According to experts, the travel industry will see more profits next year as the Covid-19 restrictions worldwide eased.
The International Air Transport Association (IATA) expects the travel industry to earn more than this year. They project that earnings to top $4.7 billion next year. The profits will come from the expected 4 billion passengers to fly across places. The projection eased the mood among travel companies as they struggled during the pandemic, with losses amounting to billions.
“The recovery is going well. There’s still a long way to go to get back to where we were in 2019. But we are heading in the right direction,” said Director General Willie Walsh.
“There will be challenges in 2023. But, quite honestly, these challenges are relatively small compared to what we’ve come through,” he added.
Since 2020, travel companies have felt the brunt of the Covid restrictions. As per a recent tally, the cumulative losses of the industry totaled $137.7 billion. After a year, the losses went down to $42 billion due to a shortage in staff and flight cancellations. However, Walsh added that even when many nations lifted some restrictions, there were still some burdens that the industry carried.
“That’s why we’re optimistic that we can manage a way through these and get the industry back into very small levels of profitability, but profitability nonetheless,” Walsh said.
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Travel problems will lessen
The IATA said that total revenues for companies next year will reach $779 billion. The spike in ticket sales is due to the rebound in travel demand. According to them, North America will experience more travelers next year. European travelers and the Middle East follow this. However, traveling in China will still be difficult as the nation faces strict policies from Xi Jinping.
“Passenger demand is expected to reach 85.5% of 2019 levels throughout 2023. And 4.2 billion travelers expected to fly,” said the IATA report.
“Revenues are expected to be $149.4 billion, which is $52 billion less than 2022 but still $48.6 billion stronger than 2019,” it added.
“I think most of that is behind us. So we should be confident that those issues have been resolved. But, certainly, there is no excuse for the airports not to deliver good service as we go into 2023,” Walsh added.
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Catching up to 2022
As the holidays kicked in, many airlines experienced increasing demand. For instance, United Airlines and Delta reported increased demand during the holidays. And experts contend the trend will continue until this year’s last month.
“I know there are some pretty significant macro shifts in spending – out of goods and into services, which we are a beneficiary of,” said Ed Bastian, CEO of Delta.
“After two years of delaying travel, it is clear that consumers are getting out and seeing the world. So we’re glad to see people back on the road,” he added.
“We are seeing a lot of strength for the holidays or approaching the Thanksgiving period, and our bookings are incredibly strong. However, the bookings are a little bit different this year, and they’re more spread out across multiple days than on any single day,” explained Andrew Nocella, United Airlines’ chief commercial officer.