Airfares are Soaring, but so is Travel

The World Travel & Tourism Council (WTTC) and data agency ForwardKeys, are forecasting a major increase in global international flights bookings as international travel takes off. The proclamation rendered at the annual WTTC conference a few weeks ago in Manila came as no surprise to travelers and travel advisors who are watching this wild and chaotic period unfold in real time. 

As the travel industry’s recovery picks up speed, the U.S. Consumer Price Index airline fare index in April rose a steep 18.6 % from March levels, the largest one-month increase since the inception of the series in 1963, according to the U.S. Bureau of Labor Statistics. Further, the index for airline fares rose 33.3 % over the past year, the largest 12-month increase since the period ending December 1980.

However, despite the higher ticket fares, demand for air travel is expected to be strong this summer, outstripping supply and surpassing even 2019 levels, according to several carriers’ first-quarter earnings reports. 

News of the strong recovery highlights a promising prospect ahead for summer holiday travel, with sun and sea destinations, such as the Caribbean and Latin America, leading the international inbound bookings.

According to ForwardKeys, the top 20 best performing destinations for the summer are Costa Rica, Aruba, Dominican Republic, and Jamaica, all of which rely heavily upon international travel.

These destinations lead the pack with bookings already surpassing pre-pandemic levels.

Last year, the industry’s gradual recovery was significantly slowed by the surge in Omicron cases. However, the future is looking brighter for 2022 with positive booking data worldwide.

“Travel to the Asia-Pacific region shows impressive signs of improvement as destinations gradually reopen their borders to visitors, in line with customer demand,” added Julia Simpson, WTTC President & CEO.

According to the data, Q1 and Q2 figures for this year are showing triple-digit growth for inbound flight bookings around the world, compared to last year, including the Americas, Europe, and Asia.

Travelers are eager to spend more on travel following the loosening of restrictions, with heightened demand for premium cabin classes in 2022. Other trends seen include stronger last-minute bookings.

Further evidence of the resurgence in travel is shown in arrivals in Europe, with a massive 350% surge in international arrivals for Q1 in 2022 compared to last year.

Asia-Pacific countries also saw an increase in arrivals for Q1 of this year compared to 2021, with bookings for the region up 275%.

In Q2 we see further acceleration of the continuing recovery with a significant rise in international bookings, which have soared by 264% on the year before.

This acceleration is particularly notable in Asia where travel restrictions are being removed. 

In Europe, destinations such as Iceland, Greece, Portugal, Spain and France are showing a strong resurgence with travel bookings just slightly behind pre-pandemic levels.

Africa and the Middle East also feature in the top 20 list with Tanzania, Qatar and Egypt also reaching close to pre-pandemic levels of travel.

Meanwhile, closer to home in Mexico, Los Cabos Tourism Board is citing a record 13% growth in domestic and international visitors during the first quarter of 2022, a historic increase fueled largely by the destination’s swift response to the pandemic and strict health and safety protocols enforced over the last two years. 

“As a destination that has been challenged over the past few years by the pandemic and international tourism restrictions, we are glad to see tremendous growth driven by our unique business model and the demand among travelers for exclusive and authentic travel experiences,” said Rodrigo Esponda, Managing Director of the Los Cabos Tourism Board. “The pandemic gave us the opportunity to elevate our tourism offering, create new ways of working with our partners, and fine-tune our business model.”

The United States is Los Cabos’ top priority market and American travelers represented about 98% of all international travelers that visited Los Cabos in 2021, defying national trends by driving a 5.4% growth in visitation from the market. The growth in tourist arrivals led to an expansion of the Los Cabos International Airport which will increase connectivity with the United States by 30% to accommodate the steady demand of American travelers. Today, Los Cabos has over 500 weekly flights connecting 26 cities in the United States with the destination. A projected growth of 1.3 million seats is expected to be added during the first half of 2022.

Among the key statistics noted by Esponda: 

– Over 325,000 travelers in March 2022, a record visitation representing an 18% increase when compared to 2019.

– 70% average hotel occupancy in Q1 of 2022, with an average hotel daily rate of US$455, the highest in Mexico.

– 5.4% increase of United States travelers in 2021 when compared to 2019, surpassing arrivals of international travelers nationwide and leading the recovery of international travel.

– 31.6% projected increase in seats to Los Cabos from the United States over the next six months when compared to 2019. Air connectivity is increasing mainly from Los Angeles, Phoenix, Houston, Dallas, Denver and New York.

– Close to 80% growth in arrivals of international travelers via private aviation in 2021 when compared to 2019, representing 26% of all air travel activity.

– 98% of all international travelers come from the United States, Los Cabos’ priority market.