The average spend by air visitors to Mexico is up by 6.5% in 2021 compared to the same seven months of 2019.
According to INEGI (Mexico’s National Institute of Statistics, Geography, and Informatics) the average spend by visitors arriving by air to Mexico has increased by 6.5% from US$1,018.09 for the first seven months of 2019 to US$1,084.27 for the first seven months of 2021.
Typically, visitors arriving by air make up 20% of all visitors travelling to Mexico (both by air and by land) but constitute 80% of all tourist spending.
The average spend by air visitors increased substantially in June 2021 (up 24.2%) and in July 2021 (up 14.9%), both compared with the same months of 2019.
The number of visitors arriving by air has shown steady growth since February 2021 and in July Mexico received 1,627,534 visitors arriving by air 94.0% of the 1,731,225 air visitors seen in July 2019.
With the higher average spend per air visitor Mexico saw the total spend by air visitors reach US$1.661 billion in June and US$1.871 billion in July 2021, 6.6% and 8.0% respectively higher than the total spend by air visitors seen in June and July 2019.
While the total spend by air visitors for the first seven months of 2021 was US$8.135 billion, down 34% compared with the US$12.355 billion achieved in the first seven months of 2019, visitor spending is at least trending in a positive direction.
Monthly trip searches were up 70% over the summer compared to earlier in the year according to Expedia Group Media Solutions Q2 Travel Recovery Trend Report, and the company reported seeing positive signals continue into the fall.
For full report click here
Cruise News Update
So is it all going to plan as cruise lines continue to move forward on resuming cruise operations? Well for Carnival Cruise Line it doesn’t seem to be so smooth. We’ve got updates on the next batch of Carnival ships that are restarting, protocol changes from Carnival and Disney Cruise Line.
And even P&O Cruises planning to have two ships in the Caribbean before the end of the year along with a big day for Royal Caribbean’s Oasis of the Seas, which is restarting operations. Plenty to get through.
Five Carnival Ships to Restart Through November and December
So let’s start with the big news from the week with Carnival Cruise Line announcing which ships will be resuming operations through November and December. It’s not all gone to plan as just five Carnival ships will return through the two months. The fleet won’t be fully back in action before the end of the year which was the first hope.
Carnival Valor will follow Carnival Glory in New Orleans with four- and five-night sailings starting on Nov. 1;
Carnival Legend will restart Nov. 14 out of Baltimore, replacing Carnival Pride, which restarts guest operations from Baltimore Sept. 12 and then moves its homeport to Tampa following a Panama Canal repositioning cruise;
Carnival Radiance will have a new maiden voyage date of Dec. 13 out of Long Beach (rescheduled from Nov. 5 due to a revised dry dock transformation plan);
Carnival Pride’s new service from Tampa is scheduled to start on Nov. 14;
Carnival Conquest’s restart from Miami on Oct. 8 has been rescheduled to Dec. 13;
Carnival Sensation’s Oct. 21 restart from Mobile has been moved to Jan. 2022
Five vessels in total will return in 2022, including Carnival Liberty out of Port Canaveral, Carnival Sunshine from Charleston, Carnival Paradise from Tampa, Carnival Ecstasy out of Jacksonville, and Carnival Sensation out of Mobile. That does mean further cancellations as those ships remain on hold longer than expected.
Carnival Splendor and Carnival Spirit, based out of Australia, are to remain on hold through December 16 as the cruise line continues to work with the government on a safe return down under.
Carnival Cruise Line Updates Protocols
Carnival Cruise Line also provides an update on its protocols to align more with recent updates by the U.S. Centers for Disease Control and Prevention (CDC) and new rapid testing sites at all of its homeports.
The cruise line will continue to follow CDC guidelines to make sure guests and crew remain safe. Guests will have to present proof of vaccination and a negative test at check-in, something which is already in place for current departures.
However, Carnival plans to make it easier by setting up mobile pre-cruise rapid testing sites at all of its homeports. The full details are still to come, but this will make it easier for those struggling to get tested before their cruise.
On August 29, 2021, the CDC updated its Conditional Sailing Order, including adjustments to testing, which now needs to be completed within two days before sailing rather than the previous three days. Carnival now says, “Effective with sailings as of September 13, 2021, the CDC requires pre-cruise testing for vaccinated guests to be taken within two days prior to the sailing date. If the sailing is on Saturday, the test may be taken on Thursday and Friday, and as late as Saturday, if you are guaranteed to receive your results in time for check-in.”
Two P&O Cruise Ships to Sail the Caribbean
P&O Cruises plans to have two ships sailing the Caribbean before the end of the year. The cruise line has experienced a hugely successful summer return with the launch of its newest flagship Iona and its popular summer seacations onboard Britannia. The cruise line is ready to expand its cruises and has chosen to do this in the Caribbean with Britannia and Azura.
Britannia will set off on her transatlantic voyage from Southampton in southern England on October 22. The vessel will take 14 days to sail to the Southern Caribbean island of Barbados before she starts the first of a series of 14-day cruises in the Caribbean.
Azura will be the second ship sailing the Caribbean for the UK-based cruise line. Starting December 10, the cruise ship will also be sailing from Barbados on 14-day itineraries that include ports of call such as Trinidad and Tobago, Aruba, Bonaire, Dominica, and Martinique.
P&O Cruises are not yet sailing with the entire fleet and will not do so this year. Aurora is currently scheduled to return in February of next year and Arcadia is scheduled to return to sailing in March of next year.
Plenty to look forward to and this will be the first chance British cruisers will be able to enjoy a cruise in the Caribbean since the suspension started in 2020.
Disney Wonder Restart Announced
Disney Cruise Line has announced the restart date for Disney Wonder and an update to its protocols. The ship will start operations on October 1 on an itinerary that will feature three-night sailings from San Diego with a stop at Ensenada, Mexico, and a day at sea, while 4-night sailings will feature two days at sea and a stop at Cabo San Lucas, Mexico.
Disney Cruise Line has returned to the U.S. with Disney Dream’s 3- and 4-night itineraries out of Florida. Disney Fantasy will resume on September 11. The cruise line will only be visiting Castaway Cay for the time being with both ships.
However, the recent policy changes from the Bahamian government mean that the cruise line had to require all guests to be vaccinated on cruises to the Bahamas, just like other cruise lines. It’s also due to updated guidelines issued on August 27, 2021, from the U.S. Centers For Disease Control and Prevention (CDC).
For cruises departing from San Diego in October, Disney Cruise Line now requires all guests of 12 years and older to be fully vaccinated 14 days before boarding. Guests 11 years old and younger do not have to be vaccinated but should provide proof of a negative test. On November 5, Disney Wonder will depart for a 14-day voyage that will take guests through the Panama Canal to Galveston from San Diego. Disney has made some significant changes for this voyage, requiring all guests of all ages to be fully vaccinated.
