Tourism starts 2022 strong, while facing new uncertainties

International tourism continued its recovery in January 2022, performing much better compared to the weakness exhibited at the start of 2021. However, the Russian invasion of Ukraine adds tensions to the already existing economic uncertainties, coupled with the numerous limitations of travel imposed by the Covid still in force.

According to the latest data available, international tourist arrivals worldwide more than doubled (+130%) in January 2022 compared to 2021: the 18 million more visitors recorded worldwide in the first month of this year is equivalent to the total increase recorded over the whole of 2021.

Although these figures confirm the positive trend that started last year, the trajectory of the recovery in January was affected by the appearance of the omicron variant and, consequently, the reintroduction of travel restrictions in various destinations. After the 71% decline recorded in 2021, international arrivals in January 2022 remained 67% below pre-pandemic levels.

Europe and the Americas show the best behavior

All regions experienced a significant rebound in January 2022although it should be noted that this compares to the low levels recorded at the start of 2021. Europe (+199%) and the Americas (+97%) continue to show the best results, with international arrivals still at half of those at pre-pandemic levels.

The Middle East (+89%) and Africa (+51%) also saw an increase in January 2022 compared to 2021, but these regions saw a decline of 63% and 69%, respectively, compared to 2019. Although Asia, the United States and the Pacific recorded a 44% year-on-year increase, several destinations remained closed to non-essential travel, resulting in the largest drop in international arrivals since 2019 (-93%).

By sub-regions, the best results were presented in Western Europe, quadrupling the number of arrivals recorded in January 2022 compared to 2021 data, but with 58% less than in 2019. Both the Caribbean (-38%) and the Southern Mediterranean Europe (-41%) showed the fastest recovery rates from 2019 levels. Central America posted the best results compared to 2019: 27%), Bulgaria and Curaçao (-20% each), El Salvador (-19%), Serbia and the Maldives (-13% each), Dominican Republic (-11% ), Albania (-7%) and Andorra (-3%). Bosnia and Herzegovina (+2%) even exceeded pre-pandemic levels. Among the main destinations, Turkey and Mexico recorded declines of 16% and 24%, respectively, compared to 2019.

Recovery prospects

After the unprecedented drop in 2020 and 2021, international tourism is expected to continue its gradual recovery in 2022. As of March 24, 12 destinations had no COVID-19 restrictions and a growing number of destinations were easing or lifting travel restrictions, helping to release pent-up demand.

The the war in Ukraine poses new challenges to the global economic environment and could hamper the restoration of confidence in the world. US and Asian source markets, which have started to open up, could be particularly affected when it comes to travel to Europe, as these markets are historically more cautious.

The closure of Ukrainian and Russian airspace, as well as the ban imposed by many European countries on Russian airlines, are affecting domestic travel on the continent. It is also causing the diversion of long-haul flights between Europe and East Asia, leading to longer flights and higher costs. Russia and Ukraine together accounted for 3% of global international tourism spending in 2020 and if the conflict continues, at least $14 billion in global tourism revenue could be lost. The importance of both markets is significant for neighboring countries, but also for European sun and beach destinations. The Russian market has also gained weight during the pandemic for long-distance trips such as the Maldives, Seychelles or Sri Lanka. As destinations, Russia and Ukraine accounted for 4% of all international arrivals to Europe, but only 1% of the continent’s international tourism receipts in 2020.

Economic uncertainty and pressures

Although it is too early to assess the impact, aerial searches and bookings on various channels slowed down a week after the invasion, but resumed in early March.

The offensive will no doubt add further strain to already difficult economic conditions, undermining consumer confidence and increasing uncertainty for investments. The Organization for Economic Co-operation and Development (OECD) estimates that global economic growth this year could be more than 1% lower than previous forecasts, while inflation, already high at the start of the year, could increase by at least 2.5%. The recent rise in oil prices (Brent hit its highest level in 10 years) and rising inflation are making accommodation and transport services more expensive, adding further pressure on businesses, purchasing power consumers and savings, says UNWTO.

This forecast coincides with the analysis of the possible consequences of the conflict on economic recovery and global growth carried out by the United Nations Conference on Trade and Development (UNCTAD), which also lowered its forecast for global economic growth for 2022 from 3.6% to 2.6% and warned that developing countries will be the most vulnerable to the slowdown.

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