Travel is back, but not all travelers are welcome anymore.
After a two-year lull due to the pandemic, the travel industry boomed back in full swing this summer. With the easing of pandemic-era restrictions and years’ worth of pent-up travel demand, international tourism in the first three months of 2022 increased by 182% over the same period last year, according to the UN World Tourism Organization.
The 2022 travel boom continued into the summer, particularly in European travel destinations, where EU officials say up to 70% of pre-pandemic travel demand will be recovered this year.
But after profit cuts and widespread layoffs during the pandemic, the travel industry is banking on only the wealthiest travelers to help replenish their coffers, and with rising inflation in many countries driving up fuel costs, more and more airlines and travel destinations are deciding. forgetting a major component of the pre-pandemic tourism economy: budget travel.
The end of cheap travel?
Even the airlines credited with starting the low-cost travel revolution reckon that budget tourism won’t be as sustainable as it used to be for the foreseeable future. Read also : Patient Care Assessments.
“Our promotional fees are definitely at the lower end of the market—the one-euro fees, the €0.99 fees, even the €9.99 fees—I think you won’t see those fees for several years. , ” Michael O’Leary, CEO of the Irish airline Ryanair which pioneered the no-frills and low-cost travel model in Europe, told BBC Radio 4’s Today program this week.
In fact, Ryanair once offered £10 flights across Europe (about $12), but O’Leary suggested it will be a while before customers can expect to recoup those fees, citing costs rising fuel.
O’Leary said the average airline fare is likely to rise from €40 to around €50 (about $52) over the next five years, roughly in line with the fares offered by competitors. Around a quarter of the UK fares offered by Swiss low-cost airline EasyJet are still available for under £50 (about $61), a company spokesperson told Fortune.
However, despite higher fares and fewer budget options, O’Leary said he expects interest in travel to remain at sustained levels.
“We think people will continue to fly frequently. But I think people are going to be a lot more price sensitive,” he said.
Travel hotspots turn to wealthier customers
It’s not just airlines that invite budget travelers. This may interest you : Thailand ends almost all travel restrictions – but one important rule remains. Even destinations that were once considered mainstream budget tourist spots are being marketed primarily to more affluent tourists as they reopen to travel for the first time in recent years.
New Zealand – which used one of the world’s strictest entry restrictions during most of the pandemic – finally reopened its borders to international tourists at the end of July, but some tourists are more welcome than others .
New Zealand’s tourism minister, Stuart Nash, clarified this week that the country would be targeting “high-quality” and “big-spending” tourists rather than the backpacking and budget travelers who flocked to the country before the pandemic for its natural scenery. and its friendly culture. .
“We’re going to welcome backpackers… [but] we’re not going to target the people who post on Facebook how they can travel around our country on $10 a day eating two-minute noodles,” Nash said.
Thailand – where tourism provided a fifth of the country’s GDP and 20% of employment before the pandemic – is also trying to move away from budget travel and more towards providing luxury travel experiences for wealthy visitors as it tries to start to add to its tourism industry.
Last month, Deputy Prime Minister Anutin Charnvirakul told tourism operators at an industry event that they should look to “sell premium” and focus on high-end experiences for wealthy tourists, while discouraging discount programs at hotels and businesses that budget would attract more-. conscious travelers.
“We can’t let people come to Thailand and say because it’s free,” he said.
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