Tourism Outlook 2023

According to UNWTO’s projections for 2023, the number of international tourists could return to 80-95% of pre-pandemic levels, depending on factors such as the depth of the economic slowdown and the progress of travel recovery in Asia and the Pacific.

With a strong recovery seen in 2022, it’s expected that international tourist visits to Europe and the Middle East will reach pre-pandemic numbers this year. However, due to the tough economic situation, tourists are anticipated to prioritize affordability and opt for more local travel destinations.

In 2023, the number of international tourists could return to 80-95% of pre-pandemic levels

All regions bouncing back

According to the latest data from UNWTO, international tourism saw a significant rebound in 2022, with over 900 million tourists traveling internationally, which is double the previous year’s figures but still 63% below pre-pandemic levels. Every region of the world recorded a growth in international tourist numbers, with the Middle East experiencing the highest relative increase, reaching 83% of pre-pandemic levels.

Europe saw 585 million arrivals in 2022, which is close to 80% of pre-pandemic levels. The Americas and Africa recovered about 65% of their pre-pandemic visitors, while Asia and the Pacific, due to ongoing pandemic-related restrictions, only saw a recovery of 23%. The first UNWTO World Tourism Barometer of 2023 provides a comprehensive analysis of the performance of different regions and highlights the destinations that have already surpassed their 2019 visitor numbers.

UNWTO anticipates 2023 to be a promising year for the global tourism industry, despite facing various challenges such as economic conditions and ongoing geopolitical uncertainty. UNWTO predicts that travelers may opt for more domestic and regional trips in response to the current economic situation, which is expected to help drive the recovery of the tourism sector.

Chart: International Tourist Arrivals, World and Regions (Source: UNWTO)

Chinese tourists set to return

UNWTO predicts a positive outlook for the tourism industry in 2023 despite various challenges, including the economy, health concerns, and geopolitical instability. The lifting of COVID-19 travel restrictions in China, which was the largest source of outbound tourists in 2019, is expected to boost the global tourism recovery. The impact of this will depend on air travel costs, visa policies, and COVID-19 measures in destination countries. By mid-January, 32 countries had imposed travel restrictions for travelers coming from China, primarily in Asia and Europe.

Airlines will edge closer to profit

The major airlines in the US reduced their costs during the pandemic by reducing their workforce, adjusting their aircraft fleet, and taking on significant debt. These companies also received substantial government aid, particularly in North America, Europe, and Asia, amounting to a total of $243 billion in 2021.

The International Air Transport Association (IATA) projects that the international air transport industry will incur a combined net loss of $9.7 billion in 2022, following losses of about $180 billion in 2020-2021. Despite the ongoing economic challenges, IATA believes that airlines may head towards profitability if travel demand returns as anticipated.

The major risk for the industry is fuel costs, as although oil prices have recently declined, they are quoted in US dollars, and the US dollar is appreciating against most other currencies. This means that US-based airlines have the best chances of being profitable in 2023, while airlines in other regions will face difficulties.

US Airlines will edge closer to profit

The impact of climate change

The effects of climate change are already starting to be felt in key tourist destinations, as ski resorts face a lack of snow and summer resorts experience droughts and wildfires. This trend is likely to become even clearer in 2023 if extreme weather events continue to occur.

Tourists’ growing concern for the environment may also impact their travel plans in 2023. A survey by the European Investment Bank found that 37% of Chinese, 22% of European, and 22% of American travelers are avoiding air travel due to climate change. Some who still wish to travel may opt for more eco-friendly options or be willing to pay more for carbon offsetting. Regulators will also ramp up pressure on the industry to reduce emissions. In 2023, the voluntary pilot phase of the Carbon Offsetting and Reduction Scheme for International Aviation will conclude, and 8 more countries, including Cambodia, Cuba, and Zimbabwe, will join, bringing the total number of participating states to reduce emissions from international flights to 115.

Other predictions

International tourism receipts have seen significant growth in most destinations, surpassing arrival increases in some cases. This growth can be attributed to extended stays, tourists’ willingness to spend more in their destination, and rising travel costs due to inflation. Despite this, the economic situation may result in a more cautious approach among tourists in 2023, leading to decreased spending, shorter trips, and more travel within proximity.

The UNWTO Confidence Index indicates a cautiously optimistic outlook for the January-April period, surpassing the same period in 2022. This positive outlook is supported by the recent easing of restrictions in Asia and robust spending figures in 2022 from established and developing tourist markets, with countries such as France, Germany, Italy, Qatar, India, and Saudi Arabia exhibiting remarkable performance.