Covid-19 briefing

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- ECONOMIC IMPACT -

Latest update: 17 March

The US economic forecast for 2022 has been revised by Goldman Sachs to 1.75% from its earlier projection of 2%.

The European Central Bank forecasts Eurozone GDP to grow by 3.7% in 2022 and by 2.8% in 2023.

5.3%

The unemployment rate in OECD nations stood at 5.3% in January 2022, unchanged from the previous month.

3.8%

According to the US Labor Department, 678,000 jobs were added in February 2022, with unemployment declining to 3.8% from 4% in the previous month.

Impact of Covid-19 on EMPLOYMENT OUTLOOK

- SECTOR IMPACT: TRAVEL AND TOURISM -

Latest update: 4 March

Impact on airlines

The airline sector is recovering gradually from Covid-19, but revenue passenger kilometres (RPKs) are still estimated to be only 40% of pre-crisis levels in 2021.


Major airline companies such as International Airlines Group predicts a return to profit in 2022. It said it had more than halved its losses to $3.9bn in 2021, having cut staff numbers and costs during the pandemic.


It may still recover this year if its operations avoid further impact from the pandemic. However, the Ukraine crisis looks to be another setback.

IMPACT ON INTERMEDIARIES

For the fourth quarter of 2021, major online booking platforms showed strong signs of recovery. For the quarter, Booking.com posted revenue of $3bn, which was up by 141% from the previous year.


Its competitors echoed similarly impressive growth. Expedia experienced 148% top-line growth in the same period, and Airbnb posted 78% revenue growth for the same quarter.

KEY TRAVEL AND TOURISM DEVELOPMENTS

Short term

Restrictions and testing requirements are still in place, even as travel opens back up, which is still deterring many from travelling.

Travel bubbles and travel corridors will branch open for more countries. Covid-19 test and vaccination requirements are now part of the new normal.

Long term

Consolidation is a possibility, but airlines are likely to be smaller companies for the next two to three years. Lowcost carriers will benefit and are likely to be the first to expand their market presence.

Intermediaries are seen by many as a necessary aid when booking so demand will return. Direct bookings with providers could increase due to flexible cancellation policies offered.