One more health policy change for guests onboard for cruises to the Bahamas between September 3 and November 1. The Bahamas requires all cruise ship passengers to be fully vaccinated or provide a negative PCR test if 11 years or younger. To comply, Disney Cruise Line has now said that all guests 12 years and older should be fully vaccinated with an approved vaccine.
On and after September 13 all guests of all ages, whether vaccinated or not, are required to take a test administered at the terminal before embarkation.
With so many changes depending on where ships are departing from, do make sure you check the cruise line site for all the details before your cruise so you don’t miss any adjustments.
Oasis of the Seas Restarting Operations
Royal Caribbean’s Oasis of the Seas is finally restarting cruise operations and will be the first to do so out of the Cape Liberty Cruise Port in Bayonne, New Jersey. So the cruise ship is departing on September 5 on a seven-night Bahamas sailing including calls at Port Canaveral, Florida; the cruise line’s private island of Perfect Day at CocoCay, Bahamas; and Nassau, also in the Bahamas. The ship will arrive back in New Jersey on September 12.
Oasis of the Seas will continue to sail seven-night Bahamas cruises and will also begin seven-night Eastern and Western Caribbean cruises from Miami in November 2021. Including Oasis of the Seas, 14 Royal Caribbean ships have restarted operations which is more than half the fleet. Liberty fo the Seas will be next with cruises from Galveston, Texas starting on October 3.
Carnival Glory Cruise Cancelled
With Hurricane Ida having a huge impact on New Orleans, Carnival Cruise Line has canceled Carnival Glory’s September 5th departure. The main reason was at the time, the city was still under emergency management and the channel leading towards the cruise terminal remained closed.
Carnival Glory’s first return cruise from New Orleans was scheduled to depart on September 5 on a seven-day voyage, including calls at Bimini, Freeport, and Nassau, all in the Bahamas. The ship will now restart from the Port of New Orleans on Sunday, September 12.
Carnival is allowing impacted guests to transfer to the Carnival Vista sailing departing the Port of Galveston in Texas on Saturday, September 4, 2021. Guests will have to be fully vaccinated to be allowed to transfer. Unfortunately, those under the vaccine exemption won’t be allowed to transfer their booking to the Carnival Vista but are being asked to contact Carnival about their options.
Since the cancellation was first announced, the Carnival Glory has already returned to the port and is currently making preparations for its restart on September 12. That cruise will be a seven-day Western Caribbean itinerary with stops at Mahogany Bay, Belize, and Cozumel, along with three sea days. The Conquest-class vessel will become the ninth ship in the fleet to resume operations and the first out of New Orleans since suspensions first began in March 2020.
By Jill Menze, PhocusWire Sep 04, 2021
Travel brands eager to engage with young consumers have for years focused on one key segment: millennials.
Cut to 2021, and many of those consumers -- now climbing in age between 25 and 40 -- are balancing the costs of families and mortgages on top of extracurricular spending.
And while millennials still hold significant spending power, their young-adult status has been eclipsed by a new generation, one that doesn't know a world without internet and will be critical to the travel industry's recovery from the coronavirus pandemic.
To capture the attention -- and dollars -- of Generation Z, travel providers need to understand how the generation's distinct preferences and attitudes influence their travel planning and spending habits.
The OTA effect
According to Expedia Group, nearly two-thirds of Gen Z travelers, defined as those born between 1997 and 2012, are planning "revenge travel" to make up for lost trips amid the Covid-19 crisis.
To plan their travel, Expedia Group finds that Gen Z consumers are turning to online travel sources, specifically online travel agencies, 31% more than they were prior to the pandemic.
"This very much aligns with Gen Z's position as the first digitally native generation," said Monya Mandich, vice president of Expedia Group Media Solutions Marketing.
"They are frequent mobile users and digital content consumers, so turning to online resources for trip inspiration and planning makes sense with their overall behaviors and preferences, and we expect this reliance on digital will continue in the years ahead."
Similarly, the Phocuswright Research report Gen Z Travelers: A Breed of Their Own revealed that when it comes to planning travel online, Gen Z travelers prefer OTAs for their dynamic packages and loyalty programs.
According to the report, more Gen Z travelers booked air, hotel and car via an OTA than any other online channel like direct websites, metasearch or retail travel agent websites. In fact, more than one in three Gen Z travelers booked a dynamic package in 2020, the highest occurrence of any generation.
Although Gen Z travelers are the least likely to be loyalty members overall (according to Phocuswright, 28% have no travel loyalty memberships), OTA loyalty enrollment is higher among the segment than nearly all other generations: 28% of Gen Z travelers are OTA loyalty members, trailing closely behind an OTA membership rate of 33% among millennials.
Gen Z travelers are also more likely to reach the upper echelons of status in OTA loyalty membership programs compared to their status tiers in frequent flier or hotel loyalty programs.
"Our research has long shown that younger travelers have a stronger affinity to OTAs in general for planning and booking, since they tend to be more price-sensitive and brand-agnostic. Thus, in line with that, they would use the OTAs more to book multiple trips than a single supplier brand," said Phocuswright research director Alice Jong.
Beyond OTAs, Phocuswright found that Gen Z travelers are more open to other intermediary options such as booking via Google or travel subscriptions.
Though their use of Google Travel's booking function is still low compared to other channels, nearly one in 10 Gen Z travelers reserved a hotel room in 2020 through Google's booking function.
Meanwhile, 46% of Gen Z travelers -- who are accustomed to subscription services like Amazon Prime and Netflix -- say they are likely to spend up to $100 annually to join a travel subscription service.
The Gen Z future
Not only do Gen Z travelers have unique planning and booking habits, but they also have distinct travel priorities and preferences.
According to Expedia Group, themes like inclusion and diversity, as well as a growing awareness of sustainability, are an increasingly important part of the travel conversation with younger consumers.
A recent survey from the online travel giant found that three in four Gen Z Americans are looking for the company they book travel through to value diversity and inclusion; Gen Z travelers also want to see the locals in the destination they're visiting value these ideals.
"Showcasing a commitment to inclusivity and sustainability comes down to authenticity and consistency, because consumer expectations in this space are growing, and especially important to younger travelers," Mandich said. "As younger consumers increasingly value inclusion and the industry continues to serve a more diverse customer base, destinations and travel brands must be part of that conversation."
On the sustainability front, a recent Expedia Group Travel Outlook found that Gen Z travelers are leading the charge in sustainable travel (67%) and are much more likely than other generations to consider sustainable travel options at least some of the time and are seeking out travel businesses that prioritize environmentally sustainable practices.
Safety and having unique experiences also top of mind among Gen Z travelers: According to a recent survey from GetYourGuide, 57% of Gen Z travelers said safety is their top concern surrounding travel plans.
