The industry can be “cautiously optimistic” about the global outlook for travel and tourism despite “significant economic uncertainty”.
That is according to David Goodger, managing director for Europe of Tourism Economics – part of economic forecaster Oxford Economics – who asserted: “Travel is returning to normal trends.”
Speaking at the Resilience and Innovation Summit in Sarajevo, Goodger noted: “International travel just about recovered to the 2019 level in 2023 and we expect it to get there in 2024. Then we expect it to get back to its [previous] growth trend.”
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He explained: “We’re looking at fairly steady growth in incomes and spending in the major source markets [and] inflation is coming under control.”
But he added: “There are a lot of risks – interest rate risks, tensions in the Middle East, war between Russia and Ukraine, tension between China and Taiwan.” He suggested: “Trump being re-elected is a risk.”
Goodger warned: “We could see interest rates stay high and stagnation continue. There is still a squeeze on people’s budgets. People are spending more on living costs.”
However, he said: “We expect to see some economic growth and when we look at travel, we see spending on it prioritised.
“Across advanced economies, consumers spend on average about 8% of their discretionary income on leisure travel. That fell off a cliff in the pandemic but jumped back last year and all the indicators suggest that this year it could be above 8%.
“The source markets driving growth in international overnights in Europe are Germany, the UK 10% and the US. The key concerns are the costs of accommodation and the cost of flights. [But] we’re starting to talk again about ‘overtourism’. Visitors want to return to tourism hotspots and we’re going to see overcrowding.”
Goodger noted: “We see a slower recovery in leisure travel spending in developing markets, but we expect a recovery this year.”
He reported a gap in the volume of international travel to Southeast Europe compared with the immediate pre-pandemic period “when there was growth averaging about 10% a year between 2015 and 2019” and said: “There is some caution as to whether it will return to that rate.”
Yet he forecast 11% growth in international tourism to Bosnia and Herzegovina this year, although the country attracts only 1% of international visitors to the region. Greece attracts 40%, Croatia 20% and Bulgaria 10%.