Spotlight on travel industry: recovery underway
In a recent data report dedicated to the subject, the global payment company Mastercard confirms the gradual return of travel, more land- and less internationally-oriented. These are changes that African players in the sector will have to take into account.
Published in late June by the Mastercard Economics Institute, the research arm of the payment specialist, the report uses aggregate transaction data from the global Mastercard network to identify early trends in the travel recovery. A return to normalcy will not be «a straight line, however, [as] many countries and travel corridors continue to face significant challenges (slow vaccinations, new variants of COVID-19, destruction of jobs left by the pandemic…) », the authors of the report warn.
Nevertheless, a number of warning signs are already clear from the survey. Among these, the net increase in global gas spending, up 13% from its previous peak in 2019. In Africa in particular, « there are signs of recovery in some markets, for example in Nigeria and Egypt, where spending at gas stations is already exceeding the 2019 peaks, while in Kenya it is matching previous levels, » David Mann, chief economist of the Asia/Middle East-Africa division at Mastercard, was quoted as noting in the above-mentioned report. That trend confirms the return in force of road trips, because these land trips meet the desire to discover and escape, while favoring local tourism.
«Purchases reflecting potential travel plans and more in-person interactions »
Another key takeaway from the report is that the huge precautionary savings – accumulated from the start of the pandemic in 2020 and valued at $5 trillion globally, according to Mastercard – translated into increased purchases in certain categories reflecting potential travel plans and more in-person interactions at the time of reopening. The report cites increased bike store sales (+62%), higher Toupee and wig store sales (+75%), and growth in product categories like beauty shops and luggage.
« International travel has a long way to go before reaching pre-pandemic levels »
However, «International travel has a long way to go before reaching pre-pandemic levels, », authors of the Mastercard report stress, noting also that ” global business travel lags even farther,” with business travel lags leisure travel by only about four months.
But there are signs of hope: in African markets such as Egypt, Nigeria and Kenya, the report notes an increase in international flight bookings, although they are still at a fraction of pre-pandemic levels. Another development highlighted by the analysis of flight bookings is the recovery in domestic flights. Cited by the Mastercard Economics Institute, South Africa, for example, has seen a strong recovery in domestic flights, which now account for 56.7% of all domestic air activity, up from 40.9% in 2019. This should boost certain travel corridors in the long term, with the reopening of borders encouraging, among other things, travel to Egypt (read the article Tourism, Time for recovery!), as the report’s data show.
«Preparing and creating the right experiences for consumers eager to travel once again»
In the end, the Mastercard Economics Institute teams call on businesses and governments to use the indicators that can at least provide some measured insights into travel’s horizon “to prepare for and create the right experiences for consumers eager to travel again.” They, however, acknowledged that undoubtedly «the road to travel recovery will be bumpy.”Clearly, the challenges have only just begun…
Read the full Recovery Insights : Ready for Takeoff here (English)