Meanwhile, 38% of Gen Z consumers cited unique experiences as having the greatest impact on their favorite vacations. However, they are not budgeting as much for that element of their trip compared to other generations, with just 15% of Gen Z travelers saying they are budgeting $51 to $100 per person for each day of experiences on a trip.
Ultimately, over the past year, Gen Z travelers have "received heightened attention for their massive influence and growing buying power," Mandich said.
"As we think about the future of the travel industry, we have to expand our viewpoints and offerings to reach travelers of all ages and backgrounds, because younger generations are the travelers of today and tomorrow."
Bloomberg February 4, 2021, 5:00 PM AST Updated on February 5, 2021, 4:04 AM AST
As coronavirus vaccines started rolling out late last year, there was a palpable sense of excitement. People began browsing travel websites and airlines grew optimistic about flying again. Ryanair Holdings Plc even launched a “Jab & Go” campaign alongside images of 20-somethings on holiday, drinks in hand.
It’s not working out that way.
For a start, it isn’t clear the vaccines actually stop travelers spreading the disease, even if they’re less likely to catch it themselves. Neither are the shots proven against the more-infectious mutant strains that have startled governments from Australia to the U.K. into closing, rather than opening, borders. An ambitious push by carriers for digital health passports to replace the mandatory quarantines killing travel demand is also fraught with challenges and has yet to win over the World Health Organization.
This bleak reality has pushed back expectations of any meaningful recovery in global travel to 2022. That may be too late to save the many airlines with only a few months of cash remaining. And the delay threatens to kill the careers of hundreds of thousands of pilots, flight crew and airport workers who’ve already been out of work for close to a year. Rather than a return to worldwide connectivity -- one of the economic miracles of the jet era -- prolonged international isolation appears unavoidable.
“It’s very important for people to understand that at the moment, all we know about the vaccines is that they will very effectively reduce your risk of severe disease,” said Margaret Harris, a WHO spokesperson in Geneva. “We haven’t seen any evidence yet indicating whether or not they stop transmission.”
To be sure, it’s possible a travel rebound will happen on its own -- without the need for vaccine passports. Should jabs start to drive down infection and death rates, governments might gain enough confidence to roll back quarantines and other border curbs, and rely more on passengers’ pre-flight Covid-19 tests.
The United Arab Emirates, for example, has largely done away with entry restrictions, other than the need for a negative test. While U.K. regulators banned Ryanair’s “Jab & Go” ad as misleading, the discount airline’s chief Michael O’Leary still expects almost the entire population of Europe to be inoculated by the end of September. “That’s the point where we are released from these restrictions,” he said. “Short-haul travel will recover strongly and quickly.”
For now though, governments broadly remain skittish about welcoming international visitors and rules change at the slightest hint of trouble. Witness Australia, which slammed shut its borders with New Zealand last month after New Zealand reported one Covid-19 case in the community.
New Zealand and Australia, which have pursued a successful approach aimed at eliminating the virus, have both said their borders won’t fully open this year. Travel bubbles, meanwhile, such as one proposed between the Asian financial hubs of Singapore and Hong Kong, have yet to take hold. France on Sunday tightened rules on international travel while Canada is preparing to impose tougher quarantine measures.
“Air traffic and aviation is really way down the priority list for governments,” said Phil Seymour, president and head of advisory at U.K-based aviation services firm IBA Group Ltd. “It’s going to be a long haul out of this.”
The pace of vaccine rollouts is another sticking point.
While the rate of vaccinations has improved in the U.S. -- the world’s largest air-travel market before the virus struck -- inoculation programs have been far from aviation’s panacea. In some places, they’re just one more thing for people to squabble about. Vaccine nationalism in Europe has dissolved into a rows over supply and who should be protected first. The region is also fractured over whether a jab should be a ticket to unrestricted travel.
It all means a rebound in passenger air traffic “is probably a 2022 thing,” according to Joshua Ng, Singapore-based director at Alton Aviation Consultancy. Long-haul travel may not properly resume until 2023 or 2024, he predicts. The International Air Transport Association said this week that in a worst-case scenario, passenger traffic may only improve by 13% this year. Its official forecast for a 50% rebound was issued in December.
American Airlines Group Inc. on Wednesday warned 13,000 employees they could be laid off, many of them for the second time in six months.
At the end of 2020 “we fully believed that we would be looking at a summer schedule where we’d fly all of our airplanes and need the full strength of our team,” Chief Executive Officer Doug Parker and President Robert Isom told workers. “Regrettably, that is no longer the case.”
The lack of progress is clear in the skies. Commercial flights worldwide as of Feb. 1 wallowed at less than half pre-pandemic levels, according to OAG Aviation Worldwide Ltd. Scheduled services in major markets including the U.K., Brazil, Spain are still falling, the data show.
Persistent Flight Slump
Quarantines that lock up passengers upon arrival for weeks on end remain the great enemy of a real travel rebound. A better alternative, according to IATA, is a digital Travel Pass to store passengers’ vaccine and testing histories, allowing restrictions to be lifted. Many of the world’s largest airlines have rolled out apps from IATA and others, including Singapore Airlines Ltd., Emirates and British Airways.
“We need to be working on as many options as possible,” said Richard Treeves, British Airways’ head of business resilience. “We’re hopeful for integration on those apps and common standards.”
But even IATA recognizes there’s no guarantee every state will adopt its Travel Pass right away, if at all. There’s currently no consensus on vaccine passports within the 27-member European Union, with tourism-dependent countries like Greece and Portugal backing the idea and bigger members including France pushing back.
“We’re going to have a lack of harmony at the beginning,” Nick Careen, IATA’s senior vice president for passenger matters, said at a briefing last month. “None of it is ideal.”
The number of digital vaccine trackers has mushroomed
Product Test or Deployment
Travel Pass Singapore Air, Emirates, Qatar, British Airways
AOKpass Etihad, Alitalia
CommonPass Lufthansa, JetBlue, United, Virgin Atlantic
VeriFLY American, British Airways
Note: Selected airlines
The airline group has called on the WHO to determine that it is safe for inoculated people to fly without quarantining, in a bid to bolster the case for Travel Pass. But the global health body remains unmoved.
“At this point, all we can do is say, yes, you were vaccinated on this date with this vaccine and you had your booster -- if it’s a two-course vaccine -- on this date,” the WHO’s Harris said. “We’re working very hard to get a secure electronic system so people have that information. But at this point, that’s all it is. It’s a record.”
A vaccine passport wouldn’t be able to demonstrate the quality or durability of any protective immunity gleaned from being inoculated, or from being infected with virus naturally, either, Harris said.
“The idea that your natural immunity should be protective and that you could somehow use this as a way of saying ‘I’m good to travel’ is out completely.”
Doubts around vaccines mean aviation’s top priority should be a standardized testing regime, said IBA’s Seymour. This might involve a coronavirus test 72 hours before departure, 24 hours of isolation on arrival, and then another test before being released.
