New research from Oxford Economics, commissioned by industry tech-giant Amadeus, has suggested the travel industry is poised for a period of sustained growth over the next decade.
This growth will be a largely driven by China, as it grows to become the largest outbound travel market by 2023.
The report - entitled Travel:Macro trends driving industry growth over the next decade - predicts an optimistic macro-economic outlook for global travel over the next ten years, with the industry projected to grow 5.4 per cent per annum.
This outstrips expected global GDP growth by some two per cent.
Moreover, global travel is now set to grow at a significantly faster rate than during the financial crisis, where growth was just 4.1 per cent per annum.
“The global travel industry is gaining strength and changing as it emerges from the recent recession in developed countries,” explained Andrew Tessler, associate director, Oxford Economics and the report’s author.
“China’s development is an important driver but there are actually many more subtle factors also at play.
“Shifting competitive dynamics and the persistence of new behaviours that emerged during the recession are both impacting key indicators in the sector.”
Before 2023, China’s growth in outbound travel, which as recently as 2005 stood at just one per cent, will enable it to overtake the US to become the world’s largest outbound travel market this year, with the number of Chinese households able to afford overseas travel set to more than double in the next ten years.
China will also become the biggest domestic travel market by 2017, driven largely by rapidly increasing GDP, rising employment levels and higher consumer spending.
However, the report indicates that growth will not be exclusive to China, with forecasts showing that other large emerging markets such as Russia, Brazil, India, Indonesia and Turkey will each also average more than five per cent annual growth over the next ten years.
This will be driven largely by rising wealth and changing consumer habits.
Holger Taubmann, senior vice president, distribution, Amadeus. “As the complexities in the business travel market clearly demonstrate, growth will be far from evenly distributed and there are likely to be both winners and losers.”
He added: “At Amadeus our people, our technology and our innovation are dedicated to helping our customers and partners to shape the future of travel, and to this end we are continually committed to better understanding our industry and encouraging debate and discussion around the topics that matter and have implications for the entire sector.”
The study draws on detailed macro-economic modelling as well as qualitative interviews with industry experts, to forecast a wide range of future trends, including pockets of growth and opportunity that will shape the next decade of travel.