentialelection) eventswillpushupglobaladvertisingrevenueby5%. Recordtravelrevenue Internationaltourismwilldefygeopoliticalandeconomicuncertainty,withhighpriceshelpingtoliftrevenuetoarecord$1.5trillion. ITspendingincreases Spendingoninformationtechnologywillincreaseby9%.Risksofartificialintelligencehypearehigh,however,withlittlerevenueexpectedfromthistechnology. Source:TheEconomist,Nov.13,2023 Background Afterconsultingexpertstogetaglimpseintothefuture,Amadeushaslaidoutfivebroadtrendsitbelieveswillimpacttravelinthemonthsahead. Musictourism Aboominconcertsandfestivalshasinspiredasurgeinpeopletravelingabroadtoseetheirfavoriteperformers.Musictouris