“If this was the world standard, then I think we would all be prepared to start picking holidays and fly away,” he said.
In 2020, tourism in the Caribbean Netherlands declined sharply due to the measures and flight restrictions as a result of the coronavirus pandemic. Because the islands are relying on various measures to ward off COVID-19, the upturn in tourism differs per island. In June 2021, tourism on Bonaire had already reached almost 75 percent of the level of June 2019. On Saba and St. Eustatius, it was 43 per cent and 33 per cent, respectively, of the level of June 2019. From the start of the pandemic up to and including June 2021, not a single cruise passenger has arrived on Bonaire. This is evident from new figures released by Statistics Netherlands (CBS). Please note the 2021 numbers are provisional and subject to change.
On Bonaire, tourism gradually increased from November 2020 but declined again in January 2021 and later in March due to government measures.
Since April 2021, tourism has picked up again from 3,400 visitors in April to 9,100 visitors in June. This increase can mainly be attributed to the fact that almost all airlines started flying again as they did in June 2019.
Due to the travel restrictions in place in many countries, the proportion of visitors with Dutch nationality increased significantly, from around 57 percent in 2019 to 75 percent in 2021. The share of visitors with US nationality decreased sharply, from 25 percent in 2019 to 9 percent in 2021.
Compared to 2020, tourism on Saba increased in the months of April, May and June. However, the number of visitors was still lower than before the coronavirus pandemic.
In June 2021, Saba attracted 300 visitors: 43 percent of the number in June 2019 (700 visitors). In the first three months of 2021, there were 100 visitors per month. This was due to strict entry restrictions on Saba, resulting in fewer flights to the island than before the coronavirus pandemic. On 1 May, Saba started reopening the island, which is reflected in the number of visitors.
St Eustatius links the relaxation of the restrictive measures for tourism to the vaccination rate of the population. In June 2021, there were 300 visitors, whereas in June 2019, there were still 900 people who visited St Eustatius. The proportion of visitors with Dutch nationality was 70 percent in 2021, versus approximately 50 percent in 2019. This can be explained by the fact that in the second phase of the reopening of St Eustatius, vaccinated residents of Saba, St Maarten, Aruba, Curaçao and Bonaire were admitted to the island without quarantine.
August 16, 2021
By Peggy Lee, Chariss Kok Xin, Hok Yean CHEE
Key Highlights in 2020
The Republic of Maldives is located in the Indian Ocean, southwest of Sri Lanka and India. The country comprises 1,192 coral islands, which are divided into 26 major island rings, known as atolls. For administrative purposes, these 26 atolls are organised into nineteen administrative districts across an area of 90,000 square kilometres in the Indian Ocean.
Famous for its natural beauty with white sand beaches and crystal-clear waters, the Maldives is ranked as one of the best diving destinations in the world. Tourists seeking leisure and relaxation are especially attracted by the breath-taking scenery, peace, and quietness of the Maldivian islands.
Due to the COVID-19 pandemic, the Maldives’ overall economy has contracted by 18.6% in 2020. This is attributable to its strong dependence on international tourism, which has been negatively impacted worldwide due to lockdowns and travel restrictions.
According to the World Travel & Tourism Council (WTTC), the total contribution of tourism to the Maldives’ Gross Domestic Product (GDP) in 2019 was 11.5%.
Tourism arrivals have slumped from approximately 1.7 million in 2019 to approximately 555,000 in 2020 due to the travel disruptions caused by COVID-19.
The Maldives hotel investment market recorded zero transaction volume in 2020 amidst the global economic uncertainty, the only year in the last five years (2016 to 2020) to record zero transaction volume.
In 2020, the global economic growth was rocked by the COVID-19 pandemic that caused countries to go into lockdown and stock markets to plunge. Activities around the world have seemingly come to a halt with travelling restricted and work-from-home becoming a new normal. US-China political tension continues to be uncertain, along with the plans for Brexit. With growing uncertainties in the geopolitical landscape and global market pressures, international trade and investment activities have softened and are expected to remain subdued. According to the World Bank, global economic growth is projected to expand at 4% in 2021, albeit a slow recovery.
Figure 1: Economic Outlook
Source: International Monetary Fund, World Bank, August 2021
Economic Performance & Outlook
Given the reliance of the Maldives’ economy on international tourism and related development, the slowing of the travel industry and construction activities due to COVID-19 has resulted in a 32.2% contraction in real GDP growth in 2020. Recovery is expected in 2021 with an expansion of 18.9% as economic activities gradually resume and consumer sentiment improves with the administration of the vaccine. Furthermore, the Maldives has one of the most relaxed regulations for international visitors, and the “one-resort-one-island” concept helps to enhance exclusivity amidst social distancing regulations.
Currency Account Balance
In 2020, the Maldives’ current account balance (% of GDP) has declined from -20.4% in 2019 to -24.4% in 2020. This is likely attributed to the loss of income from tourism activities on the back of a weaker international travel market and slowing of construction activities, on which the Maldives is heavily dependent.
Due to the pandemic, consumer price inflation for Maldivian rufiyaa has declined from 1.3% in 2019 to -1.6% in 2020. This is due to a decline in global oil prices in 2020 and the sluggish recovery of domestic demand. The country is largely dependent on imports, including fuel, to meet its domestic demand. Consumer prices are therefore responsive to movements in international commodity prices, particularly oil prices. Moving forward, International Monetary Fund (IMF) expects the inflation rate to increase to 1.6% in 2021 as it emerges from a low base. This is owing to the recovery in global energy and nonenergy prices and the general recovery of the economy. IMF forecasts that inflation will rise by an annual average of approximately 2.0% in the next four years from 2022 to 2025.
Horafushi Airport: Horafushi Airport: A domestic airport serving the island of Hoarafushi, in the northernmost Haa Alif Atoll. The new airport is constructed on reclaimed coastal land.
Funadhoo Airport: A domestic airport that serves the inhabited islands of the Shaviyani Atoll. The airport is located on the nearby island of Farukolhufunadhoo.
Maavarulu Airport: A domestic airport serving the Gaafu Dhaalu Atoll.
Madivaru Airport: A domestic airport expected to serve the island of Madivaru, Lhaviyani Atoll.
Fari Islands: A multi-resort concept that features three international hospitality brands, Capella, Patina, and The Ritz-Carlton. The development is located in North Malé Atoll, 50-minutes by speedboat from Malé International Airport. The archipelago also features the picturesque Fari Marina, built around a vibrant Fari Beach Club, charming boutiques, and a selection of handpicked, upscale food and beverage options. The ongoing development has opened the 100-key Ritz-Carlton Maldives on 1 June 2021.
