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Global travel growth to slow through 2020, report says


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Global travel growth to slow through 2020, report says

Growth in global travel demand is expected to weaken further through 2020, mirroring a slowdown in the world economy and adding to the troubles confronting the airline industry.

International visitor arrivals are forecast to increase 3.6% in 2019 and 2.8% in 2020, down from 5.9% growth in 2018 and a peak of 7% growth in 2017, according to a report published by Tourism Economics. Under the analysis, all regions excluding the Middle East would see a slowdown for 2019, while the Americas and Asia would record higher growth in 2020.

The expected slowdown in global travel growth comes as airline operators and aircraft manufacturers continue to face industry challenges, including capacity constraints due to the prolonged grounding of Boeing Co.'s 737 MAX jets following two fatal crashes. Major U.S. carriers United Airlines Holdings Inc., Southwest Airlines Co. and American Airlines Group Inc. have all removed the troubled planes from their flight schedules, a move that has been perceived as a gain for Delta Air Lines Inc. Ireland's Ryanair Holdings PLC is also planning further capacity reductions due to delays in the delivery of its 737 MAX orders.

Inbound travel to the U.S. is projected to drop 1.6% in 2019 due to a decline in arrivals from key markets such as Canada, Mexico, China, Brazil, Korea and Argentina, according to the study. "The persistently strong dollar and enduring trade and political tensions have contributed to the U.S. loss in market share," Tourism Economics wrote. Inbound travel growth in the Americas is expected to hit 2.1% and 2.8% in 2019 and 2020, respectively, compared to a 2.5% increase in 2018.

Growth in European travel demand is slated to decelerate to 3.6% in 2019 and 2.2% in 2020 from 6.1% in 2018, largely due to softening economic growth. Tourism Economics said travel flows have also been affected by Brexit uncertainty and high-profile troubles in the region's airline industry, including declining profits at Deutsche Lufthansa AG, Germany's biggest airline.

In the Asia-Pacific region, growth in international arrivals is forecast to slow to 3.6% in 2019 from 6.5% in 2018 before picking up to 4.0% in 2020. Hong Kong's tourism industry is in its worst slump since 2003 due to the persisting anti-government protests and the state's response to them, while Chinese travel demand continues to be hurt by the country's trade conflict with the U.S., according to the report. "However, it is Asia that is feeling this slowdown most intensely as around 80% of Chinese trips remain within the region," it said.

Africa's inbound travel growth is expected to weaken to 6.8% and 3.7% in 2019 and 2020, respectively, from 12.0% in 2018. Tourism Economics expects the Middle East to maintain a growth rate of 4.4% in 2019, followed by a 3.7% increase the next year.