Report Overview

This report highlights the latest insights from the Skift Travel Health Index. The index covers travel’s performance since January 2020, up to and including March 2023.

The Skift Travel Health Index is a real-time measure of the performance of the travel industry at large, and the core verticals within it. The Index provides the travel industry with a powerful tool for strategic planning, which is of utmost importance as times remain uncertain.

Skift Research launched the Index in May 2020 as the Skift Recovery Index. At the start of 2022 we rebranded the Index as the Skift Travel Health Index, to reflect some far-ranging changes: the addition of many more indicators, additional data partners, and most importantly, our continued effort to track the industry health beyond the impact of the Covid-19 pandemic.

2023 brings two additional data partners into the fold. TravelgateX has started to provide pricing data for hotel stays, and Nium now provides us with transaction values for flights.

We are also thankful for the continued support of our other data partners: Amadeus, Aviasales, Beyond, CarTrawler, Cendyn, Collinson, Criteo, Duetto, ForwardKeys, Hotelbeds, Key Data Dashboard, OAG, Onyx CenterSource, OTA Insight, RateGain, Shiji Group, Skyscanner, Sojern, Transparent, and TrustYou. Their data allows us to provide you with a monthly assessment of travel’s performance.

Executive Summary

The travel industry remained stable at a 97% recovery in March 2023, the same level as February 2023. Hotels and vacation rentals witnessed a slight decline, but have gained 21 and 29 percentage points (pp) respectively over March 2022. The aviation sector maintained a flat 83% recovery while car rentals witnessed 3 pp gains over the last month.

All regions except North America performed better than March 2022 performance. Latin America and Asia Pacific continued their month-on-month growth trajectory; Asia Pacific achieved almost a full recovery.

This report focuses on the exceptional travel rebound of India which drew the world’s attention when Chinese travel came to a standstill. With India expected to become the most populous nation, overtaking China in 2023, it will be interesting to see the future potential the country brings to global travel.


The Last Leg of Recovery Remains Arduous

Global travel recovery looks stable in March 2023. The Travel Health Index stands at 97, the same level as February 2023. The recovery momentum looks stable, with the index at its highest since 2020. The industry needs a push to achieve the last leg of recovery.

The Potential Impact of a Slowing Economy

Growing inflation could potentially impact travel demand. A recent survey by Cowen and Company that tracks U.S. consumer spending shows that travel is the second-highest category to witness cuts in spending. 51% of respondents planned to reduce travel spend in response to inflation. A deep dive into respondents cutting spend on travel showed that as of February 2023, high earners (those with income beyond $50,000) are the ones making higher travel spending cuts.

Skift Research’s multi-country survey for business travelers shows that companies too have started scaling back business trips. Indian travelers, however, are optimistic about the economic conditions in the country and a vast majority of them do not think it will impact their travel spending. Approximately half the respondents in the other countries surveyed think the economic condition will worsen. The respondents also reported that their company already has, or is expected to cut down on business travel.

The Accommodation Sector Declined

Looking at travel recovery by sector, hotels and vacation rentals declined slightly. Vacation rental and car rental performance, however, have long surpassed pre-pandemic levels. The aviation sector remained consistent at 83% recovery in March. The car rental sector performance improved by 3 pp.

Skift Travel Health Index Performance by Sector

SectorAug-22Sep-22Oct-22Nov-22Dec-22Jan-23Feb-23Mar-23MoM Growth (abs)
Aviation69716670757883830
Hotels979788868410010399-4
Vacation Rentals112107108109115134139138-1
Car Rentals93961041039898106109+3

Hotel search levels have been up, especially in the Asia Pacific region where hotel search surged by 12 pp. Weakening hotel bookings across all regions led to the decline in sector performance. Hotel performance, which signifies actual occupancy and average rates, remained stable across all regions.

The vacation rental sector has consistently outperformed pre-pandemic times. In March 2023, vacation rental bookings as well as performance dropped over the last month, leading to a slight decline.