CROSSROADS Maldives: Situated amongst the Kaafu Atoll and Emboodhoo Lagoon, CROSSROADS Maldives is the first extraordinary multi-island, fully integrated leisure destination. The development has opened two resorts: 198-key SAii Lagoon Maldives – Curio Collection by Hilton and 178-key Hard Rock Hotel Maldives. The islands are connected by footbridges for guests to explore the integrated hub. It features shopping, dining, a marina, spas, the Marine Discovery Centre, and more. The development is expected to inaugurate an 80-villa SO/Maldives on Island 3 in 2023.
Other Notable Projects (No Specified Completion Date)
Hanimaadhoo International Airport Expansion: The airport expansion is considered one of the largest infrastructure and connectivity projects in the northern Maldives. The project includes the upgrade of terminals, fuel farms, and the fire station, as well as the extension of the runway to 2200 meters, allowing accommodations for A320s and Boeing 737s.
Hulhumalé: This ongoing development located in the south of North Malé Atoll aims to act as an expansion of Malé City. The city will adopt a global lifestyle, focused on investing for the long-term future, nurturing the youth, and forming new traditions for the anticipated 240,000 residents of the city.
Greater Malé Connectivity Project: The USD 500 million ongoing project aims to connect three neighbouring islands, namely, Villingili, Gulhifahu, and Thilafushi through a 6.7-kilometre bridge and causeway network. The project will boost economic activity, generate employment and promote urban development in Hulhumalé, Hulhule, and Malé with the proposed Gulhifalhu Port and the Thilafushi Industrial Zone.
Velana International Airport Expansion: The ongoing USD 1 billion airport expansion comprises a 78,000-square-metre international passenger terminal building that will have the capacity to accommodate up to 7.5 million passengers a year upon its completion in 2022. The airport handled more than 4.8 million passengers and 54,000 flight movements in 2019. A new 3,400-metre-long and 60-metre-wide code-F runway is also being built to accommodate wide-body aircraft such as A380. The runway is expected to resolve the issues related to space and flight delays.
Figure 2: Infrastructure Developments in the Maldives
Source: HVS Research
Maldives Tourism Landscape
International Visitor Arrivals
According to the Maldives’ Ministry of Tourism (MOT) figures, international visitor arrivals have increased for four consecutive years to reach a record of approximately 1.7 million visitor arrivals in 2019 before decreasing by 67.4% to approximately 555,000 in 2020 due to the travel restrictions brought about by COVID-19.
Figure 3: International Visitor Arrivals (2016-2020)
Source: Ministry of Tourism Maldives
The seasonality in the Maldives is rather volatile but consistent due to visitors’ travel patterns. From December to March, the Maldives experiences a higher volume of visitors due to occasions such as Christmas, New Year, and Valentine’s Day. The Maldives has the best weather between November and April as it is cooler. The monsoon runs from May to October, peaking around June which explains the trough in May and June.
In 2020, the Maldives has exhibited abnormal seasonality due to the lockdown from 27 March 2020 to 15 July 2020. Since the reopening in July, the Maldives has recorded gradual growth in arrivals for the remaining months of the year.
Figure 4: Seasonality
Source: Ministry of Tourism Maldives
International Source Market
In 2020, India overtook China as the top international source market after China has dominated as the top source market for the past four years. This may be attributed to the restrictions imposed on Chinese visitors when the COVID-19 virus was first recorded in China in December 2019. Aside, Russia has emerged as one of the top five source markets due to the availability of flights from Russia to the Maldives in 2020.
The top five international source markets to the Maldives in 2020 were: India (11.3%), Russia (11.1%), United Kingdom (9.5%), Italy (8.4%), and Germany (6.6%). The five markets made up almost half of the total visitor arrivals to the Maldives in 2020.
Due to the social distancing measures imposed globally, the Maldives has capitalised on its unique concept of “one-island-one-resort” to emphasise its exclusivity to promote the destination.
Figure 5: Top Five International Source Markets (2020)
Source: Ministry of Tourism Maldives
Average Length of Stay (ALOS) increased by 0.9 nights, reaching 7.2 nights in 2020 due to extension of stays to avoid restrictions in guests’ home country, whereas some guests were stuck on the island during the lockdown in the Maldives.
*April, May and June 2020 average stays are estimated due to lockdown
Maldives Hotel Market
2020 was a quiet year in terms of hotel supply growth in the Maldives. The marketwide room supply only grew by 1.9%. HVS noted the opening of Radisson Blu Resort Maldives and Brennia Maldives, which added 128 and 193 rooms to the market, respectively. Properties such as Ritz-Carlton Maldives Fari Islands and Capella Maldives that were supposed to open in late 2020 were delayed due to the pandemic.
Based on the figures from MOT, there was an average of 966 registered accommodation establishments in 2020, however only an average of 389 establishments was operational, which equates to approximately 40% of the supply. In comparison to 2019, there was an average of 886 registered accommodation establishments and 873 were operational, which translates to approximately 99% of the supply. This has demonstrated a stark difference in the change of operational supply during COVID-19.
Moving forward, HVS will track the opening of six properties in 2021, which will introduce 1,170 rooms into the market. Between 2022 and 2025, an additional 1,593 rooms are expected to be added to the Maldives’ hotel supply. The hotels slated to open are mainly positioned in the upscale and luxury segments.
Hotels Opening in 2021:
AVANI Fares Maldives Resort, 200 keys
Gran Melia Huravee, 96 keys
Indus Maldives Resort & Spa, 170 keys
Le Meridien Maldives Resort & Spa, 154 keys
Oblu X Malé Atoll, 350 keys
OZO Maldives, 200 keys
Hotels Opening in 2022:
Alila Villas Maldives, 80 keys
Amari Kudu Kurathu Maldives, 200 keys
Capella Maldives, 64 keys
HYDE Maldives Feydhoo Finolhu, 125 keys
Oblu South Malé Atoll, 150 keys
OZEN Retreat South Malé Atoll, 30 keys
The Chatwal Maaga Maldives, 88 keys
Hotels Opening beyond 2022:
Centara Kassanaufaru Resort & Spa Maldives, 130 keys
Centara Hotels & Resorts Maldives, 165 keys
Centara Lagoon Family Island Resort & Spa Maldives, 145 keys
Centara Grand Muthaafushi Resort & Spa, 101 keys
JW Marriott Maldives Malé Atoll Resort & Spa, 80 keys
Mondrian Feydhoo Finolhu, 125 keys
Novotel Maldives Keredhdhoo, 110 keys
SO/Maldives, 80 keys
Figure 7: Maldives Hotel Rooms Pipeline (2021 to >2024)
Source: HVS Research
*All count includes independent properties
Maldives Hotel Market Performance
With the growth of international arrivals from 2016 to 2019, the Maldives has exhibited an upward trend in occupancy, registering a compounded annual growth rate (CAGR) of 2.0% between 2016 to 2019 despite having a strong pipeline of hotels. On the other hand, the Average Room Rate (ARR) has shown a downward trend as hotel supply, particularly midscale products, continues to grow in the Maldives, increasing the competition level in the accommodation market. As a result, the RevPAR has shown some fluctuations between 2016 and 2019. The RevPAR increased 2.5% in 2017, while 2018 and 2019 have recorded a declining performance, registering a CAGR of -7.4% in the two years.
