What to expect from travel in 2023 and beyond, and how to snag good deals despite higher airfares
15 May 2023
The Straits Times
SINGAPORE – Singaporean Namiki Kim Kit, married to a Japanese man, has been flying to Tokyo every one to two months, even throughout the pandemic.
But never has the 48-year-old lawyer waited as long as the 90 minutes it took for immigration and security clearance at Narita Airport during a trip in April. This is more than double the usual wait time, she says.
Japan, the darling of travellers worldwide, felt the impact of revenge travel during cherry blossom season in April.
Others who spoke to The Straits Times report waiting more than an hour to leave or enter the country via Tokyo and Osaka.
This was even though visitor arrivals remained 35 to 45 per cent lower than pre-pandemic figures, based on estimates from the Japan National Tourism Organisation.
The country is not alone. With the pandemic in the rearview mirror, countries around the world have spent the past year or so grappling with the highs and lows of travel recovery.
Europe was saddled with the “summer of lost baggage” in 2022, though the airport chaos has since calmed down. Meanwhile, the Asia-Pacific region is gearing up for an influx of Chinese tourists.
Globally, travel has recovered to three-quarters of 2019 levels, with the Asia-Pacific trailing at about 50 per cent, estimates economic forecasting firm Oxford Economics. The firm believes that a full recovery will take place by 2024 in Europe and North America, and by 2025 for the Asia-Pacific.
The World Tourism Organization is more optimistic, forecasting that international tourism could reach 80 to 95 per cent of pre-pandemic levels in 2023.
What does all this mean for the leisure traveller? The Straits Times speaks to industry experts to find out.
Airfare hikes have mellowed, but higher prices are here to stay
The 2022 spike in airfare, up by about 25 to 30 per cent from before the pandemic, has mellowed somewhat.
Aviation analytics company Cirium estimates that global flight prices are now about 10 per cent higher compared with 2019.
This means travellers who plan ahead can bag reasonable fares. Think $500 for a round-trip budget flight to Perth, or less than $150 for one to Penang.
Singapore Airlines (SIA) and Scoot have brought back regular deals, competing for brand-agnostic customers who just want the cheapest ticket.
As airlines ramp up supply by bringing pilots and aircraft back, the eye-watering fares endured by travellers in 2022 – such as $2,900 for an off-peak round-trip ticket to London on SIA – should become a thing of the past.
But do not count on prices tumbling further. Oil prices, the single greatest cost to airlines, remain about 50 per cent higher than in 2019 and are unlikely to come down while the Russian invasion of Ukraine persists.
The industry’s shift towards sustainable aviation fuel will also drive up costs. Many major players – including Finnair, Qatar Airways, British Airways and SIA – have begun blending it with regular jet fuel.
The 300 or so member airlines of the International Air Transport Association – responsible for 83 per cent of the world’s air traffic – have committed to achieving net-zero carbon emissions from their operations by 2050.
None of this comes cheap, with sustainable aviation fuel priced as much as five times more than regular fuel.
How much of these costs will airlines pass on to customers? Only market conditions will tell.
Tourist spots heat up
With China a major source market for many Asia-Pacific countries, one can expect crowds to grow in its neighbouring destinations such as Japan, Taiwan and South Korea as travel picks up over the coming months.
Like the rest of the world when borders first reopened, Chinese travellers are venturing cautiously towards cities close to home after the country lifted quarantine requirements in January. Top destinations for Chinese travellers in the first quarter of 2023 were Hong Kong, Macau and Thailand, based on Cirium data.
More recently, international flights from China hit 40 per cent of 2019 levels over the May Day long weekend, according to China-headquartered booking platform Trip.com.
But with supply lagging and the prices of outbound flights from China still high, the influx of Chinese travellers can best be described as a stream, rather than a wave.
Meanwhile, the rest of the world continues to flock to popular tourist spots.
Cities such as Barcelona, Venice and Kyoto must once more contend with the drawbacks of overtourism and the higher prices that come with it.
To avoid this, sidestep the beaten track. Booking.com’s regional director for South Asia Pacific, Mr Nuno Guerreiro suggests travelling to alternative cities during off-peak seasons. Think up-and-coming destinations such as Ninh Binh and Phu Quoc in Vietnam, or Lombok and Nusa Penida instead of Bali.
This is something 58 per cent of Asia-Pacific travellers will consider as a way to save costs, according to the company’s Travel Predictions 2023 report.
Industry still plagued by manpower crunch
The tourism industry never fully recovered from the manpower exodus during the pandemic. Some workers were laid off, while others left for less onerous jobs with shorter hours.
Hospitality players must now find new ways to cope, such as dialling back housekeeping services to lighten the load on staff.
Marriott hotels revised its housekeeping service and now offers this daily only at its luxury brands, such as the Ritz-Carlton and W Hotels. Guests staying at a premium brand, such as Sheraton or Le Meridien, get this only every other day.
Meanwhile, mid-tier properties such as Holiday Inn offer bathroom amenities only on request, while Thailand’s Asai Hotels place these at the lobby for guests to help themselves to.
This comes amid higher hotel prices as properties pass on rising labour, operational and inflationary costs to customers, says Mr Guerreiro.
Other sectors of tourism have also suffered.
Japan has had at least 20 per cent fewer airport security inspectors since the height of the pandemic, reported The Japan Times – perhaps a factor in the country’s recent airport congestion.
Flying out of Osaka’s Kansai airport in April, Mrs Belinda Sun, 35, waited 75 minutes for check-in and security clearance, a dampening end to her 37-day jaunt around the country with her husband.
It is perhaps unfair to train the spotlight on Japan when airports in Europe and North America experienced disruption in 2022. But, as one of the last few countries to reopen to leisure travel, it has had time to learn lessons from those who have gone before.
Mr James Lambert, director of Economic Consulting, Asia of Oxford Economics, says this will be key for travel players hoping to cash in on the Chinese dollar.
“There is opportunity for countries and companies to study where supply constraints diminished the industry previously and make sure the same thing doesn’t happen to them,” he says.
What’s next after revenge travel?
“Revenge travel” has been blamed for everything from travel delays to oversold flights in the past year or so. When will it normalise?
Mr Lambert believes this will happen in the next year or two. Still, travel will remain a priority for two-thirds of Singapore-based folks even as they temper their spending in the light of rising inflation, reports Booking.com.
This is in line with global trends.
Expedia’s 2023 Vacation Deprivation study reveals that two-thirds of respondents would rather cut back on expenses like grocery bills and dining out than postpone a holiday.
There seems to be little else but to accept that travel, as a whole, may never go back to pre-pandemic prices.
Industry players agree that those who want a good deal must be prepared to plan ahead and make advance bookings for flights, hotels and attractions.
Ms Lavinia Rajaram, director of public relations in Asia and corporate communications for Expedia Brands, does not rule out the odd last-minute discount, but says booking when supply is higher will usually bag one better deals.
Whatever travellers lose in spontaneity, they will gain in cost savings and a longer runway to savour the anticipation of the next trip.
Source: The Straits Times © SPH Media Limited. Reproduced with permission.
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