That said, hotel and vacation rental performance is expected to grow in the coming months.

Transparent data shows that China is expected to lead growth in both occupancy and publicized rates in April 2023. Barring Russia, all countries displayed growth over pre-pandemic performance.

OTA Insight data shows growth in published hotel rates across some major cities worldwide in the upcoming months.

So while the accommodation sector witnessed a slight month-over-month decline, performance remains far above what we saw in March 2022, and forward-looking indicators are positive for the coming months. 

Asia Pacific and Latin America Continue the Upward Trend

Latin America continued its journey upwards and so did the Asia Pacific region. After a strong February, North America, the Middle East, and Africa witnessed a performance decline. While travel performance dipped slightly in March, the first quarter of 2023 has been the strongest since 2020.

Turkey, after a massive performance decline last month, performed exceptionally in March 2023 and now tracks above pre-pandemic levels again. This is surprising, seeing the impact the earthquakes had on the country and the news cycle. Countries in Asia Pacific dominate month-over-month growth, with India and Japan being the strongest-performing countries in the region. China now is not far from full recovery, although this remains largely based on domestic travel substituting international travel. 


Skift Travel Health Index Performance by Country

CountryMar-23Feb-23MoM Growth (abs)YoY Growth (abs)
Turkey10389+14+7
Argentina10394+8+21
Singapore10093+7+34
Japan109104+6+65
India110107+3+25
Italy9997+2+16
China9593+2+49
Brazil108106+1+7
South Africa93930+19
United Kingdom1021020+11
Germany87870+16
Spain101103-1+13
Canada9697-1+8
Thailand9799-2+38
Australia9698-2+10
Russia6567-2+19
France101103-2+9
Mexico117120-3+6
Hong Kong, China7074-4+39
U.S.94100-6-5
United Arab Emirates103109-6+5
Indonesia8794-7+24

India is the Frontrunner in Asia Pacific’s Rebound

India has outperformed other countries in Asia Pacific with a faster tourism rebound. According to Booking.com, Indians have emerged as the most confident travelers in Asia Pacific, with 86% of Indian travelers making travel plans for the year. Projected to surpass China as the most populous country in 2023, India is expected to become the new China in the next five years. Generation Z and Millennials, the cohort that is most eager to travel comprise a major population share in the country, fueling the recovery of tourism.    

Pre-pandemic, the average expenditure for outbound trips for Indians was 35% lower than for Chinese travelers.

However, when Chinese tourism came to a standstill, countries realized that Indians too are big spenders. Skift Research’s survey on business travel showed that 94% of Indians expect business travel spending to increase in 2023 compared to 2019, and around 74% of respondents expect an increase in personal spending on leisure travel this year.

India’s Travel Recovery   

Since mid-2021, travel performance in India has been the driving force for Asia Pacific’s travel recovery.

Looking at aviation performance, domestic travel in the country surpassed pre-pandemic times early last year. While international performance slightly lagged, it has been performing beyond 2019 levels since the second half of 2022. As of the first quarter of 2023, domestic and international demand has been strong.

Inbound hotel and flight searches have increased over the last year. OTA Insight data shows that cities in Asia are at the top of inbound searches in India.

Top Cities with Inbound Hotel Searches in the Last Year 

(March 2022 vs March 2023)

Source CityFlight searches increaseHotel searches increase
Shenzhen1100%900%
Shanghai1200%1500%
Tokyo600%700%
Taipei1800%1100%

Source: OTA Insight

A report by the Ministry of Tourism of India shows that as of February 2023, foreign tourist arrivals in India grew by 292% in 2023 over the last year. However, this is still 21% lower than in 2019. According to RateGain’s India Inbound Travel Trends report, families and couples take a majority share of inbound bookings in India. Family hotel bookings increased from 4% in the first quarter of 2019 to 10% in the first quarter of 2023. France and Spain are the top source markets for families visiting India.