In 2020, the Maldives recorded its worst performance in terms of occupancy in the last five years. This is attributable to the travel disruptions caused by the COVID-19 pandemic. Marketwide occupancy declined by 33.7 percentage points (p.p.) while ARR increased by 44.3%. Overall, RevPAR decreased by 29.8%, the sharpest decline over the past four years.
The Maldives has managed to achieve an abnormally high ARR in 2020 due to resort closures and the selling of higher room categories when travel restrictions were introduced globally. With the high ARR, the Maldives has managed to bolster its RevPAR in 2020. This may also be a result of the MOT’s marketing effort to capitalise on the “one-island-one-resort” concept to incentivise tourist arrivals into the nation. In November 2020, the MOT has launched its marketing campaign with the tagline, “Isolation never looked this good.” Furthermore, the Maldives has by far imposed one of the most relaxed travel regulations for international visitors. The destination has recorded a strong increase in visitor arrivals since the reopening of its borders in mid-July 2020, albeit at a lower number than before.
Moving forward, with many countries still implementing travel restrictions and the limited availability of flights worldwide, the tourism sector in the Maldives is likely to be negatively impacted in the short term but should still fare relatively well in the Asia-Pacific. Until the vaccine has been largely administrated globally, the uncertainty of resurgence in infections and reimposition of lockdowns will remain, which can result in dampening of business and consumer sentiments and impact visitors’ decision to travel.
Figure 8: Maldives Overall Hotel Performance (2016-2020)
Source: HVS Research
Tourism Models in the Maldives
Workation and Long-Staying Tourism in the Maldives
Due to the ongoing COVID-19 pandemic, remote working has become a norm and accommodation establishments have rolled out a series of long-staying and work-from-home packages. The Maldives benefits from the “one-island-one-resort” concept which allows for social distancing among travellers as each island operates like its own resort. The Maldives is also among the first countries to initiate vaccine tourism with the 3V (Visit, Vaccinate, Vacation) Campaign which further promotes long-stay. The greater emphasis on flexibility and work-life balance may spur the rise of bleisure — a segment of long-staying workationers. In April 2021, Tourism Minister Dr. Abdulla Mausoom has stated that the government is making arrangements to extend tourist visas up to one year.
First introduced in 2011, Maldives-based Soneva Resorts and Residences was the first and only company to offer Maldivian real estate to foreign buyers through the Soneva Villa Ownership Program. The benefits include discounts on all Soneva resort services, flight transfers, owner benefits, exchangeability of owner’s days within all Soneva Resorts, income sharing in a Villa Rental Program, and the privilege to allow for interior villa customisation.
Just last October 2020, Singapore-based Banyan Tree Holdings Limited has rolled out a new extended-stay product known as Habitat. The new offering aims to bring in a new way of living, working, and travelling for seasonal travellers, families and remote workers. Using the Habitat Pass, guests have access to 35 hotels in more than 30 destinations under the group’s house of brands: Banyan Tree, Angsana, and Cassia. Valid for twelve months, they can purchase from one to four units at a time, granting stays ranging from seven to 28 days in multiple properties across different destinations. Credits ranging from USD 150 to USD 700 are given based on the number of units purchased, which can be used for food and beverage, spa and wellness activities, laundry services, and airport transfers.
On 5 November 2020, Anantara Veli Maldives Resort offered the ‘Unlimited Stays in Paradise’ package for bookings till 30 November 2020, which allows unlimited nights at the resort for a one-time fee priced at USD 30,000, inclusive of all taxes and service charges, for two persons sharing one Over Water Bungalow. The package is valid for stays from 1 January 2021 to 23 December 2021 and includes daily breakfast for two, a 25% discount on spa services and dining, and complimentary WiFi.
Figure 9: Habitat by Banyan Tree
Source: Banyan Tree Holdings
Another move to diversify the Maldives’ product offering can be seen from the first multi-island integrated resort CROSSROADS which was launched in September 2019. Developed by Thailand-based Singha Estate Public Company Limited, the project comprises nine artificial islands connected by footbridges. Phase one of the project has been completed with 198-key SAii Lagoon Maldives, a Curio Collection by Hilton, 178-key Hard Rock Hotel Maldives, Maldives Discovery Centre, Marine Discovery Centre, the Marina, and the 326-square-metre event hall. Phase two of the project will take another five years to complete, featuring a mix of hotels and long-stay residences, details of which have not yet been disclosed. Just last July 2021, it was unveiled that the 80-key SO/Maldives will be the jewel of the third island on CROSSROADS. The first co-working space in the Maldives will also be featured as part of the CROSSROADS project.
However, concerns about rising sea levels may impact the interest of potential investors in these long-stay tourism models in the Maldives. More funding is required for coastal protection works and to build critical infrastructure like sea walls. In May 2021, it was announced that the Maldives is creating an innovative floating city that mitigates the effects of climate change. Designed by Netherlands-based Dutch Docklands, The Maldives Floating City will feature thousands of waterfront residences, hotels, shops, restaurants, a hospital, a school, and public spaces floating along a flexible, functional grid across a 200-hectare lagoon. Construction is slated to commence in 2022 and the development will be completed in phases over the next five years.
Guest House Culture in the Maldives
The Maldives offers various types of accommodation to cater to different preferences which are categorised into resorts, hotels, guest houses, and safari vessels.
The relaxation of its tourism rules which was restricting all tourism to resorts on uninhabited islands has sparked the growth of guest house tourism over the years. Apart from the differences in service, quality, and product offerings, the main difference between guest houses and resorts are that guest houses do not own their own island. Similar to resorts, there are opportunities to engage in excursions, watersports, diving, and other activities. Tourists in the guesthouses will be able to experience living like a local and are expected to be respectful of the local community. Guest houses have boosted the growth and development of mid-market tourism, offering an alternative to budget-conscious and cultural travellers. In 2021, the Maldives has been actively promoting local tourism and guest houses as part of their economic diversification plans.
It is also noted that a reliable and affordable public transport service, good service quality and safety standards are essential for the growth of guest houses.
Hotel Transactions and Investment
Zero Transaction Volume in 2020
Hotel investment in the Maldives has exhibited a fluctuating trend in the past four years, between 2016 and 2019, registering an average of three transactions annually. In 2019, the Maldives recorded five transactions in total, the highest number of transactions between 2016 and 2019. Generally, the Maldives’ hotel investment market has been dominated by foreign investors.
