Economic Turbulence's Toll on Travel Recovery

25.08.2023 - 14:31 / skift.com / Edward Russell / Rashaad Jorden / Wouter Geerts / Skift Research / Lula Da-Silva

Good morning from Skift. It’s Monday, December 19, and we are headed back from a successful Skift Forum in Dubai. Here’s what you need to know about the business of travel today.

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Economic turbulence, including rising inflation, is taking a continued toll on travel. Skift Research’s newly released Travel Health Index for November shows the industry’s recovery slowing down for the second consecutive month.

Senior Research Analyst Wouter Geerts reports the Index’s average global health score hit 81 percent of pre-Covid levels, a 3 percentage point drop from October. Only two countries recorded growth, Brazil and Thailand. Geerts writes Brazil has possibly become a more attractive travel destination because of incoming president Lula da Silva while Thailand benefited from the ongoing easing of its entry requirements.

Meanwhile, Geerts adds that the travel industry is poised to receive a significant boost from China loosening its zero-Covid policy this month. Data from China’s largest travel agency Trip.com revealed flight searches to the country surged after its largest airport lifted requirements for incoming visitors to test negative for Covid.

Next, inflation is contributing to a decrease in the number of Americans planning to travel for the December holidays this year, reports Associate Editor Rashaad Jorden.

A recent survey by travel industry website The Vacationer found that 43 percent of U.S. adults intend to travel for either Christmas, Hanukkah or Kwanzaa this year. That’s a 4 percentage point drop from the figure recorded last year. Economic concerns are still weighing heavily on the minds of Americans. More than 67 percent of respondents said inflation is affecting their December holiday travel plans, with 41 percent saying that soaring prices were impacting their travel plans for Christmas specifically.

Respondents planning to take a trip for Christmas this year said they intend to spend more on travel than they did in 2021. About a third of American adults plan to spend more than $500 to travel for Christmas in 2022, compared to 23 percent last year.

Finally, Los Angeles International Airport, or LAX, is proceeding with its $6 billion expansion plan ahead of the 2028 Olympics hosted by L.A., reports Edward Russell, editor of Airline Weekly, a Skift brand.

The projects, scheduled to be completed by 2027, include two terminal expansions and a planned nine-gate Concourse 0. Russell writes Southwest Airlines could make big gains in terms of gates from the Concourse 0 project. The Dallas-based carrier will control 22 gates across Concourse 0 and Terminal 1 when the concourse opens, according to LAX operator Los Angeles World Airports.

Russell