What good is a ‘throwback’ piece, if it doesn’t present some key learnings from the year gone by and highlights the trends that dominated headlines. Even as we get set to welcome 2022, the Omicron variant has, once again, brought back the ‘alert mode’ for travel. ForwardKeys, the travel analytics firm, in its report, reviews the year gone by.
Long-haul travel declines
A combination of several factors, including the effective closure of Asia Pacific, increased cost, the difficulty of travelling long haul during the pandemic, and frequently changing travel regulations, have deterred people from booking long-haul travel, which is typically booked and planned with much longer lead times.
In 2019, the ratio of intra-regional to extra-regional travel was 56 per cent:44 per cent; but in 2021, that had changed to 62 per cent:38 per cent. The pattern has also changed, with a greater proportion of people within Europe and the Americas travelling intra-regionally rather than the long haul.
Domestic travel rules the roost, particularly in large-sized countries
While there has been a shift away from long-haul travel during the pandemic countries have not been able to impose equally stiff constraints on their own populations. Consequently, there has been a relative rise in domestic travel, particularly in geographically large countries such as Brazil, China, Russia, and the USA, where it is possible to fly for a few hours without crossing the border.
In China, domestic travel volumes returned to pre-pandemic levels as early as September 2020; however, they fell back in January and again in August, owing to a resurgence in Covid cases. In Brazil, Russia, the US, and China, domestic travel rose respectively to 148 per cent, 128 per cent, 87 per cent, and 76 per cent of pre-pandemic levels in the second half of 2021, compared to 50 per cent, 28 per cent, 39 per cent, and 1 per cent for international travel.
The revival in the Middle East
Revival in the Middle East seems prominent as travel to various Middle East destinations exceeded the 60 per cent benchmark in H2. While Dubai held its position as the top city destination, and Doha overtook Dubai as an air transit hub, travel to Turkey climbed from 33 per cent in H1 to 67 per cent in H2 of pre-pandemic levels, and travel to Egypt grew from 37 per cent to 72 per cent.
Doha trumps Dubai and Amsterdam heads the hub list
Before the pandemic, the top 10 list of global hub airports was headed by Dubai with a 7.7 per cent market share of intercontinental flight connections. This was followed by Frankfurt, Amsterdam, Doha, Istanbul, Paris, Hong Kong, Munich, London, and Abu Dhabi.
In 2021, Amsterdam headed the list, with an 8.3 per cent share of intercontinental flight connections. Amsterdam is now followed by Frankfurt, 8.2 per cent, Istanbul, 6.8 per cent, Doha, 6.7 per cent, Dubai, 5.9 per cent, Paris, 5.0 per cent, Panama City, 3.5 per cent, Addis Ababa, 3.1 per cent, Munich, 2.9 per cent and Madrid, 2.4 per cent. Doha overtook Dubai to become the pre-eminent hub airport in the Middle East, connecting air traffic between South Asia, the Middle East, North America, and Sub-Saharan Africa. In Europe, Amsterdam closed the gap on Frankfurt for intra-European transits and connections with North America.
Analysis of monthly traffic in 2021 shows that Amsterdam briefly overtook Frankfurt in September and October, but it fell back in November. In the same month, Dubai recovered its lead over Doha for the first time since February.
Wings clipped for major European airlines
An analysis of the top 20 airlines in 2021 compared to 2019, reflects that major European carriers have fallen or are out of the ranking; and have been replaced by airlines that have substantial business in China and the US. Ryanair and EasyJet, the two largest European carriers, have fallen from 5th and 8th position respectively, to 7th and 16th.
Lufthansa, British Airways, and Air France, Europe’s largest legacy carriers, have fallen out of the top 20 list, as have Emirates and Air Canada. They have been replaced by Shenzhen, JetBlue, Spirit, Hainan, and Xiamen. Largely due to the trend towards domestic travel in large countries, airlines in those markets have managed to weather the Covid-19 storm better than carriers whose business has been more oriented towards short-haul international travel.
US leisure travel drives recovery, not China
A comparison of the world’s top destination cities, before the pandemic in 2019, and throughout 2021, illustrates the strong trend towards leisure travel leading to the recovery. Several major cities have been pushed down or out of the top 20 rankings, whereas, the major leisure destinations, particularly for US holidaymakers, have climbed high.
While Dubai remains at the top of the list (it is a major leisure destination as well as a substantial travel and commerce hub), Miami has gone up from 18th to 5th, Madrid from 16th to 10th, and new into the list, Cancun (Mexico) ranks second, while Cairo (Egypt) occupies the ninth position. The two highest risers, Cancun, and Miami are both major leisure destinations popular with US holidaymakers.
Most of the new entrants lower down the list are also leading leisure destinations, popular with European holidaymakers. Major pre-pandemic destinations, which have fallen out of the top 20 list include 10 major cities: Bangkok, Tokyo, Seoul, Singapore, Hong Kong, Taipei, Shanghai, Jeddah, Los Angeles. and Osaka.
Mexico, Central America, the Caribbean, and Africa are the most resilient
A review of worldwide travel in 2021, broken down by region, reveals the extent to which international travel was paralysed. Even as overall, international air travel was just over a quarter (26 per cent) of its pre-pandemic level, the Asia Pacific region reached just 8 per cent; whereas Europe achieved 30 per cent, Africa & the Middle East 36 per cent and the Americas 40 per cent. While the recovery in global international travel was extremely uneven, some countries were much more resilient to the impact of Covid-19 on travel than others.
The stand-out destinations, which best maintained their visitor numbers were Central America, particularly El Salvador and Belize, and the Caribbean – all holiday hotspots for US tourists. Many of them managed to record visitation rates above 60 per cent of 2019 levels throughout the year. The same degree of travel resilience was true of around two dozen countries in Africa. However, their level of resilience is a little less noteworthy because many of them have economies that are much less dependent on tourism.
The variant threat continues to loom large
A chart plotting recovery in air travel shows relatively steady growth from the first quarter of 2021, when traffic was less than 20 per cent of 2019 levels, to the fourth quarter, when it had climbed to over 50 per cent. However, there were two setbacks -the first began during the week of March 12, when the growth in weekly bookings turned from +11 per cent to -10 per cent, as the Delta variant began to sweep around the world.
The second began in the last week of October when weekly bookings reached their highest point, 64 per cent of the same week in 2019. Bookings have been slowing down ever since; and in late November, they were down to 54 per cent of 2019 levels, which was closely correlated with a fresh rise in Covid-19 cases since late October. The emergence of the new Omicron variant, and the travel restrictions introduced in response, have inhibited demand.
Calling 2021 a year of travel recovery, Olivier Ponti, VP of Insights at ForwardKeys, said, “The recovery has been bumpy and patchy, with many established destinations displaced and several tourism-dependent destinations making valiant efforts to retain the patronage of leisure travellers. It has also been a tug of war between a strong pent-up demand to travel on the one hand and travel restrictions, imposed by governments to inhibit the spread of Covid-19 on the other.”