The profitability of travel retail will grow 3.3% to 3 billion dollars in 2024. External factors like political uncertainty may affect travel retail data, according to an Euromonitor report.
Clouds on the horizon of global travel industry stays steady. In constant terms, the future of travel will continue to grow by 3.3% year-on-year the next four years. The sector, which today generates a business of 2.5 billion dollars, will reach around 20 billion dollars in 2024, according to the latest report by Euromonitor on travel health. However, there are external threats that could impact the future of travel.
The report states that international arrivals will reach 1.8 billion trips and the size of domestic tourism is expected to reach 19 billion worldwide. An increase that, for Euromonitor, will be driven by the increase in revenue of emerging markets which will, in turn, make prices more accessible for a wider range of the population. As for the average spend per arrival, Euromonitor forecasts a slight increase to 1,100 dollars in 2024 (compared to 1,088 dollars in 2019).
However, Brexit, the potential exit of the United Kingdom with no deal and the trade war between China and the United States, generates certain skepticism towards where consumers’ steps will be oriented. The likelihood of a No-Deal, where the U.K. leaves the EU without an agreement, has a probability rate of 20% over a one-year horizon.
Euromonitor states that international arrivals will reach 1.8 billion trips and the size of domestic tourism is expected to reach 19 billion worldwide
In the European Union, the number of air operations (take-offs and landings) is estimated to increase 1.9% over the next five years. The travel perspective is limited by the economic situation of the country. In the United Kingdom, if by January 31, 2020 (deadline for Brexit) the deal is still not reached, the country’s GDP will suffer a 3% drop.
Regarding the growing political and trade tensions between the United States and China, flights from the United States to China would decline by 3%: from 165 million operations generated this year, to 160 estimated for 2024 if the conflict between Trump and Xi Jinping continues. On the contrary, flights departing from the Asian country with final destination United States would only reduce its operations by one million.
Climate change also draws a paradigm shift in travel. The need for sustainable development is the creation of new models and digital tools to encourage destinations transition to a sustainable tourism model.