The state of the Hospitality and Tourism Industry in 2022

Summer 2022 is quickly approaching, and many destinations are ready to open their doors to travelers. However, a major question remains unanswered. Will this year be any better for the hospitality and tourism industries than the previous two, given that COVID-19 is still in place?

The pandemic has had a profound impact on the tourism sector and its professionals. Booking cancellations resulted in a drop in revenue for tourism businesses, while many people were laid off.

What do experts think about the performance of the hospitality and tourism business in 2022 based on current epidemiological statistics and bookings? Let us investigate.

What experts believed

Tourism experts have been pessimistic about the sector’s recovery since the outbreak began. Only 1% of tourist experts believed a return to pre-pandemic levels was possible in 2021. Simultaneously, 15% predicted that the sector will revive by 2022. The majority (43 percent) preferred 2023, while 41 percent preferred 2024 or later.

Source: World Economic Forum

Statistics on the hospitality and tourism industries

Tourism arrivals increased by 4% in 2021 compared to 2020, although they remained 72% lower than pre-pandemic levels in 2019. To put it another way, the decline in tourist visits resulted in a $1.3 trillion loss in export earnings.

To demonstrate this, the graph below shows that tourists spent less nights in tourist accommodations over the three summer months of June through August 2021.

Source: Eurostat

In January 2022, global foreign tourist arrivals more than doubled (+130 percent) compared to 2021. This is an increase of 18 million more visits worldwide in the first month of the year, which is equal to the total increase in visitors for the entire year of 2021. Despite this huge increase, the worldwide hospitality and tourism industry’s numbers in January 2022 remained 67 percent lower than pre-pandemic levels.

The increase in tourist arrivals in early 2022 set the stage for a record-breaking year since the pandemic began. Unfortunately, the bright picture appears to be deteriorating as a result of new problems.

The challenges of the hospitality and tourist industry in 2022

The war in Ukraine

While governments throughout the world were reducing their covid-related prohibitions, the Ukraine war came to impose new ones.

The war between Russia and Ukraine, which began on February 24, 2022, impacted global transport and tourism by closing numerous European countries’ airspace to Russian carriers.

Russians and Ukrainians jointly accounted for 3% of worldwide spending on international tourism in 2020, which is predicted to decline in 2022. At the same time, experts predict that a prolonged conflict will cost the global tourism industry an additional $ 14 billion.

The hospitality and tourism businesses in neighboring east European countries and numerous other Mediterranean locations will suffer the most as a result of this crisis.

Price increases

The Russo-Ukrainian conflict exacerbated already high inflation, boosting prices and lowering consumer purchasing power even further.

The recent increase in oil and natural gas prices, as well as rising electricity bills, have dramatically increased the cost of accommodation and transportation. As a result, firms face increased pressure as their profit margins shrink. At the same time, many people will decide whether to travel at all or to travel less.

According to the Organisation for Economic Co-operation and Development (OECD), economic growth would be weaker than predicted this year. Specifically, OECD reports that global economic growth will be about 1% lower and inflation 2.5% higher than initially expected.

To wrap up

The year 2022 started off in the greatest conceivable way for tourism, with hints of considerable advances in worldwide travel exceeding expectations. This good feeling, however, did not last long, as the war in Ukraine eventually overshadowed these positive tendencies. As the summer season of 2022 approaches, it remains to be seen how the global tourism and hospitality industries will deal with this new uncertainty.

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