Over the past 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 that our attention is on the year ahead, many popular 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, Demand.AI by RateGain The platform is able to provide year-over-year travel demand insights for popular destinations such as Bali, Cancun, Tenerife and Dubai. If 2020 was the year of COVID and 2021 was the year of vaccines, will 2022 be the year of growth?
By comparing demand data for these four vacation destinations over the January-March period of 2020-2022, we can gauge the temperature of the current travel landscape. Despite the recent emergence of the Omicron variant, should these destinations expect a strong post-pandemic recovery? Let’s look at the data to find out.
Balinese
Bali, the scenic province of Indonesia, draws travelers from far and wide each year with promises of sun, surf, marine life, incredible scenery, stunning sunsets and more. In early January we saw a Consolidated Demand Index of 37 (out of 100) and an 8% (MoM) increase in domestic flight capacity (17.1k). Looking ahead, we expect a Demand Index of 45 in early March along with an expected 47% increase in international travelers (MoM) and a 13.92% increase in Average Daily Rate (ADR).
Source: RateGain Technologies Limited
However, if we look at the demand forecast for Bali year-on-year from 2020 to 2022, we see that both ADR and demand have not increased significantly since the COVID outbreak. Demand for Bali travel has been significantly higher during this period in 2020, while the 2022 forecast appears to be lagging in a similar vein to 2021 demand, but March is expected to top the previous two years.
Source: RateGain Technologies Limited
cancun
Cancun has long established itself as a coveted, sunny destination for tourists looking to escape the harsh realities of winter or vacation abroad. In early January we saw a Consolidated Demand Index of 78 (out of 100), an 8% (MoM) increase in domestic flight capacity (17.3k) and an even more impressive 47% increase in international flight capacity (39.9K). The average daily rate for a 4-star hotel was $309.43, an increase of 23.43%, while the average daily rate for a 5-star hotel is $1,000, an increase of 115.84% . This interest is split between couples and families, with an average booking window of 84 days.
Looking ahead, Cancun’s Consolidated Demand Index remains flat in late February and early March, with 16.4k domestic travelers and 30.4k international travelers expected to visit Cancun’s famous beaches. For this period we see an increase in the standard booking window as families (50%), couples (33%) and solo travelers (17%) want to book their respective trips 118 days before departure. Comparing these data points to 2020 and 2021, when travel was more volatile and inconsistent, we find a stable and reassuring demand forecast.
Source: RateGain Technologies Limited
Tenerife
Known for its spectacular beaches and exciting nightlife, Tenerife is the largest and most populated of the Canary Islands. At the start 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 11,300; however, international travelers saw a significant increase at 19.9,000 (an increase of 55%).
Towards the beginning of March we see a demand index of 75 with 12,000 domestic travelers and 24.4,000 international travelers expected. If we look at the Tenerife Demand Index for 2020 and 2021, we see an increase in demand volatility; notably spikes in traveler interest followed by uncharacteristic troughs. In March in particular, the 2022 Demand Index is much lower than previous years, suggesting that Tenerife’s demand is still lagging compared to pre-pandemic norms, likely due to the continued rise in cases in Europe.
Source: RateGain Technologies Limited
Dubai
Dubai, a consistently popular destination that draws tourists from around the world, recorded a consolidated demand index of 76 in early January, with about 124,000 international travelers arriving in the UAE’s most populous city. The average daily rate for 4-star hotels during this period was $1.6,000 (an increase of 105.68% MoM), while the average rate for 5-star hotels was $2.1,000 (an increase of 20.58% MoM). %MoM). The average booking window is 62 days, with demand evenly split between couples (49%), families (44%) and solo travelers (7%). As we can see from the year-on-year comparison, travel demand in 2022 appears to be significantly stronger than in 2021 during this period due to international tourism associated with iFX Expo in February.
Source: RateGain Technologies Limited
Looking ahead to early March we are seeing a demand index of 56 with 123.2k international travelers expected and a gradual increase in ADR in 4 and 5 star hotels. In fact, Dubai is currently enjoying the highest hotel ADRs of all time.
Source: RateGain Technologies Limited
Last snack
Travelers and hoteliers have shown tremendous resilience during these challenging times and it seems things are on the right track. The hospitality industry will continue to innovate and build for a brighter future, with safeguards in place to prevent the future impact of another pandemic. Travel will emerge stronger and the odds for 2022 look optimistic. For more information on RateGain’s Demand.AI platform, visit click here.
About RateGain
RateGain is a global SaaS solutions provider for the hospitality and travel industry, providing travel and hospitality solutions that generate new revenue every day. We are one of the world’s largest aggregators of data points for the hospitality and travel industry (Source: Phocuswright Report). For more information visit www.rategain.com.
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