In 2020, the Maldives has recorded zero transaction volume in the hotel investment market. The market has been active throughout the past four years, with investment volume peaking in 2019 at USD 438 million.
However, in 2020, the global economy has slowed, consumer sentiments have weakened, and the accommodation market was negatively impacted by travel disruptions. As a result, the hotel investment market has been quiet in 2020.
Notable transactions in 2019:
151-key Conrad Maldives Rangali Island at USD 180 million (USD 1.19 million/key)
110-key Anantara Dhigu Maldives Resort at USD 97 million (USD 883,000/key)
67-key Anantara Veli Maldives Resort at USD 59 million (USD 883,000/key)
As of YTD August 2021, Maldives has recorded one transaction. The 80-key Kanuhura Maldives has been acquired at USD 41.5 million (USD 519,000/key). This suggests that investors’ confidence in the Maldives hotel market has recovered to some extent.
Figure 10: Maldives Hotel Transactions (2016 – 2020)
Source: Real Capital Analytics (RCA)
Inbound Hotel Investment Dominated by the United States
From 2016 to 2019, inbound investment in the Maldives has been dominated by investors from the United States. They have acquired a total of five properties, amounting to a total investment volume of approximately USD 378 million, equivalent to USD 944,000 per unit.
This is followed by Singapore and Thailand, which have acquired three properties each, with a total investment volume of USD 161 million and USD 84 million, respectively. The remaining countries, namely, Germany, Japan, and Sri Lanka have acquired one property each.
It is evident that the United States investors have been actively investing in the Maldives market, which averages to approximately one hotel acquisition per year.
In terms of investors’ profile in totality, Asia-Pacific leads the way with four out of six countries belonging to the Asia-Pacific region. Europe, the Middle East, and Africa regions are shown to be less active in the Maldives hotel investment market. As of YTD August 2021, the transaction of the 80-key Kanuhura Maldives was made by a Singapore investor.
Figure 11: Investor Profile for Maldives Inbound Hotel Transactions
Figure 12: COVID-19 Timeline
Source: HVS Research
In 2020, the Maldives market recorded its greatest decline in international arrivals and poorest hotel performance in recent years due to the travel restrictions brought upon by the COVID-19 pandemic. The Maldives has recorded a decline of 33.7 p.p. in occupancy and an increase of 44.3% in ARR, contributing to an overall decrease of 29.8% in RevPAR. With many countries still implementing travel restrictions to control the spread of the coronavirus, the demand for tourism in the Maldives is likely to remain subdued in the short term due to the lack of international visitor arrivals. . Until the vaccine has been largely administrated globally, the uncertainty of resurgence in infections and reimposition of lockdowns will remain.
As a prominent beach destination in Asia-Pacific, the Maldives has strong mindshare in couples looking for a honeymoon destination, diving enthusiasts searching for diving spots that feature rich marine biodiversity, and families seeking private and exclusive bonding time during vacation.
The Maldives have won multiple travel accolades in 2020 itself, this includes: “Indian Ocean’s Leading Beach Destination”, “India Ocean’s Leading Dive Destination”, “Indian Ocean’s Leading Cruise Destination” and “Indian Ocean’s Leading Destination”.
In terms of supply pipeline, HVS notes that there is an additional 20 resorts in the pipeline that will be opened by 2025. It is anticipated to add 2,763 rooms to the market. The hotel market in the Maldives is expected to remain competitive over the next few years as upscale and midscale properties continue to expand their footprint in the market.
In 2020, the Maldives did not record any transaction volume, the only year that recorded zero transactions in the past five years between 2016 to 2020. This illustrates investors’ uncertainty in hotel investment due to the ongoing fight with the COVID-19 pandemic.
To bolster the Maldives’ tourism market, the Maldives government has established one of the most relaxed regulations on international visitors in 2020. The MOT has also launched several marketing campaigns to emphasise the safety and unique selling points of the destination.
Moving forward, demand generation for the Maldives will be supported by the newly built airports and airport expansions. Large-scale developments such as CROSSROADS Maldives and Fari Islands are also likely to help induce demand.
The Maldives’ hotel market outlook is expected to continue facing turbulence on the back of a rocky global environment and the COVID-19 pandemic in the short term. However, the Maldives government and MOT are committed to supporting the tourism industry and have introduced initiatives to keep the tourism industry afloat during COVID-19. This includes hotel lease deferments and marketing efforts.
In the mid-to long-term, several tourism and national development plans have been put in place to ensure that the Maldives is set on the road to strong recovery when the economic situation improves. This includes new tourism concepts like CROSSROADS and Fari Islands.
ABOUT PEGGY LEE
Peggy Lee is a Senior Analyst with HVS Singapore She graduated from Singapore Institute of Technology with a Bachelor’s Degree in Hospitality Business. Since joining, she has been engaged in numerous market research, feasibility studies and valuations in the Asia Pacific region that include Australia, China, Indonesia, Malaysia, Maldives, Singapore, Thailand and Vietnam. For further information, please contact: firstname.lastname@example.org
ABOUT CHARISS KOK XIN
Chariss Kok Xin is a Manager with HVS Singapore. She graduated from Glion Institute of Higher Education with a Bachelor of Arts in Hospitality Real Estate Finance and Revenue Management. Since joining, she has been engaged in numerous market research, feasibility studies and valuations in the Asia Pacific region that include Australia, Indonesia, Malaysia, Maldives, Papua New Guinea, Philippines, Seychelles, Singapore and Vietnam. For further information, please contact: email@example.com
ABOUT HOK YEAN CHEE
Hok Yean CHEE is the Regional President of HVS Asia Pacific. She has 30 years of experience in more than 30 markets across 19 countries in Asia Pacific, providing real estate investment advisory services for a wide spectrum of property assets. Her forte lies in providing investment advisory on hotels and serviced apartments including brokerage, strategic analyses, operator search, market feasibility studies, valuations and litigation support. For further information, please contact: firstname.lastname@example.org
BY CIARA NUGENT TIME Magazine.
AUGUST 18, 2021 9:16 AM EDT
Turkish tour guide Erkan Sehirli likes to take his American and European visitors to the gulf of Gökova region on his country’s southwestern coastline. Together they hike trails that pass through ancient ruins, overlooking picturesque bays where cruise ships drop their guests for lunch. Sold as “the place where green meets blue,” Gökova is an upscale, boutique destination and one of the region’s most beloved natural attractions.
Or it was, until wildfires tore through the area in late July amid one of the worst heat waves to hit the southern Mediterranean in decades. “You can’t be there any more. It’s all grey. It’s like walking on the moon,” Sehirli told me over the phone from the nearby town of Bodrum last week. “One day you’re in heaven, and the next day everything is gone.”
