05/07/2021,
by WiT,
in Regions,
Sectors,
Social
WHILE global travel recovery is resuming at a gradual pace an uptick in global fuel spend has seen a “strong surge” in ground travel in markets including countries in Asia Pacific like Australia, Singapore, the Philippines and Hong Kong.
A new study by Mastercard, Recovery Insights: Ready for Takeoff?, shows that one in five country studied have returned to at least 90% of pre-pandemic levels for domestic flight activity, with Australia surpassing the global average with bookings at 116%.
The report, developed by the Mastercard Economics Institute, looks at the next wave of travel and its drivers, a shrinking gap between global business travel and global leisure travel, growth in spending categories and what they mean for travel, and the emergence of 10 travel routes.
“Although many markets in Asia Pacific are yet to see international borders open there are some early bright spots in domestic travel recovery,” said David Mann, chief economist, Asia and Middle East and Africa (MEA) at Mastercard economics institute. “As travel corridors continue to open and flourish across the US and Europe, Mastercard believes the pent-up demand in Asia Pacific, exacerbated by extended lockdowns, will follow a similar trajectory in both business and leisure travel, as the region cautiously re-opens its borders.”
Some key trends:
• Fuel spending up 13% from 2019’s peak: The report shows a robust demand for domestic ground travel with road trips – the big trend of 2020 – remaining popular. People in Singapore, Hong Kong, the Philippines and Australia are travelling across the country by car.
• Global business travel lags behind leisure travel by four months: Global business travel is showing signs of recovery. Australia domestic corporate travel bookings is at nearly 80% of pre-Covid levels, while in the US it is back up to just over half of its average level from 2019.
• Pent-up savings driving sales across a variety of categories: With borders still closed and travel restrictions in many countries, consumers have channelled their savings to purchase products other than travel. A surprising finding is in Australia where sales at toupee and wigs stores have increased 81% in the past year, as are sales at beauty salons and luggage stores. Meanwhile, spending at boat dealers (+30%) and bike stores (+62%) also grew.
• Border reopenings fuelled 10 interesting travel corridors: The limited border reopenings have proven to be challenging for travellers and the travel industry alike. But the select open corridors such as between Australia and New Zealand, and between the US and Latin America and the Caribbean are meeting and, in some cases, exceeding pre-pandemic levels.
“The past year has only reinforced how important travel is—to our connection with friends, family and the broader world, to our business communities, and to our personal fulfillment,” said Raj Seshadri, president of data and services, Mastercard. “The economic implications of tourism are vast, with virtually no industry untouched when travellers stay home. Through Recovery Insights, Mastercard has helped airlines redesign travel routes, retailers rejig inventory and cities understand shifts in neighbourhood spending.”
Download the report here.
• Featured image credit: aapsky/Getty Images