However, extreme weather events, shortages of human resources, and waves of strikes are still risk factors for the development of the tourism industry.
The summer of 2023 is considered a busy summer for the Germany-based TUI Group, one of the largest tourism companies in the world. TUI reported that from April to June this year, more than 5.5 million visitors enjoyed its services, up from 5.1 million in the same period last year.
The group's earnings before interest and taxes rose to 169.4 million EUR, compared with a loss of 27 million EUR during the same period last year. This is good news for TUI because during the 2020-2021 period, the company suffered record-high losses and had to receive a bailout from the German government to overcome the crisis.
The strong rise in travel and tourism demand in the summer also offered clear signs of a rebound for the aviation industry. German airline Lufthansa expects a record profit of up to 2.6 billion EUR in 2023, which could be the year with the highest revenue in its 70-year history. British low-cost carrier EasyJet has just released data showing a record 203 million GBP in pre-tax profit in the third quarter of fiscal 2023.
In June, the International Air Transport Association (IATA) said that the number of air travellers globally will skyrocket in 2023 and return to near the level of 2019. According to the IATA, economic uncertainties have not dampened tourism activity, even when fares rise due to higher fuel costs.
Signs of recovery in the tourism and aviation industries in the post-coronavirus period have been seen since last summer after many countries abolished their closure policies put in place to curb the coronavirus. Surging travel demand is one of the factors behind the congestion and chaos at European airports in the summer of 2022, with other causes including severe staff shortages and waves of strikes.
IATA expressed its confidence that airlines can overcome this year's travel peak thanks to the experience gained from last year’s chaotic summer.
Despite a bright outlook, the tourism industry still faces a range of challenges, of which climate change is a prominent issue. Severe heat all over the world, from Asia to Europe and the Americas, has prompted many tourists to change their travel habits.
In Greece, thousands of tourists had to be evacuated from the islands of Rhodes and Corfu, due to the intense heat and its attendant wildfires. The country announced it will offer a free Rhodes holiday in 2024 to tourists affected by the wildfires. Credit ratings agency Moody's said that the heat could reduce the appeal of southern Europe to tourists, or at least reduce demand in the summer, resulting in negative consequences for the economy.
The labour shortage is also a persistent issue for the tourism industry. The US Department of Transportation is working to recruit 1,800 more air traffic controllers by 2024. The World Travel and Tourism Council (WTTC) said that the Japanese service tourism industry needs up to 5.6 million workers in 2023.
According to some experts, however, the massive recruitment is a “double-edged sword”, as questions remain about the sustainability of tourism demand recovery. Waves of workers' strikes are still happening in some European countries, disrupting aviation operations.
Like other industries, the tourism industry is facing many opportunities and challenges. The COVID-19 pandemic has forced the tourism sector to transform itself in a sustainable direction with the ability to withstand the crisis better, thereby contributing to the overall growth of the global economy.
