Mastercard Economics Institute: One in Five Countries Approach Pre-Pandemic Domestic Flight Levels; International Travel Lags...
Global gas spending is up 13%* over 2019 peak,
reflecting rebound in ground travel
As people prepare to reemerge, sales have
increased at barber and beauty shops, bike stores, and toupee and
wigs shops, among other categories
After flights were largely grounded and travelers stayed home in
2020, the return to travel has become one of the most
anticipated—and uncertain—activities of 2021. Today, Mastercard
released Recovery Insights: Ready for Takeoff?, a view into key
travel trends in the air and on the ground, around the world. While
the global travel recovery remains uneven, one-fifth of countries
studied have returned to at least 90% of pre-pandemic levels for
domestic flight bookings.
The report, developed by the Mastercard Economics Institute,
draws on aggregated and anonymized sales activity across the global
Mastercard network to better understand the next phase for travel,
its drivers and challenges. This includes the balance between
leisure and business, local and long-distance, and saving and
spending. The report also looks at the spending categories seeing
an uptick and what they signal for travel recovery.
“While there's been an impressive recovery in domestic air
travel in a number of markets, the rebound won’t happen overnight.
The pandemic brought the industry down to spending levels not seen
in over 15 years,” said Bricklin Dwyer, Mastercard chief economist
and head of the Mastercard Economics Institute. “While a lot of
uncertainty remains, pent-up savings, a desire to venture farther
from home, and the green light from governments could all provide
significant tailwinds for the continued travel recovery.”
Key trends include:
- Global gasoline spending is up 13%* from its previous peak
in 2019. Road trips—the big trend of 2020—aren’t going
anywhere. The report shows robust demand for local travel and
lesser-known locales, such as Devon and Cornwall in the UK. In the
US, more people are also traveling across the country by car, with
25% of vehicle rentals used for interstate travel.
- As people prepare to reemerge, pent-up savings help fuel
sales across a variety of categories. For instance, sales at
toupee and wigs stores have increased 75% in the past year compared
to pre-pandemic, and sales for beauty salons and luggage stores are
also up. Meanwhile, spending at boat dealers (+30%) and bike stores
(+62%) also grew, as pent-up demand collided with greater savings
due to fiscal stimulus and savings from mobility restrictions. The
US followed by Canada, Belgium, and Australia, had the most
'excess' savings as a percent of annual personal consumption
- Air travel remains down significantly globally, with some
positive pockets. According to the analysis, one-fifth of
countries studied have returned to at least 90% of pre-pandemic
levels for domestic flight activity. While some—including the U.S.,
Australia and France—are exceeding pre-pandemic domestic flight
bookings, others—such as Canada, Thailand and New Zealand—are at a
fraction of where they were before the pandemic began.
- Global business travel lags global leisure travel by
approximately four months. Global business travel is
showing recovery signs, with Australia domestic corporate travel
bookings at nearly 80% of pre-Covid levels. Additionally, US
domestic corporate travel is back up to just over half of its
average level from 2019.
- Border reopenings have fueled 10 interesting travel
corridors. The limited border reopenings have proven to be
challenging for travelers and the travel industry alike. But the
select open corridors such as between Australia and New Zealand and
between the US and Latin America and the Caribbean are meeting and,
in some cases, exceeding pre-pandemic levels.
“The past year has only reinforced how important travel is—to
our connection with friends, family and the broader world, to our
business communities, and to our personal fulfillment,” said Raj
Seshadri, president of data and services, Mastercard. “The economic
implications of tourism are vast, with virtually no industry
untouched when travelers stay home. Through Recovery Insights,
we’ve helped airlines redesign travel routes, retailers rejig
inventory, and cities understand shifts in neighborhood spending.
It’s about enabling smarter decisions for better outcomes—today and
Mastercard launched Recovery Insights to help businesses
and governments better manage the economic risks presented by
Covid-19. Through this initiative, Mastercard has provided
data-driven insights, analytics and other services to businesses
and governments to help them understand ever-changing consumer
spending trends and how to address them.
For instance, early last year, a leading Asia-Pacific airline
leveraged Mastercard Test & Learn to understand what was
driving performance during the pandemic. It was discovered that
trip duration greater than seven days grew by nearly two-thirds,
and tickets bought months in advance grew by roughly half. Building
on these insights, the airline was able to instantly adjust their
strategy in real-time to optimize their sales and better serve
Mastercard provides peace of mind to our cardholders ensuring
ease, simplicity and value as they travel. For select
- Mastercard Travel & Lifestyle Services helps our
cardholders return to travel through travel planning, offers,
booking and 24/7 hands-on concierge support - a service even more
important now with ever-changing travel rules and regulations along
with health concerns.
- With the lowest hotel rate and hotel stay guarantees—along with
insurance coverage for trip cancellations, lost luggage, ride share
protection, rental cars and more—cardholders can have peace of mind
that they will be covered during their travels, always getting the
best value and exactly what they paid for.
- Plus, Priceless.com provides travelers with
once-in-a-lifetime experiences, offers, such as Mastercard
Travel Rewards, and benefits at their destinations.
You can view the full Recovery Insights: Ready for Takeoff?
here. This is the fourth report in the Recovery Insights series;
other reports can be found here.
*Gasoline figures are not price adjusted
© 2021 This presentation and content are intended solely as a
research tool for informational purposes and not as investment
advice or recommendations for any particular action or investment
and should not be relied upon, in whole or in part, as the basis
for decision-making or investment purposes. This content is not
guaranteed as to accuracy and is provided on an "as is" basis to
users, who review and use this information at their own risk. This
content, including estimated economic forecasts, simulations or
scenarios from the Mastercard Economics Institute, do not in any
way reflect expectations for (or actual) Mastercard operational or
About Mastercard (NYSE:MA)
Mastercard is a global technology company in the payments
industry. Our mission is to connect and power an inclusive, digital
economy that benefits everyone, everywhere by making transactions
safe, simple, smart and accessible. Using secure data and networks,
partnerships and passion, our innovations and solutions help
individuals, financial institutions, governments and businesses
realize their greatest potential. Our decency quotient, or DQ,
drives our culture and everything we do inside and outside of our
company. With connections across more than 210 countries and
territories, we are building a sustainable world that unlocks
priceless possibilities for all.
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