Taking a Closer Look at Demand and Recovery Trends for 4 Major Holiday Cities
Over the last two years, domestic and international travel has been almost entirely off the table in select parts of the world in the wake of the COVID-19 pandemic. Now, with our attention shifted to the year ahead, many popular travel destinations are anticipating an influx of pent-up travel interest.
Using the power of AI and real-time indicators such as flight capacity, news, world events and restrictions, number of bookings, and more, RateGain’s Demand.AI platform is able to unlock year over year travel demand insights for popular travel destinations like Bali, Cancun, Tenerife, and Dubai. If 2020 was the year of COVID and 2021 was the year of vaccinations, will 2022 be the year of growth?
Comparing demand data across these four holiday destinations over the January to March period from 2020 2022, we are able to take the temperature of the current travel landscape. Should these destinations expect a strong recovery period on the heels of the pandemic, despite the recent emergence of the Omicron variant? Let’s look at the data to find out.
Bali, the picturesque province of Indonesia, attracts travelers from far and wide every year with promises of sun, surf, marine life, incredible scenery, breathtaking sunsets, and so much more. At the beginning of January, we saw a consolidated demand index of 37 (out of 100) and an 8% increase (MoM) in domestic flights capacity (17.1K). Looking forward, we see a demand index of 45 in early March, as well as a 47% increase (MoM) in international travelers expected, and a 13.92% increase in average daily rate (ADR).
However, when we look at Bali’s demand forecast year over year from 2020 to 2022, we notice that both ADR and demand have not increased notably since the COVID outbreak. Bali travel demand was notably higher during this period in 2020, while the forecast for 2022 appears to be lagging in similar fashion to 2021 demand, but is set to outperform the previous two years in March.
Cancun has long established itself as a sought-after, sunny destination for tourists eager to escape the harsh realities of winter or spend holidays abroad. At the beginning of January, we saw a consolidated demand index of 78 (out of 100), an 8% increase (MoM) in domestic flight capacity (17.3K), as well as an even more impressive 47% increase in international flight capacity (39.9K). The average daily rate for a 4-star hotel was $309.43, which signifies an increase of 23.43%, while the average daily rate for a 5-star hotel is $1,000, which indicates an increase of 115.84%. This interest is split between couples and families, with an average booking window of 84 days.
Looking forward, at the end of February and beginning of March, Cancun’s consolidated demand index remains the same with 16.4K domestic travelers and 30.4K international travelers expected to descend upon Cancun’s famous beaches. For this time period, we see an increase in the standard booking window, as families (50%), couples (33%) and solo travelers (17%) look to book their respective trips 118 days in advance of departure. Comparing these data points back to 2020 and 2021 when travel was more volatile and inconsistent, we identify a stable and reassuring demand forecast.
Tenerife, known for its spectacular beaches and exciting nightlife, is the largest and most populous island of the Canary Islands. At the onset of 2022, we saw an incredibly high demand forecast, with a consolidated demand index of 84 (an increase of 109% MoM). Domestic Flight Capacity was slightly lower than usual at 11.3K; however, international travelers expected saw a significant surge at 19.9K (an increase of 55%).
Towards the beginning of March, we see a demand index of 75, with 12K domestic travelers and 24.4K international travelers expected. Looking at Tenerife’s demand index across 2020 and 2021, we see an influx of demand volatility; specifically, spikes in traveler interest followed by uncharacteristic lows. In March, specifically, the 2022 demand index is much lower than previous years, indicating that Tenerife’s demand is still lagging compared to pre-pandemic norms, likely due to Europe’s continued surge in cases.
Dubai, a consistently popular destination attracting tourists from around the world, enjoyed a consolidated demand index of 76 at the beginning of January, with approximately 124K international travelers arriving in the most populous city in the United Arab Emirates. The average daily rate for 4-star hotels during this period was $1.6K (an increase of 105.68% MoM), while the average rate for 5-star hotels was $2.1K (an increase of 20.58% MoM). The average booking window is 62 days, with demand split fairly between couples (49%), families (44%), and solo travelers (7%). As we can see from the year over year comparison, travel demand in 2022 over this period appears to be significantly stronger than it was in 2021, due to international tourism affiliated with the iFX Expo in February.
Looking forward to the beginning of March, we see a demand index of 56, with 123.2K international travelers expected and a gradual increase in ADR across 4 and 5-star hotels. In fact, Dubai is currently enjoying its highest ever Hotel ADRs.
Travelers and hoteliers have demonstrated tremendous resiliency during these challenging times, and it seems like things are on the right track. The hospitality industry will continue to innovate and build for a better tomorrow with safeguards to preempt the future effects of another pandemic. Travel will emerge stronger, and the opportunities for 2022 look optimistic. For more information on RateGain’s Demand.AI platform, click here.
RateGain Travel Technologies Limited is a global provider of SaaS solutions for travel and hospitality that works with over 2200+ customers in over 100+ countries helping them accelerate revenue generation through acquisition, retention, and wallet share expansion. Founded in 2004 and headquartered in India, today RateGain works with Top 23 of 30 Hotel Chains, Top 25 of 30 Online Travel Agents and all the top car rentals including 8 Global Fortune500 companies. RateGain is one of the world”s largest processors of electronic transactions and price points for the travel and hospitality industry and is the largest Software as a Service (“SaaS”) company in the hospitality and travel industry in India. It offers travel and hospitality solutions across a wide spectrum of verticals including hotels, airlines, online travel agents (“OTAs”), meta-search companies, vacation rentals, package providers, car rentals, rail, travel management companies, cruises, and ferries. For more information, please visit www.rategain.com Follow us on Linkedin for the latest news, data and insights.