Travel 2018: What the data tells us
Value growth for 2017 is expected to be strong at 4.1% in 2017, decelerating to 3.1% in 2018, and a minor economic deceleration is expected in China.
Euromonitor International is excited to share new insights about the travel industry. Travel and tourism continues to remain on track, outperforming the global economy, with arrivals set to grow by 3.7% and inbound receipts at a stronger rate of 4.1% over 2017, compared to world GDP at 3.5%.
Value growth for 2017 is expected to be strong at 4.1% in 2017, decelerating to 3.1% in 2018, due to dark clouds gathering on the horizon as uncertainty escalates, and a minor economic deceleration is expected in China.
By 2022, we expect that China will be the world’s largest source of outbound tourism demand, with 128 million trips, overtaking the US as the country with the highest propensity for travel abroad. Growth is set to be very strong, at 8.4% over the period 2017-2022. Outside of Asia, the US and France are likely to benefit the most, due to their China-ready approach.
China is already the largest source of tourism expenditure, growing by 10.9% over 2017-2022, driven predominantly by GDP per capita, and the rise in middle-class households.
Travel continues to be a two horse race with lodging and airlines dominating sales, which indicates the health of the global travel industry, where traditional components continue to deliver solid CAGR growth of over 3.3%, with airlines and lodging accounting for USD1.2 trillion worth of sales.
For most countries, online travel sales are increasing at a strong clip year-on-year. However, with this new dataset in Travel 2018, we’re able to see that in the most digitally ready markets, like the UK, that sit atop Euromonitor’s Digital Consumer Index, there is a ceiling to how far online travel sales can grow.
Luxury categories are benefiting from consumers trading up from mid-market brands to luxury, whilst growth in budget remains popular but doesn’t bring vast returns, but budget players are faced with the challenge from consumers increasingly demanding a premium service at a lower price bracket. The trend towards premiumisation affects every price point, which also requires that luxury constantly updates to keep ahead of consumers’ expectations.
China’s Shanghai Chunqiu operating in intermediaries enjoyed the largest incremental sales of any travel brand in the world, followed by Expedia and Southwest Airlines, enjoying an additional USD8 billion, USDD5.5 billion and USD3.8 billion, respectively.
The largest travel brands worldwide are Ctrip and Booking.com, with Ctrip towering over all its rivals with sales of USD60 billion, compared to Booking.com’s USD33 billion in 2017.
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