Skift Travel News Blog

Despite the euphoria around the return of international business travel, a data analytics firm has predicted a gloomier outlook.

GlobalData has said it is unlikely to recover until at least 2026.

It’s singled out the complexity of business travel, which it said still faces several added layers of complexity that affect consumer behaviour, purchase decisions, and general operations.

“Despite some encouraging signs of revival for the overall travel industry in 2022, the business travel sector is witnessing a slower-than-expected recovery, particularly regarding international travel,” it reported.

Those challenges will persist over the next four years, it said, adding that another prominent disruption was the rising cost of living fuelled by the ongoing energy crisis, due to “low energy reserves due to the pandemic and the current geopolitical situation between Russia and Ukraine.”

These increased energy costs are putting further pressure on businesses that are seeing operational overheads soar, with the result that business travel is no longer a priority for companies, it claimed.

Its Tourism Demands and Flows Database also found that international business travel fell by 78.4 percent in 2020, before falling a further 7.9 percent in 2021.

Tourism revenues are expected to reach between $10 billion and $12 billion for Egypt’s fiscal year, which runs from July 1 to June 30.

Revenue was $6 billion to $7 billion in 2021, its deputy tourism minister said last year.  According to reports, finance minister Mohamed Maait also said the war in Ukraine was unlikely to have an impact. This is despite the destination being popular with both Russian and Ukrainian tourists.

Its recent strategy to target more business from Western Europe, including the UK, Germany, Spain, France and Italy, as well as Hungary and Gulf Arab countries, may be working.

Meanwhile, the minister said the Suez Canal was expected to generate revenues of $7 billion by the end of the current fiscal year. The shipping route between Europe and Asia is one of Egypt’s biggest sources of foreign currency.

Europe is predicted to make a full domestic tourism recovery in 2022, and internationally by 2025.

That’s according to a new report from the European Travel Commission. While domestic travel is projected to make a complete recovery this year, international arrivals to Europe are forecast to be 30 percent below 2019 volumes, due to the war in Ukraine.

A recent survey conducted by MMGY Travel Intelligence indicated 62 percent of US travelers planning to visit Europe stated concerns about the war in Ukraine spreading to nearby countries as a factor impacting plans.

Western Europe is expected to be the best performing region globally this year, according to the latest quarterly European Tourism Trends & Prospects report, published Wednesday. But it will still be 24 percent below 2019 levels.

Eastern Europe’s recovery has been pushed back to 2025 due to the war in Ukraine, with arrivals now forecast to be 43 percent lower in 2022 compared to 2019.

“The sector is steadily recovering from Covid-19 and there is cause for optimism,” said Luis Araujo, president of the commission. “Nevertheless, European tourism will have to maintain this fortitude throughout the year as Europe continues to deal with the significant fallout from the ongoing Russo-Ukrainian conflict.”

The U.S. remains among the best performers of all long-haul source markets.

Meanwhile, there were “no immediate signs” Chinese tourists were returning to pre-pandemic levels any time soon.

Norwegian Cruise Line Holdings Ltd has reported a net loss of $1 billion for the first quarter of this year, as the Omicron variant hit sailings.

The Russia-Ukraine conflict also resulted in the cancellation or modification of 60 sailings, which included all voyages with calls to ports in Russia.

However, the result is an improvement on the same quarter in 2021, when it racked up losses of $1.4 billion. Revenue also increased to $521.9 million, compared to $3.1 million in 2021, as cruise voyages restarted.

Total cruise operating expense increased 266.1 percent in the 2022 first quarter, compared to 2021, due to the resumption of sailings but also higher payroll, fuel, and “direct variable costs of fully operating ships.” Inflation also affected food, fuel and logistics costs.

While as of May 7 its entire fleet was back up and running, it was operating at just 48 percent capacity in the first three months of 2022.

“Last week we reached the biggest milestone yet in our Great Cruise Comeback as Norwegian Spirit, the last ship in our fleet to resume sailing, welcomed guests on board in Papeete, Tahiti,” said Frank Del Rio, president and CEO. “The herculean effort to restart our fleet would not have been possible without the incredible fortitude of the entire Norwegian team and the unwavering support of our key partners and stakeholders around the world.”

Looking ahead, its advance ticket sales balance increased $418 million in the quarter to $2.2 billion as of March 31, 2022. This includes $0.6 billion of future cruise credits, or 27 percent of the total deposit balance.

Gross advance ticket sales were $1.1 billion during the quarter, the highest level since the start of the pandemic.

The cruise line has removed all calls to ports in Russia from its itineraries in 2023.