International travel is showing signs of recovery as more countries ease their travel restrictions and vaccination rates increase. According to the International Air Transport Association (IATA), international passenger demand in June 2023 was 80.6% higher than in June 2020, and 20.1% higher than in June 2019, before the COVID-19 pandemic.
The recovery of international travel is driven by several factors, such as the availability of vaccines, the implementation of digital health certificates, the reopening of borders, and the pent-up demand for leisure and business travel. Some of the most popular destinations for international travelers include Europe, Asia-Pacific, and Latin America.
IATA Director General Willie Walsh said that the recovery of international travel was encouraging and demonstrated the resilience of the industry and the people. He also urged governments to harmonize their travel policies and protocols to avoid confusion and uncertainty for travelers and airlines.
The Lagging of Domestic Fares and Hotel Rates
While international travel is surging, domestic fares and hotel rates are lagging behind. According to a report by Hopper, a travel booking app, domestic airfares in July 2023 were 18% lower than in July 2019, and hotel rates were 12% lower. The report also projected that domestic airfares would remain low until the end of the year, averaging $260 round-trip, while hotel rates would increase slightly to $148 per night.
The lagging of domestic fares and hotel rates is attributed to several factors, such as the oversupply of seats and rooms, the competition among airlines and hotels, the uncertainty about the delta variant of COVID-19, and the preference for outdoor and rural destinations. Some of the most affordable destinations for domestic travelers include Las Vegas, Orlando, Denver, Chicago, and Atlanta.
Hopper Chief Economist Adit Damodaran said that domestic fares and hotel rates were still below pre-pandemic levels, which offered a great opportunity for travelers to save money and explore new places. He also advised travelers to book early and be flexible with their dates and destinations to get the best deals.
The Implications for the Industry
The recovery of international travel and the lagging of domestic fares and hotel rates have different implications for the travel industry. On one hand, the recovery of international travel is a positive sign for airlines and hotels that rely on foreign visitors for their revenue and profitability. On the other hand, the lagging of domestic fares and hotel rates is a challenge for airlines and hotels that depend on domestic travelers for their cash flow and occupancy.
The industry also faces some uncertainties and risks, such as the emergence of new variants of COVID-19, the inconsistency of travel regulations across countries, and the volatility of consumer confidence and demand. The industry needs to adapt to the changing market conditions and consumer preferences, as well as to invest in safety measures, technology, and innovation.
The industry also needs to collaborate with governments, regulators, health authorities, and other stakeholders to ensure a safe and sustainable recovery of travel.