This summer, the climate crisis has made itself increasingly visible through a torrent of extreme weather events across the world, and the places we go to get away from it all have not been spared. The Mediterranean fires have destroyed landscapes and forced dramatic evacuations from beach resorts in Turkey, Greece and Italy. Germany’s historic floods have washed out mountain trails in Bavaria. A historic drought in the western U.S. has forced inns in Mendocino to rely on portable toilets, and vacation operators in Arizona to cancel houseboat bookings for dried up Lake Powell. These events are a kick in the teeth for local tourism industries that are just beginning to recover from COVID-19.
They’re also a sign of the sector’s extreme vulnerability to climate change. The growing number of natural disasters each year—which have already quadrupled between 1970 and 2016—are threatening the natural and cultural heritage that tourism destinations rely on to lure in visitors. Warming global temperatures are lengthening the period of summer that is unpleasantly hot in beach resort regions, and shortening ski seasons in mountain retreats. Rising sea levels are eroding beaches in coastal communities. Increasing water scarcity in warmer regions is sowing potential for conflict between locals and the resource-intensive tourism industry. And some travelers are beginning to confront the looming question of whether or not to keep flying when the technology to decarbonize aviation is decades away from being used at scale.
A reckoning for the tourism industry could come soon. In July, G7 leaders threw their weight behind a burgeoning movement in the finance world for mandatory climate risk disclosure, which would force companies and their financiers to tell investors how their business is exposed to climate change. The tourism industry is “not at all” prepared for the level of risk that process might expose, says Daniel Scott, a professor of Geography and Environmental Management at Canada’s University of Waterloo, who has spent two decades researching the interaction between climate change and tourism. “They’ve got to do a lot in the next little while—probably the next three to five years—to understand both what the changing physical climate means for them, but also the transition to net zero”
Climate change won’t necessarily kill tourism. The industry has proved adept at adjusting its seasons and offerings to suit new weather patterns. Canada’s Whistler ski resort, for example, has been so successful expanding its snow-free activities that it now makes more money in the “green season,” Scott says. In Turkey, Sehirli still has plenty to show visitors outside of Goköva, like the ancient city of Ephesus. And, if the unpleasant heat of late summer stretches further into September, he says he expects Europeans and Americans will just start coming more in winter.
But climate instability will disrupt the industry in painful ways. And unfortunately, everything points to the biggest losers being those with the fewest resources. Because it opens up flows of foreign exchange and encourages investment in local infrastructure, tourism is often touted as a route to prosperity and stability for struggling countries. According to the U.N., it is a principal export for 83% of developing countries and the biggest export in a third of them. Development experts often call the industry the largest voluntary transfer of wealth from rich to poor, with the sums moved dwarfing aid budgets.
Where the tourism industry relies on coasts and other areas of natural beauty, it may be particularly vulnerable to climate impacts, like sea level rise, glacier melt or extreme weather. Low-lying island nations in the South Pacific are losing their beaches to sea level rise and their coral reefs to ocean warming. In the Himalayas, snow and glacier melt is making the mountains more hazardous and destroying the ecosystem’s natural beauty. In the Caribbean, where tourism makes up
There will be some winners in this dynamic. For example, destinations with cooler climates, like Scandinvavia, could welcome more visitors as they warm. And across the globe, larger companies with deeper pockets might be able to weather increased costs of doing business, and spread their risk across different destinations. But more than 80% of the tourism industry is made up of small and medium-sized businesses, per the WTTC. They may struggle to survive if they lose physical assets to extreme weather or if the risks of a more volatile climate drive up the cost of doing business.
There are solutions to stem the damage, like coastal adaptation to protect communities and landscapes that draw tourists. Better forest management can reduce the spread of wildfires. Government financial support can help small businesses bounce back when disaster strikes.
But for those of us lucky enough to travel abroad, the ethics of vacationing are getting ever more complicated. Should I fly on a fossil-fueled plane to a Caribbean island so my tourist dollars can help rebuild part of the local area that was recently destroyed by a hurricane? Should I patronize a coastal restaurant and enjoy carbon-intensive surf and turf as their beach is washed into the ocean? Should I just stay home and send my money abroad? Probably, yes. But will I?
Destinations across North America are at different stages of tourism development.
However, one common factor between the United States, Mexico and Canada is that the effects of the Covid-19 pandemic in 2020 have been felt hard.
That is according to GlobalData, a data and analytics company.
A report, Tourism Destination Market Insight: North America (2021), found that total international arrivals to the region declined 67 per cent year-on-year in 2020 and inbound expenditure by 74 per cent.
North America’s forecast recovery follows the general global travel consensus that domestic tourism will recover first (2022), but international arrivals will not recover until 2024.
Forecasts for inbound tourism expenditure, however, suggest this will not surpass pre-pandemic levels until after 2025.
Johanna Bonhill-Smith, travel and tourism analyst at GlobalData, commented: “Covid-19 can still be identified as the greatest threat to growth within the travel sector, and in North America this is no different.
“The loss of inbound tourist spending in 2020 to North America was significant.
“GlobalData’s forecast suggest this is not expected to fully recover until after 2025, and this will be one of the greatest factors affecting economic recovery for the region over the next few years.”
One of the major benefits of inbound tourism is spending, which can boost economic revenues, stimulate employment and act as a catalyst for infrastructure development.
Each destination does hold a strong domestic tourism offering, but this cannot be relied upon alone to offset the collapse of international travel.
Bonhill-Smith continued: “Travel to North America from other destinations worldwide can be expensive.
“GlobalData’s survey found that 23 per cent of global respondents have reduced their household budgets in the past year and 27 per cent have ‘somewhat’ reduced them.
“Reduced budgets mean less expenditure on recreation affecting the ability to travel.
“Budget constraints are going to be more important in purchasing travel experiences over the next few years, which could jeopardize North America’s tourism recovery in comparison to other regions worldwide.”
Due to proximity, connectivity and competing low-cost carrier operators, travel between the US, Canada and Mexico can be relatively low-cost, spurring travel across the destinations.
Intra-regional travel will be vital in North America’s tourism recovery.
Each destination already relies heavily on neighbouring destinations as important sources for economic income.
The COVID 19 pandemic left an indelible imprint on the Southern Nevada tourism industry and the broader regional economy Compared to recent recessions, the COVID 19 recession’s magnitude was unprecedented in its depth and speed Applied Analysis was retained by the Las Vegas Convention and Visitors Authority (the LVCVA) to review and analyze the economic impacts of the pandemic on Southern Nevada’s tourism industry in 2020.
This brief examines the effects on visitation, employment and other key metrics as well as the overall decline in the tourism industry’s economic impact due to the pandemic and related response While the economic losses in 2020 were material, it is worth noting that many of the economic conditions and shortfalls have persisted into early 2021.
Jim Hepple is an Assistant Professor at the University of Aruba and is Managing Director of Tourism Analytics.