Bangladesh, the U.S., the UK, and Canada still made it to the top of the list of source markets for foreign tourists in India in 2023, however, the market shares have changed.

Hotel published rates in India have grown on average 35-40% above 2019 levels in the last year.

Conclusion

It is fascinating to see the trend of recovery across sectors over the last year. While there is a lot of talk about the impact of the slowing economy on travel, the Travel Health Index has not declined. Vacation rental and car rental performance is at an all time high. The gains in car rental performance made up for the slight decline in hotel performance in March 2023. Overall, the industry stayed at 97% recovery just like last month.The aviation sector with all its struggles since pandemic hit is still at the highest its been in a year. A slight push would bump the global Travel Health Index to full recovery. Having said that, looking at the potential of the sectors apart from aviation that have surpassed pre-pandemic performance, the industry should certainly be aiming to perform way beyond 2019 levels.

India has been the star performer, boosting travel performance in Asia Pacific, and filling the void left by the absence of Chinese travelers. With international hotel chains such as Marriott and multiple other hotel brands aiming to develop hotel properties across the country, there certainly is a lot of optimism surrounding the Indian travel industry. Although Indians are optimistic about the economic conditions of the country in the coming months, it would be interesting to see how travel performance pans out in the future.

Methodology

Data Partners

Skift Research collects and analyzes data from 22 different data partners, to provide the most comprehensive view of the travel industry’s performance. 

Index Design

The Index tracks 84 indicators per country to assess the health of the travel industry in each country. These indicators are aggregated into performance categories and sub-categories. The top level of division is by travel vertical, and each vertical is further divided by intent indicators, booking indicators, and key performance indicators.

The Index covers the following travel sectors:

Country Coverage

The Index focuses on the travel performance in 22 of the largest tourism economies, combined accounting for 62% of inbound tourism receipts, 67% of outbound tourism expenditure, and 78% of global 2019 GDP.

– Argentina

– Australia

– Brazil

– Canada

– China

– France

– Germany

– Hong Kong, China

– India

– Indonesia

– Italy

– Japan

– Mexico

– Russia

– Singapore

– South Africa

– Spain

– Thailand

– Turkey

– U.S.

– United Arab Emirates

– United Kingdom

Index Score Calculation

The Index is designed to provide an easy overview of the health of the travel industry. We have tracked the industry since the beginning of 2020. For 2020, 2021, 2022, and 2023 data, the performance of each indicator is compared to the same time in 2019. The Index provides a score relative to a baseline reading of 100 for the same month in 2019.

The full methodology can be found on our website

Data Tables

Total Skift Travel Health Index Scores by Country

Aug 2022Sep 2022Oct 2022Nov 2022Dec 2022Jan 2023Feb 2023Mar 2023
Argentina96.9110.594.990.592.495.294.3102.6
Australia94.298.194.493.199.4108.197.996.2
Brazil102.4100.597.2103.5104.4109.5106.2107.5
Canada94.199.197.195.496.793.897.395.9
China62.455.955.457.055.974.993.194.7
France100.197.194.095.999.9107.0102.9100.7
Germany81.486.780.882.685.488.587.386.9
Hong Kong, China61.053.455.655.668.556.074.070.0
India106.6106.596.998.2100.4100.1106.5109.8
Indonesia79.880.281.580.682.291.894.286.8
Italy100.8100.795.794.8102.999.997.299.4
Japan63.171.277.573.278.8101.4103.6109.1
Mexico113.6114.1111.0114.3119.0119.8120.3117.0
Russia55.557.552.451.154.168.167.365.2
Singapore83.588.685.187.183.288.092.899.5
South Africa84.186.980.281.977.390.593.193.4
Spain93.294.294.999.2103.9102.3102.5101.3
Thailand73.979.277.979.290.197.098.897.2
Turkey101.8112.2113.8108.8103.4112.989.1103.3
U.S.100.7104.5102.7104.4103.9101.9100.494.2
United Arab Emirates101.8104.8107.8102.9104.7103.4109.2102.9
United Kingdom99.098.497.697.898.5102.8101.8101.6

