4th April, 2023
2023 is poised to be a pivotal year for the travel industry. After the tumultuous events of the last two years, tourism is finally showing signs of rebounding.
According to the latest Visit Britain forecasts, we can expect to see 35.1 million visits to the UK in 2023, which is 86% of the 2019 level and 18% higher than in 2022. This uptick is expected to generate £29.5 billion in spending, a figure that is 104% of the 2019 level and 14% higher than in 2022. While the past couple of years have been a bit of a rollercoaster, it looks like we're finally on the upswing.
While the current pace of flight bookings is slightly weaker for those arriving in January, they are very strong for March/April and are above 2019 levels so far. However, recent trends suggest that this elevated pace may ease downwards in the coming weeks. The forecast assumes that the pace of flight bookings will remain around its current rate in the short term, with a gradual return to 2019 volume levels by around mid-2025.
Although overall visit levels in 2023 are forecasted to be below 2019 levels, there are likely to be some months where numbers may surpass 2019 levels. For example, visits from European markets are expected to recover quicker than long-haul overall, reaching 88% of the 27.3 million visits in 2019. Meanwhile, long-haul markets are expected to generate 11.0 million overseas visits to the UK in 2023, which is 81% of the 13.6 million in 2019. We're also likely to see some variation across source markets, with some regions bouncing back more quickly than others.
Of course, there's still some uncertainty about how things will play out, especially with the ongoing COVID situation and global economic challenges. The global economic situation is expected to be challenging, which will likely mitigate against a swift return to pre-pandemic levels of tourism volumes or (in real terms) value. The forecast assumes that cost of living pressures will not intensify and that inflation will ease from its current level in line with forecasts, although it will remain above the normal level in 2023, putting pressure on travellers’ spending power.
A major unknown is whether an easing of inflation will encourage spending and therefore travel, or whether there will be a delayed reaction to the intense inflation seen in late 2022 in travellers’ booking and spending patterns in 2023.
The forecast is therefore predicated on a delicate and challenging balance. While there will be a minority of travellers who remain nervous about COVID and will be deterred, many are keen to travel again. Cost of living pressures may inhibit travel for some, but most regular/occasional international travellers will still go abroad. Spending power will be constrained, but prices will push up nominal spending. Overall, we're likely to see a positive 2023 ahead.