The global travel industry is comprised of a wide variety of businesses, from hotels and inns to casino resorts, trains, buses, airplanes, cruise ships, tour operators and travel bookers, both online and physical.
Both the United Nations and the World Travel & Tourism Council (WTTC), estimate that more than 1.3 billion tourists traveled the world during 2015.
WTTC found that the global travel and tourism industry supported 108 million jobs on a direct basis in 2015.
The industry generated $2.2 trillion in direct global contribution to GDP (gross domestic product).
In most parts of the world, hotels and resorts have been enjoying good to excellent occupancy rates, which enabled them to raise prices, while many new properties have been built or are under construction in promising markets.
Business travel has grown substantially in recent years, while leisure travel has been generally strong worldwide.
Nonetheless, when members of the European or American middle class do take a vacation, it is generally on a reduced budget.
Businesses are sending more employees on trips, but keeping a tight rein on costs at the same time.
A survey by analysts at PwC forecast that 2015 U.S.
hotel industry occupancy rates would be higher than at any time since 1981.
ADR, average daily room rate, has also been seeing superior growth.
For 2017 the study forecast an average daily revenue per available room
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The global travel industry is comprised of a wide variety of businesses, from hotels and inns to casino resorts, trains, buses, airplanes, cruise ships, tour operators and travel bookers, both online and physical. Both the United Nations and the World Travel & Tourism Council (WTTC), estimate that more than 1.3 billion tourists traveled the world during 2015. WTTC found that the global travel and tourism industry supported 108 million jobs on a direct basis in 2015. The industry generated $2.2 trillion in direct global contribution to GDP (gross domestic product).
In most parts of the world, hotels and resorts have been enjoying good to excellent occupancy rates, which enabled them to raise prices, while many new properties have been built or are under construction in promising markets. Business travel has grown substantially in recent years, while leisure travel has been generally strong worldwide. Nonetheless, when members of the European or American middle class do take a vacation, it is generally on a reduced budget. Businesses are sending more employees on trips, but keeping a tight rein on costs at the same time.
A survey by analysts at PwC forecast that 2015 U.S. hotel industry occupancy rates would be higher than at any time since 1981. ADR, average daily room rate, has also been seeing superior growth. For 2017 the study forecast an average daily revenue per available room (RevPAR) increase of 3.7%.
In the U.S., over a period of several years, major airlines cut routes and reduced the total number of seats available, partly by removing older, fuel-guzzling aircraft from service. This put the airline industry in a much more efficient operating condition. By 2015, business was so good that many airlines were adding to the number of available seats. Meanwhile, airlines have been getting a profit boost from the lower cost of fuel, thanks to declining oil prices.
U.S. airlines are also operating with much smaller staff counts recently than they were in previous years. For example, the number of employees in the U.S. scheduled airline industry plummeted from 485,000 in 2003 to 429,900 in 2016. To a large extent, airlines were able to renegotiate union contracts in recent years in order to reduce wage costs. By 2015-2016 however, unions were being much more demanding, as they could see the very high profits that airlines were generating. It is also vital to note one additional shift in airline strategy: today, they rely heavily on fees for services such as checked baggage, seats with extra legroom and on-board food.
For the near future, advanced new aircraft will bring significant changes in the global airline industry. For example, Boeing’s highly advanced 787 enables international airlines to offer great enhancements to passenger comfort with extremely long intercontinental range, while the airlines benefit from a fuel efficiency boost of about 20%. Airbus competes with similarly efficient, long-haul aircraft.
Perhaps more important is the spectacular demand from global airlines for single aisle planes to replace older models that are not particularly fuel-efficient. Boeing will build a new high-efficiency version of its exceptionally popular 737, to be called the 737 MAX, which will compete with a similar offering from Airbus, an A320neo model with a new engine option. Enormous numbers of both of these aircraft will be sold over the long term.
Among international carriers, the upstart Emirates has carved out a place for itself as a major long-haul airline. It offers routes spanning the entire world with a major hub in the Middle East. Etihad is another Middle Eastern carrier that is getting rave reviews for its first class suites.
Discount airlines remain very important players in the U.S. as well as in Europe and the rest of the world. Outside the U.S., good examples include Dragonair in China and Ryanair in Europe.
E-commerce continues to play an extremely important role in the travel sector, making booking convenient for consumers and more cost-effective for travel providers. However, online travel booking sites like Orbitz and Expedia face tough competition. Airlines and hotel chains operate their own powerful online reservation systems, with rich features, multiple levels of photos and descriptions, and programs for managing frequent traveler rewards. Hotels, in particular, have been devising new strategies to win customers away from online travel agencies, offering many advantages to guests who book directly.
The cruise line business has enjoyed solid growth. Consumers see cruises as high-value package deals, and cruise ships are nearly full at all times. Some of the newest ships, such as Royal Caribbean’s “Allure of the Seas” are among the largest passenger ships ever built. Approximately 12.4 million passengers sailed on cruises originating in North America during 2015, up from 12.1 million in 2014. Plunkett Research forecasted that 12.5 million would sail in 2016. The cruise industry is expanding into niche markets, including ships operated specifically for Chinese passengers, as well as more river cruises and adventure cruises.
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