Aviation Scores by Country

Aug 2022Sep 2022Oct 2022Nov 2022Dec 2022Jan 2023Feb 2023Mar 2023
Argentina81.985.180.278.883.782.681.786.9
Australia84.588.689.990.49492.5101.7102.9
Brazil93.990.789.293.592.2103.198.7102.2
Canada79.883.183.784.887.275.288.588.8
China30.430.328.236.14541.657.058.6
France8582.982.283.986.494.191.395.4
Germany72.872.871.371.176.690.287.389.4
Hong Kong, China18.424.329.234.14635.250.150.5
India98.69892.7104.4111101.6103.6105.6
Indonesia51.355.954.955.157.667.867.361.1
Italy101.1100.498.595108.3112.9105.2109.0
Japan46.557.361.765.673.686.087.593.4
Mexico100.9101.9101.6102.8105.5107.0110.8110.9
Russia73.477.965.367.767.277.974.173.1
Singapore56.863.658.86061.171.677.074.8
South Africa7372.562.261.664.276.974.273.0
Spain9495.383.290.387.1115.4114.8112.7
Thailand616766.6717680.282.079.3
Turkey110.410886.589.387.8106.093.791.5
U.S.91.596.385.185.486.294.194.990.2
United Arab Emirates85.389.484.680.884.396.7101.896.7
United Kingdom86.784.273.276.477.889.890.893.0

Aviation contributes 40% to the total score. The scores in this table have been indexed to give a better insight into performance. 100 = pre-pandemic level.

Hotel Scores by Country

Aug 2022Sep 2022Oct 2022Nov 2022Dec 2022Jan 2023Feb 2023Mar 2023
Argentina114.1146.1112100.2102.5111.3111.9123.3
Australia95.9103.691.696.995.7121.385.977.6
Brazil119.9118.8111.1121.9123.1123.1126.2124.7
Canada112.3124.2109.8111.3107.699.895.393.5
China82.872.858.555.347.894.6108.4101.6
France113.6114.2103.7106.6115.1113.6106.699.0
Germany95.1105.991.794.289.486.288.986.1
Hong Kong, China90.259.958.856.87458.283.572.2
India123.8122.897.389.989.895.8105.5112.7
Indonesia105.39898.495.9100.2113.4116.0104.1
Italy104.7109.8101.398.996.490.391.288.3
Japan76.390.894.281.682.6123.7120.0122.9
Mexico126.4128.1125.4130.1135.4131.3129.7121.6
Russia20.519.319.112.621.849.050.850.9
Singapore100104.896.8109.28696.7104.7117.6
South Africa9498.287.691.272.5101.7114.7115.1
Spain94.393.994.696.198.286.889.690.1
Thailand80.58787.586106.4118.0109.4116.7
Turkey94.4131.8137.1118.6101.3128.485.6118.2
U.S.106.7108.9104107103.8100.399.691.9
United Arab Emirates112.5114.7122.1113.8114.199.1105.595.5
United Kingdom103.1105.5103.8104.7100.3107.2106.3103.0

Hotels contributes 35% to the total score. The scores in this table have been indexed to give a better insight into performance. 100 = pre-pandemic level.

