Three years after the onset of the Covid-19 pandemic, international tourism is on the road to full recovery as mobility restrictions around the world have been lifted.
A World Trade Organization (WTO) report concludes that travel demand appears to be resilient in the current adverse economic environment.
In addition, the reopening of China‘s borders in early January 2023 is expected to boost regional and global travel.
China has emerged as the largest outbound and outbound market for tourism spending in recent years.
In 2022, tourism growth was largely driven by European countries and the United States due to the strength of the U.S. dollar.
The appreciation of the U.S. dollar against major currencies is partly responsible for the slower growth in other commercial services trade in 2022.
This aggregate category, which covers different types of services from business services to financial services, increased 2%, compared with 13% in 2021.
The European Union and the United Kingdom accounted for half of trade in these services, which made up the bulk of services trade in 2021 (64 percent).
International tourism
Travel, which accounted for nearly a quarter of services trade before the pandemic, as well as passenger transport, were hit hard by border closures and quarantine requirements.
Despite a remarkable 79% recovery growth in 2022, global overseas traveler spending was still 22% below pre-pandemic levels as Asia remained closed.
The euro and sterling depreciated 11% and 10%, respectively, in 2022. This impacted, for example, global financial services, which fell 3% in U.S. dollar terms, although both major players posted export gains.
However, the rise in interest rates to combat inflation, the slowdown in economic activity and uncertainty due to the war in Ukraine also weighed on the sector.
On the other hand, the WTO indicated that freight rates have largely returned to pre-pandemic levels.
In the week ending March 31, 2023, the global spot rate for 40-foot container units fell to $1,481, just 14% above 2019 prices in the same period.
As prices continue to fall, the outlook for the shipping industry is bleak, at least through the first half of 2023.
