Travel is finally back — a new era of growth is beginning

The global travel industry is set to fully recover from the Covid-19 pandemic this month, according to U.N. Tourism.

During the first nine months of 2024, international arrivals worldwide reached 98% of pre-pandemic levels, compared to the same period in 2019, it said.

The remaining 2% gap will close this month, according to the organization, marking a momentous shift in the industry into a new era of growth.  

Most regions around the world have already crossed that threshold, most notably in the Middle East, where international arrivals were up 29% during the first nine month of 2024 from the same period in 2019, according to U.N. Tourism. Growth in the region during that timeframe was led by an increase of visitors to Qatar (+141%) and Saudi Arabia (+61%), it said.

Africa and Europe have also fully recovered, with arrivals up 6% and 1%, respectively, it said.

The Americas are close, closing in at 97% (-3%) of international arrivals this year, while Asia-Pacific is at 85% of pre-pandemic levels, as the region continues to bear the brunt of the slow return of Chinese travelers.

International travel in Asia-Pacific may be lagging behind today, but it’s expected to be the epicenter of global travel growth in the coming decades.

Air passengers are expected to more than double in less than two decades — jumping from 8.69 billion in 2023 to 19.49 billion by 2042, according to Airports Council International Asia-Pacific and Middle East.

Much of that growth is projected to come from Asia-Pacific. In the next 20 years, the airport trade organization estimates that more than one-third of new flyers will come from three countries: China, India and Indonesia.  

Hospitality companies are aggressively expanding in the region in anticipation of the millions of people who are projected to enter the middle class in the next decade.

On “Squawk Box Asia” Monday, Hilton’s Asia-Pacific President Alan Watts announced that the company now operates 1,000 hotels in Asia-Pacific, a goal the company didn’t expect to reach until 2025.

“That’s 200,000 bedrooms a night for sale. We have another 915 [hotels] in the pipeline and various stages of construction,” he said.

On Nov. 19, Hilton announced a deal to open 150 Spark by Hilton hotels in India, a “premium economy” brand launched by the company in 2023.

“We just inked a deal in Vietnam for 14 mid-scale hotels,” said Watts. “So it is the rise of that mid-scale traveler that’s fueling the bottom of the pyramid.”

Marriott International opened the first Four Points Flex by Sheraton in Japan in November, CEO Anthony Capuano told CNBC Travel in an interview on “Squawk Box Asia” on Nov. 18. Twelve more are expected to open in Japan before the year-end, according to Marriott.

Global recovery has been thwarted by the slow return of two types of travelers: Chinese outbound travelers and business travelers.

But Watts said both are rebounding, albeit at different speeds.

“Business travel is back with a vengeance,” he said.

Excluding China, he said, booking trends for business travelers in the first half of 2024 were “absolutely great, particularly for Southeast Asia.” And “next year is on track to be even better than that.”

He told “Squawk Box Asia” that 2024 has been a “tale of two halves” for Chinese travelers.

The first half was marked by depressed consumer confidence, Watts said. But increased travel interest in the second half will impact on bookings in Asia-Pacific in 2025 — most notably to Japan, Korea and Southeast Asia, he said.

“But we think it’s going to be 2026 before we see the recovering long-haul China market into the U.S. and into Europe,” he said.