Global tourism will return to pre-pandemic levels in 2024

Global tourism is still recovering after the pandemic. The number of foreign trips last year increased globally by almost 34%. This year in Europe and the USA it will exceed the results from 2019. This is also visible in the good results of companies from the tourism industry. This week, Airbnb presented its fourth quarter results, reporting an increase in demand for accommodation. And this despite the restrictions introduced by cities on short-term rental of real estate. And next week Booking.com will publish its results.

Airbnb with a significant increase in revenues

Airbnb recorded a 16,6% increase in revenue in the fourth quarter. compared to the same quarter a year earlier. Revenues amounted to $2,22 billion, while analysts expected an increase of $2,17 billion. However, the company recorded a loss of USD 0,55 per share (net loss of USD 349 million), which resulted from the need to pay a one-time tax of USD 1 billion. Without this expense, Airbnb would have posted earnings per share of $0,76 per share.

CHECK: Tourism and entertainment – ​​investment prospects after COVID-19 [Guide]

The company also recorded a 12 percent increase. an increase in the number of booked accommodations and attractions (the company does not report accommodations themselves). The gross value of a single accommodation reservation was USD 156,7 (an increase of 2,6%). Gross margin is 82,7 percent. (81,9% a year earlier).

The company has 7,7 million accommodation offers on its platform, offered by 5 million hosts. Most of them (3,5 million) have only one offer on the platform, and only 0,6 percent hosts have 20 offers or more. This means that the company successfully attracts individual tenants and introduces new properties to the market. This is especially important in the context of many restrictions that cities impose on renters, but on Airbnb they mainly concern renting a larger number of apartments. In some situations, the regulations go even further, such as in New York, where the authorities have banned the entire rental of private apartments, only renting is possible when the owner is also in the apartment. After the move, the number of listings on Airbnb in New York dropped by more than 70%. New Orleans and Dallas also introduced regulations last year. But discussions related to Airbnb's impact on local real estate markets are taking place in many cities, mainly in the US and Europe.

This is why Airbnb is trying to diversify its sources of income by attracting owners from outside urban areas to the platform. And it also focuses on global expansion in places that have previously been less popular on the platform. In 2023, the company recorded the highest growth in markets in Asia and Central and South America. The company also promotes long-term stays - encouraging property sellers to offer discounts on such stays. In 2023, weekly stays accounted for 40% and monthly stays 19%. reservations on the platform.

Forecasts for the first quarter of 2024 indicate revenues of USD 2,03-2,07 billion. However, the percentage increases may not be so spectacular, as the results for the first quarter of 2023 were very high, mainly due to the strong rebound in demand after the pandemic period. It is worth noting that Easter, which is a period of increased demand for hotel services, in 2023 fell in the second quarter, and this year it will be at the turn of the quarters, which may improve the results of the first quarter and worsen the results of the second quarter.

We are waiting for Booking.com's results

It will also present its results for the 22th quarter on February 4 Booking.com, which, like Airbnb, operates as an intermediary on the tourism market without owning its own properties. Analyst forecasts call for quarterly EPS of $29,7. This is up from a year earlier, when it was $24,7. However, much less than in Q3, when it was $72,3. In recent quarters, the company has always exceeded analysts' expectations by 7 (for Q3 2023) to 30 (for Q2 2023) percent.

Tourist traffic is returning to normal

According to data World Tourism Organisation tourist traffic in the world in 2023 increased by 33,9%, and there were 1,28 billion foreign trips worldwide (tourist arrivals are counted). This is still less than before the pandemic, in 2019 it was 1,48 billion. The biggest increase was 155%. was recorded in Asia, which was the latest to start opening up after the pandemic. The number of tourist arrivals in Asia is still only 2/3 of the pre-pandemic level. Chinese tourists - the most important in this market - are eager to travel domestically, tourism here has already reached the level of 2019, but the market is still waiting for the revival of demand for trips abroad from China. In the US, foreign arrivals increased by 26,6%. and constitute 90,5 percent. the level from 2019, in Europe it is 17,4 percent, respectively. and 94 percent If the current growth rate is maintained, the number of foreign arrivals to Europe and the US should reach record levels in 2024, exceeding 2019 levels. If we add to this the increase in prices of tourist services resulting from inflation - an average trip abroad in 2019 cost USD 998, and in 2022 USD 1145 (we do not have data for 2023 yet). It can be concluded that on the American and European markets, income from tourism should be at the pre-pandemic level.

About the author

Pawel Majtkowski - analyst eToro on the Polish market, which shares its weekly commentary on the latest stock market information. Paweł is a recognized expert on financial markets with extensive experience as an analyst in financial institutions. He is also one of the most cited experts in the field of economy and financial markets in Poland. He graduated from law studies at the University of Warsaw. He is also the author of many publications in the field of investing, personal finance and economy.