For today’s traveler, the economy's mixed signals create a complex backdrop for leisure and business travel, shaping travel preferences and spending habits for the remainder of the year. But there is resilience and strength in travel demand globally. Leisure travel from Latin America, Europe, North America and the Middle East remain robust.
The Mastercard Economic Institute’s fourth-annual travel report, Travel Industry Trends 2023, explores key themes facing travel recovery in 2023 and beyond. Below, we highlight today’s travel-related decisions related to destinations and corridors, business travel and tourist spending in Latin America and the Caribbean.
Factors that contribute to the evolving economic and travel landscape:
Elevated interest rates
Rising mortgage payments
Declining asset prices
The tightening of credit lending conditions
New travel rules and routes
Consumer preference for experience over things
Mainland China's reopening
Latin American travelers are embracing new cultures
Emerging travel corridors are fueled by regional economic trends. Not only will a strong U.S. consumer base and a sustained interest in tourism inspire travel to Central America and the Caribbean, but Latin America’s own economic growth has positively impacted its outbound travel.
The Latin American region's travel trends show that the emerging middle class is seeking and expanding their connections with different cultures. Improved air connectivity and competitive pricing have enabled Latin American travelers to explore more international destinations, particularly in Europe.
In early 2023, Latin America’s top 3 international travel destinations include the United States, Canada and the United Kingdom.
Leisure flight bookings in Brazil were up 37% in March 2023 compared to March 2019
Leisure flight bookings in Mexico were up 43% in March 2023 compared to March 2019
Leisure flight bookings in Jamaica were up 129% in March 2023 compared to March 2019
Business travel is recovering in Latin America
Due to remote work and the uncertain macroeconomic environment, the recovery of business travel lags in comparison to leisure travel. Despite these challenges, demand for in-person business meetings remains robust with commercial flight bookings well above pre-pandemic levels. From 2021 through March 2023, countries where more people returned to their offices outperformed commercial flight bookings by a wide margin compared to their more remote-minded counterparts.
Latin America looks to follow the rest of the world in experience-driven spending
Globally, a notable shift in preference emerged following the Covid-19 lockdowns, with travelers increasingly valuing experiences over material possessions. In the Americas, experiences-focused spending remains the outperformer — as seen in Mexico and Colombia — suggesting that travelers are increasingly seeking authentic experiences in destinations across the world.
For an in-depth look and to learn more about the current state of global travel, click here to get access to Travel Industry Trends 2023.