Wednesday, June 29, 2022

Travel sees rebound for some Mena markets

While the global travel recovery remains uneven, the immediate future of travel has  become the most anticipated activities for 2021. While a rebound in ground travel and pick-up in domestic flight bookings are showing encouraging signs, Mastercard released its report, Recovery Insights: Ready for Takeoff?, a view into key travel trends in the air and on the ground, around the world. 

The report, developed by the Mastercard Economics Institute, draws on aggregated and anonymized sales activity across the global Mastercard network to better understand the next phase for travel, its drivers and challenges. This includes the balance between leisure and business, local and long-distance, and saving and spending. The report also looks at the spending categories seeing an uptick and what they signal for travel recovery.  

“There are definite indicators of recovery across some markets in the Middle East & Africa, for example gas spending in Nigeria and Egypt are already above 2019 peaks. Although we still have some way uncertainty, there is an appetite among consumers to move and discover. Alongside safe, systematic opening of markets and continued momentum in vaccine roll outs, countries will start to see more signs of gradual travel recovery,” said David Mann, Chief Economist, Asia and MEA, Mastercard.

Some of the key trends that were identified include:

• Global gasoline spending is up 13 per cent from its previous peak in 2019. In Egypt and Nigeria, spend at gas stations have peaked their 2019 levels, while in the UAE and Kenya, they have equalized previous levels. Road trips—the big trend of 2020 around the world—is here to stay . 

• As people prepare to move and socialize again, sales for beauty salons and luggage stores are up. Spending at bike stores (+62 per cent) also grew. Furthermore, sales at toupee and wigs stores have increased 75 per cent in the past year compared to pre-pandemic, with demand in this category also seen among consumers in South Africa. 

• Air travel remains down significantly globally, although the trajectory is upwards. In markets like the UAE, Egypt, Nigeria, and Kenya, international flight bookings are climbing, but are still at a fraction of where they were before the pandemic began. This also holds true for South Africa, although domestic flights (56.7 per cent share) are recovering at a quicker pace, above its 40.9 per cent share in 2019. 

• Global business travel lags global leisure travel by approximately four months. In the Middle East & Africa though, there is a closer correlation to leisure and business travel growth. 

• Limited border reopenings have proven to be challenging for travelers and the travel industry alike. But select open corridors are showing partial recovery. For example, flights out of the Middle East and Africa are gradually improving, with intra-regional travel to Egypt and the UAE most notable.

“The past year has only reinforced how important travel is—to our connection with friends, family and the broader world, to our business communities, and to our personal fulfillment,” said Raj Seshadri, president of data and services, Mastercard. “The economic implications of tourism are vast, with virtually no industry untouched when travelers stay home. Through Recovery Insights, we’ve helped airlines redesign travel routes, retailers rejig inventory, and cities understand shifts in neighborhood spending. It’s about enabling smarter decisions for better outcomes—today and tomorrow. ”

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