Travel Market Report – Q1 Update

TRAVELMARKETREPORTMarch 2024Produced by Research & IntelligenceREPORT Mike EggletonDirector, Research & IntelligenceNatalia TretyakevichSenior Manager, Research & IntelligenceMelina SibajaTravel Insights AnalystThe Research & Intelligence teamTravel Market ReportWelcome to the latest edition of the Travel Market Report, brought to you by BCD Travel’s Research & Intelligence team. As we’ve now entered a new year, this quarter’s Travel Market Report begins with a summary of what two organizations believe are the macro, business and travel trends to look out for in 2024.We follow this with an update on the current state of global air travel and how it’s recovering.Sticking with the subject of air, we explore the latest round of airline consolidation, which will affect competition in Asia, Europe and the U.S.We regularly survey both travel managers/buyers and business travelers. In our latest survey, we asked travelers for their views on car rental. It’s the first time we’ve examined this aspect of ground transportation. You can find out some of the key findings, before delving into the detailed report.Drawing on surveys we previously conducted about sustainable travel with both travel buyers and business travelers, we’ve consolidated the findings into a single report. We present some highlights, including a summary of the regional differences in travelers’ sustainable behaviors. BackgroundTom Standage, editor of “The World Ahead” from The Economist magazine, provided his views on the ten trends to watch out for in 2024. Source: The Economist, The World Ahead, Nov. 6, 2023PoliticsGeopoliticsEconomicsVote-a-ramaMultiple elections will put global democracy in the spotlight. But many elections will be neither free nor fair.AI gets realAI is rapidly developing, businesses are adopting it, and regulation should make it more acceptable. But worries will persist about an existential threat, job losses and election meddling.America’s global choiceEurope to step upMiddle East turmoilMultipolar disorderA second cold warNew energy geographyEconomic uncertaintyUniting the world?Conflict in Ukraine and the Middle East, and instability in Africa’s Sahel have distracted the U.S. from its unipolar focus on countering China in Asia.The pursuit of clean energy has created new green superpowers, redrawing the energy-resources map. Copper, lithium and nickel are the new oil. A “greenlash” is possible, as climate-friendly policies are seen targeting ordinary people.With interest rates staying higher for longer, Western economies may lose momentum in 2024, as companies and consumers struggle. Banks face twin challenges of exposure to government bonds and commercial property.The situation in Israel and Gaza has disrupted the Middle East. The conflict could spread or may herald a new chance for peace in the region.Cold war rhetoric has hardened, particularly between China and the U.S. The West will find it hard to disconnect from China. Competition to woo countries in the Southern Hemisphere, for their green resources, will intensify.It’s presidential election year in the U.S. and the outcome is too close to call. But the consequences of the vote will be global, impacting issues ranging from climate policy to support for Ukraine.To ensure against the real risks of weakened U.S. support, Europe must step up and provide the military and economic backing needed long-term by Ukraine. And it should also lay out the (difficult) path for Ukraine’s eventual EU membership.The Economist completes the set with a tenth trend based on a pre-Christmas hope that the world puts ideological differences aside in an Olympic year.Tenmacrotrends to watch out for BackgroundBased on analysis from its sister publication The Economist Intelligence Unit, The Economist magazine has shared a roundup of ten business trends to watch out for in 2024. Source: The Economist, Nov. 13, 2023Interest rates fallAs inflation slowly eases, central banks around the world will start to reduce interest rates (for mid-2024).Healthcare spending to expandAn ageing population will spend vigorously on health. With 10% of people aged 65 or older, healthcare will account for 10% of global GDP (gross domestic product).Renewable energy consumption climbsIT spending increasesInfrastructure hole growsA good year for advertisingRecord travel revenueDefense industry does wellGrowth in EVsBig sporting (Paris Olympics) and political (U.S presidential election) events will push up global advertising revenue by 5%.The U.S. alone will spend $886 billion on defense, as it supports Ukraine and counters moves by China in Asia. Strong government support will boost the uptake of electric vehicles (EVs). A quarter of new cars will be electric, with more than half of these sold in China.The shortfall in infrastructure investment will grow to $3 trillion. Asia will be the most active in trying to close the gap.International tourism will defy geopolitical and economic uncertainty, with high prices he