Tourism off to strong start in 2022 but faces new challenges: UNWTO

Tourism off to strong start in 2022 but faces new challenges: UNWTO

MADRID — International tourism gained incredible momentum at the start of the year, says UNWTO, however, the Russian invasion of Ukraine could hamper recovery.

Based on the latest available data, global international tourist arrivals more than doubled (+130%) in January 2022 compared to 2021. These 18 million more visitors recorded worldwide in the first month of this year equals the total increase for the whole of 2021. However, following the 71% decline of 2021, international arrivals in January 2022 remained 67% below pre-pandemic levels.

All regions recorded a significant rebound in January 2022, though from low levels seen at the start of 2021. Europe (+199%) and the Americas (+97%) continued to post the strongest results, with international arrivals still around half pre-pandemic levels (-53% and -52%, respectively).

As of March 24, 2022, 12 destinations had no COVID-19-related restrictions in place, while an increasing number of destinations were easing or lifting travel restrictions.

THE UKRAINE FACTOR

The war in Ukraine poses new challenges to the global economic environment and risks hampering the return of confidence in global travel. The U.S. and the Asian source markets, which have begun to open up, could be particularly impacted, especially regarding travel to Europe, as these markets are historically more risk averse.

The shutdown of Ukrainian and Russian airspace, as well as the ban on Russian carriers by many European countries is affecting intra-European travel. It is also causing detours in long-haul flights between Europe and East Asia, which translates into longer flights and higher costs.

Russia and Ukraine accounted for a combined 3% of global spending on international tourism in 2020 and at least US$14 billion in global tourism receipts could be lost if the conflict is prolonged. The importance of both markets is significant for neighbouring countries, but also for European sun and sea destinations.

THE FORECAST

Even though UNWTO says it’s too early to assess the impact, air travel searches and bookings across various channels showed a slowdown the week after the invasion but started to rebound in early March. It is certain that the war will add further pressure to already challenging economic conditions, says UNWTO, undermining consumer confidence.

The Organisation for Economic Co-operation and Development (OECD) estimates global economic growth could be more than 1% lower this year than previously projected, while inflation, already high at the start of the year, could be at least a further 2.5% higher. The recent spike in oil prices and rising inflation are making accommodation and transport services more expensive, adding extra pressure on businesses, consumer purchasing power and savings, UNWTO notes.

This forecast is in line with the analysis by the United Nations Conference on Trade and Development (UNCTAD), which downgraded its projection for world economic growth in 2022 from 3.6% to 2.6% and warned that developing countries will be most vulnerable to the slowdown.