Travel is back, but not all travelers are more welcome.
After a two-year dormancy caused by the pandemic, the travel industry was revived in full force this summer. With the easing of pandemic-era restrictions and years of pent-up travel demand, international tourism saw a 182% increase in the first three months of 2022 compared to the same period last year, according to the UN World Tourism Organization -‘s.
The 2022 travel boom has continued into the summer, particularly in European travel hotspots, where EU officials say up to 70% of pre-pandemic travel demand will recover this year.
But after falling profits and many layoffs during the pandemic, the travel industry is taking on only the wealthiest travelers to help replenish its coffers, and combined with rising inflation in many countries driving up fuel costs, ever and more airlines and travel destinations are deciding to ditch a key component of the pre-pandemic tourism economy: budget travel.
The end of cheap travel?
Even the airlines known for starting the low-cost travel revolution feel that budget tourism won’t be as sustainable as it once was for the foreseeable future.
“There’s no doubt that at the end of the market, our really cheap promotional rates – one euro rates, €0.99 rates, even €9.99 rates – I think you’re not going to see those rates for the next few years. Michael O’Leary, CEO of Irish airline Ryanair, which pioneered the low-cost, non-stop travel model in Europe, told BBC Radio 4’s Today program this week.
Ryanair did once offer £10 flights across Europe (about $12), but O’Leary suggested it will be some time before customers can expect a return on those fees, citing rising costs of fuel.
O’Leary added that the average airline fare is likely to rise from 40 euros to about 50 euros (about $52) over the next five years, roughly in line with fares offered by competitors. About a quarter of UK fares offered by Swiss low-cost airline EasyJet are still available for under £50 (about $61), a company spokesman said. wealth.
However, despite higher fares and fewer budget options, O’Leary said he expects interest in travel to remain at steady levels.
“We think people will continue to fly frequently. But I think people will become much more price sensitive,” he said.
Travel hotspots turn to more affluent customers
It’s not just airlines that don’t invite budget travelers. Even destinations once considered budget tourism hotspots are marketing themselves primarily to wealthier tourists as they reopen to travel for the first time in years.
New Zealand – which used one of the strictest sets of entry restrictions in the world for much of the pandemic – finally reopened its borders to international tourists in late July, but some tourists are more welcome than others.
Stuart Nash, New Zealand’s tourism minister, clarified this week that the country would target “high quality” and “big spender” tourists rather than the backpackers and budget travelers who flocked to the country before the pandemic for the scenery. its natural and friendly culture. .
“We will welcome backpackers… [but] we’re not going to target people who post on Facebook how they can travel around our country on $10 a day eating two-minute noodles,” Nash said.
Thailand – where tourism supplied a fifth of the country’s GDP and 20% of employment before the pandemic – has also been looking to move away from budget travel and more towards offering luxury travel experiences to wealthy visitors as it tries to jump-start the industry its tourism.
Last month, Deputy Prime Minister Anutin Charnvirakul told tour operators at an industry event that they should look to “sell premium” and focus on high-end experiences for wealthier tourists, while he discouraged discount programs at hotels and businesses that would attract more budget. conscious travelers.
“We cannot allow people to come to Thailand and say because it is cheap,” he added.
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