market outlook
slowdown in US growth. Expectations are that the US grew by about 2.4% in 2023. The consensus forecast for 2024 is 1.2%.” He noted: “One of the surprising
features of this monetary tightening has been the absence of a rise in financial stress. Although there were some bank failures last year, the fallout was limited, and households and corporates have largely absorbed the higher debt and input costs. We expect financial stress to tick up this year as the effects of rate rises feed through but to nowhere near the levels in previous recessions. “There remain some areas of concern
in the financial system. Our own measure of financial stress indicates above-average risks in the sovereign debt and real estate markets. There are still some concerns about US regional banks. But tighter regulation put in place after the financial crisis means European, UK and larger US banks are better placed to cope with shocks.” No great movement in exchange rates is
expected, meaning US travellers to Europe should continue to enjoy an attractive rate of exchange, while UK and EU travellers to the US could find things costly.
OUTLOOK FOR TRAVEL Every indication at the turn of the year pointed to the continuing strength of
We haven’t seen the full impact yet of some of the cost pressures people face – that might result in people taking seven rather than 10 nights, for example
demand for travel. Deloitte lead partner for travel and aviation Alistair Pritchard suggested: “Despite the economic challenges, there is undoubtedly going to be strong demand because consumers prioritise holidays. “Our consumer tracker, Deloitte Consumer Signals, shows every time that leisure travel is the top area of discretionary spending. It can be higher than some areas of essential spending. Other forms of discretionary leisure spending have struggled. “Of course, we haven’t seen the full
impact yet of some of the cost pressures people face. Consumers will have to think about how much they spend on holidays and that might result in people taking seven rather than 10 nights, for example. We typically don’t see people downgrading on quality but taking shorter breaks or thinking about value for money. I could see some destinations such as Turkey doing well if people are being careful about how much to spend.” He noted: “The big-three tour
CORPORATE travel bookings in 2023 remained down on 2019 (Figure 14) and rising
costs could impact on 2024 (Figure 15). But the leisure consumer demand for
all-inclusive accommodation just goes on rising (Figure 16)
operators have put on additional capacity and increased their Atol licences quite considerably. Of course, there is a difference between an Atol and the actual capacity. A bigger licence sets a higher limit on the numbers, but that doesn’t automatically translate into capacity.
%
10 20 30 40 50 60
0
% of holidaymakers likely to book all-inclusive in 2024
50% 52% 44% 43% 40% 46% 47% 52%
FIGURE 16: ALL-INCLUSIVE DEMAND, 2015-24 By age, children
57%
10 20 30 40 50 60 70 80
0 77% 67% 63% 5 58%8% 51%52% 48% 41% 37% 42% 38% 31% 34% 28% 60% 60% 53%54% 54% 47% 41% 35% 37% 45% 70% 61% 69% 64% 77%
16-24 2015 2017 2019
25-34 2022
35-44 2024
45-54
55+
Children Source: Service Science/ Kantar
Travel Weekly Insight Report 2024 13
2015 2016 2017 2018 2019 2020 2021 2022 2023-24
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