Vacation Rental Scores by Country

Aug 2022Sep 2022Oct 2022Nov 2022Dec 2022Jan 2023Feb 2023Mar 2023
Argentina137.2139.1144.1143.8139.1144.9144.9144.7
Australia134.0138.2137.4103.0141.0139.3135.1138.7
Brazil117.0117.7115.1114.3113.2130.2131.0122.1
Canada109.3101.8113.493.7115.9126.9128.2134.1
China129.6107.8108.3109.0112.3165.2180.0180.0
France124.2122.4122.4125.3122.8131.5132.1132.1
Germany95.096.499.0104.5110.0116.9117.5108.4
Hong Kong, China86.188.084.491.797.964.978.381.9
India98.996.599.7100.2105.2106.6112.8112.3
Indonesia85.089.094.099.6100.596.697.990.6
Italy126.1117.8116.8116.1126.4128.2130.3141.8
Japan68.572.079.298.3112.6120.2123.3138.0
Mexico129.4133.1124.5135.6142.3143.5142.0136.5
Russia106.5112.9112.9112.8112.5113.0113.796.2
Singapore103.6108.2108.1103.2100.6112.1117.3112.9
South Africa82.282.384.083.486.797.997.999.2
Spain112.6114.5116.6119.3131.8137.8134.6132.7
Thailand90.693.494.8102.3102.2123.3136.9129.0
Turkey112.4124.1137.8146.3137.8117.8109.6115.4
U.S.111.8112.7112.3110.3120.3130.8129.1126.4
United Arab Emirates121.0126.5130.7128.6126.6140.3147.1143.3
United Kingdom128.0132.3129.3125.0126.7135.2130.4131.8

Vacation Rentals contributes 10% to the total score. The scores in this table have been indexed to give a better insight into performance. 100 = pre-pandemic level. 2021 VR data for Argentina missing.

Car Rental Scores by Country

Aug 2022Sep 2022Oct 2022Nov 2022Dec 2022Jan 2023Feb 2023Mar 2023
Argentina108.4114.399.582.979.694.188.985.9
Australia109.1106.1106.5103.7110.7110.3106.3105.5
Brazil98.396.493.489.691.998.898.894.3
Canada114.0117.6122.7122.0117.5129.1126.2119.4
China55.556.785.482.566.263.4101.4124.0
France108.7104.0103.3102.6101.0133.6129.9115.5
Germany82.185.784.584.195.685.684.785.7
Hong Kong, China89.8102.1118.4105.0105.8109.5121.6117.5
India102.4107.3114.6109.6103.1110.9121.3121.2
Indonesia102.4107.3114.6109.6103.1110.9121.3121.2
Italy87.181.476.983.3100.980.879.783.7
Japan92.3100.298.795.199.4114.1113.1117.6
Mexico118.3116.3112.9109.2112.7129.8124.0120.5
Russia74.674.674.674.674.674.674.674.6
Singapore121.8123.7118.8114.4111.3119.6127.0120.0
South Africa104.2102.1103.8103.0100.8107.6107.9105.5
Spain88.588.288.394.0106.989.387.687.9
Thailand100.7103.098.393.795.8102.1107.3100.5
Turkey95.488.8102.499.999.3109.995.3104.3
U.S.120.0127.0127.3128.8124.4116.1107.098.2
United Arab Emirates117.8117.9114.9113.1110.4115.9121.2114.4
United Kingdom112.2113.2115.1108.7108.1117.7113.3110.2

Car Rental contributes 15% to the total score. The scores in this table have been indexed to give a better insight into performance. 100 = pre-pandemic level.

Disclaimer: All rights reserved; content based on data provided by Amadeus, Aviasales, Beyond, CarTrawler, Cendyn, Collinson, Criteo, Duetto, ForwardKeys (Forward Data SL), Hotelbeds, Key Data Dashboard, Nium, OAG, Onyx CenterSource, OTA Insight, RateGain, Shiji Group, Skyscanner, Sojern, Transparent, TravelgateX, TrustYou. The content and the data provided in this document are for your information and internal use only. The content is provided “as is” without any warranty as to accuracy, completeness, satisfactory quality or fitness for any particular purpose. It is strictly forbidden to extract, reproduce, republish or publicly display any content included in this document without the prior written authorization of Skift Research. If you wish to use any of this content or similar data, please contact Skift Research for more information.