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Domestic travel makes a comeback


SINGAPORE, 2 July 2021: After flights were largely grounded and travellers stayed home in 2020, the return to travel has become one of the most anticipated and uncertain activities of 2021.

Mastercard released earlier this week its Recovery Insights: Ready for Takeoff? Research which gives a view of key travel trends 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; with Australia surpassing the global average with bookings at 116%.

The report draws on aggregated and anonymized sales activity across the global Mastercard network, along with third-party data sets and proprietary analysis by the Mastercard Economics Institute, to better understand the next phase for travel, its drivers and challenges.

“Although many markets in the Asia Pacific are yet to see international borders open, there are some early bright spots in domestic travel recovery,” said David Mann, chief economist, AP & MEA of the Mastercard Economics Institute. “As travel corridors continue to open and flourish across the US and Europe, Mastercard believes the pent-up demand in the Asia Pacific, exacerbated by extended lockdowns, will follow a similar trajectory in both business and leisure travel, as the region cautiously re-opens its borders.”

Key findings

Business travel lags behind leisure travel by approximately four months globally. Business travel is showing recovery signs worldwide, with Australian domestic business travel bookings at nearly 80% of pre-Covid levels and US domestic business travel back up to just over half of its 2019 average level.

Australia, Malaysia, and The Philippines are all seeing business travel bookings outstripping leisure bookings, offering a glimmer of hope for a strong recovery once travel corridors open up.

Globally, fuel spending is up 13% from its previous peak in 2019. Road trips—the big trend of 2020—are still holding their course. The report shows a robust demand for domestic ground travel, with fuel spending up in Singapore, Hong Kong, The Philippines, and Australia, where areas such as Margaret River and Dunsborough see a swell in local visitors.

With border closures still in place, pent-up savings are helping to drive sales across various categories. For instance, sales at toupee and wigs stores have increased 81% in Australia 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%) grew across the world, as pent-up demand collided with greater savings due to fiscal stimulus and travel restrictions.

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 companies and governments to help them understand ever-changing consumer spending trends and how to address them.

You can view the complete Recovery Insights: Ready for Takeoff? here. This is the fourth report in the Recovery Insights series; other reports can be found here.

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