Like most years, 2022 has been a mixed bag. The war in Ukraine rages on, as does punishing inflation. The stock market is well on its way to its worst performance since 2008, the height of the last Financial Crisis. But after almost three years, COVID-19 seems relegated to the back burner. According to TSA checkpoint numbers, domestic travel is up over 2021 and is comparable to the last “normal” travel year, 2019.
What can we expect for 2023? The urge to dust off the crystal ball and take a look ahead is irresistible.
1. International travel will eventually return full force in 2023, led by business and leisure travelers to and from China. China is reopening to the world after three years of dealing with the COVID-19 pandemic, including the draconian ‘zero COVID’ policies of 2022. Starting January 8, 2023, travelers arriving in China will no longer have to quarantine. This will be good news to thousands of Chinese exhibitors and attendees of the 2023 Consumer Electronics Show in Las Vegas, which ends on the same date.
Chinese citizens will also soon be able to travel overseas, a development eagerly awaited by tourism officials from Thailand, Australia, the US, and other countries. In the U.S., overseas arrivals stubbornly remained 30% below 2019 levels in October, something the arrival of Chinese leisure and business travel groups will do a lot to fix.
2. U.S. domestic leisure travel is back, and business travel will soon follow. The limitations of management by Zoom or MicrosoftMSFT -1.9% Teams have become glaringly obvious. Even in a recession, gotta get out there and sell your product, your services, your company, yourself, and there’s no better way to do it than face to face. The US Travel Associations says nearly eight in 10 current business travelers expect to attend a conference, convention, or trade show in the next six months.
3. U.S. international travel is coming back too. A recent poll says 31% of Americans are more interested in international travel than domestic, probably due to pent-up demand. United says it will add about 10% more capacity to Europe and other destinations in 2023, Delta says it will add 8%, and JetBlue will add Paris to its London transatlantic service. While inflation and high fuel prices have increased fares and most travel costs, the dollar is strong against currencies like the Euro and yen.
4. Airline stocks will come back as U.S. and international travelers do. (Once the weather settles down and airlines fix broken systems.) Of course, this prediction has been made before. When Warren Buffett dumped his airline stocks in April of 2020, American Airlines, one holding, had fallen to just 11.57 a share on April 17. That June President Trump said Buffett had made a mistake selling too soon. But almost three years later, despite a huge government bailout that kept the airlines alive until traffic could return post-COVID, American was still trading around 12.50 a share. But as people book for what could be a record-breaking spring and summer, airline revenue, and perhaps even profit, will return.
5. Cruise lines, too, will come back. An eye-opening article in The Street showed that Royal Caribbean and Carnival have an interesting strategy to counter destinations like Venice and Key West banning the big boats. Instead, the cruise lines are building their own private islands and ports, as well as ever-more luxurious ships that are destinations in themselves.
With such cruises, Americans will get off the couch—or take the couch with them. The cruise ship expansion mirrors the RV explosion of the pandemic years. Give people a couch, a tv, a bed and a toilet and they’ll cruise the highways or the high seas.
Of course, this stock prediction could well be wrong. While passenger numbers are up, and so are prices for both flights and cruises, that doesn’t automatically translate into an out-of-the-toilet stock price rise. As economist John Maynard Keynes said, “Markets can stay irrational longer than you can stay solvent.”
6. But not every destination will ban cruise ships or say, “Tourist go home.” Many destinations will mute their destructive hardball campaign against tourists. A certain island state, perhaps aware of the negative and contradictory messages it has been putting out about tourism, recently reached out to journalists with a survey about their perceptions of the “welcome” being extended. There seems to be more awareness that tourists frustrated by COVID restrictions, lack of rental cars and accommodations, and accusations of unto wards activities, might find a friendlier destination.
7. Virtual travel, while an interesting concept, will be a tough sell. The idea is that groups will “go on” a live tour on Zoom led by a local guide. “Enjoy a guided live and interactive virtual experience exclusively for you and your group… Revisit a place you love or make new unforgettable memories somewhere else.” Virtual travel does avoid real travel hassles and delays, at a fraction of the cost.
8. Flying cars will not arrive, again. I look forward to seeing new flying car mock-ups at CES 2023 and will try not to mock the “movement” too hard. Still, many of us will want to think twice before these things fly over our freeways and houses.
9. Middle Eastern travel will continue to grow, with the success of the Abraham Accord and the opening of Saudi Arabia. The Internet buzzed with photos of the Hotel Abraj Kudai in Mecca, which with 10,000 rooms (and six helicopter pads) has the potential to be the world’s largest hotel.
Despite the lingering effects of the pandemic, the World Cup in Qatar was a travel success. Qatar Airways operated some 14,000 flights during the competition. Emirates is dusting off its Airbus A380 and other aircraft for renewed international travel. Long-time runner-up Etihad is flexing its muscles, with the return of the ultra-luxury A380 three room Residence First Class suite, and 28 (!) upcoming flights a week from Abu Dhabi to the U.S.
10. Airline dreamers will keep dreaming impossible dreams. A reasonably priced all-business class airline (La Compagnie) from the US to Europe. Long distance nonstop flights to mouthwatering destinations, like Los Angeles to the Caribbean. (Cayman Air.) Private jets for all (who can afford to pay.) And everyone’s favorite, low cost, long haul airlines like Norse Atlantic, French Bee, Level, etc.
If half of these dreams, promises and predictions come true, 2023 could be a very good year to travel indeed.