Source: RateGain Technologies Limited

Over the last two years, domestic and international travel has been almost entirely off the table in select parts of the world in the wake of the COVID-19 pandemic. Now, with the attention shifted to the year ahead, many popular travel destinations are anticipating an influx of pent-up travel interest.

Using the power of AI and real-time indicators such as flight capacity, news, world events and restrictions, number of bookings, and more, RateGain’s Demand.AI platform is able to unlock year over year travel demand insights for popular travel destinations like Bali, Cancun, Tenerife, and Dubai. If 2020 was the year of COVID and 2021 was the year of vaccinations, will 2022 be the year of growth?

Comparing demand data across these four holiday destinations over the January to March period from 2020 2022, RateGain is able to take the temperature of the current travel landscape. Should these destinations expect a strong recovery period on the heels of the pandemic, despite the recent emergence of the Omicron variant? Let’s look at the data to find out.

Bali

Bali, the picturesque province of Indonesia, attracts travelers from far and wide every year with promises of sun, surf, marine life, incredible scenery, breathtaking sunsets, and so much more. At the beginning of January, RateGain saw a consolidated demand index of 37 (out of 100) and an 8% increase (MoM) in domestic flights capacity (17.1K). Looking forward, RateGain sees a demand index of 45 in early March, as well as a 47% increase (MoM) in international travelers expected, and a 13.92% increase in average daily rate (ADR).

Source: RateGain Technologies Limited

However, when RateGain looks at Bali’s demand forecast year over year from 2020 to 2022, the company notices that both ADR and demand have not increased notably since the COVID outbreak. Bali travel demand was notably higher during this period in 2020, while the forecast for 2022 appears to be lagging in similar fashion to 2021 demand, but is set to outperform the previous two years in March.

Source: RateGain Technologies Limited

Cancun

Cancun has long established itself as a sought-after, sunny destination for tourists eager to escape the harsh realities of winter or spend holidays abroad. At the beginning of January, RateGain saw a consolidated demand index of 78 (out of 100), an 8% increase (MoM) in domestic flight capacity (17.3K), as well as an even more impressive 47% increase in international flight capacity (39.9K). The average daily rate for a 4-star hotel was $309.43, which signifies an increase of 23.43%, while the average daily rate for a 5-star hotel is $1,000, which indicates an increase of 115.84%. This interest is split between couples and families, with an average booking window of 84 days.

Looking forward, at the end of February and beginning of March, Cancun’s consolidated demand index remains the same with 16.4K domestic travelers and 30.4K international travelers expected to descend upon Cancun’s famous beaches. For this time period, RateGain sees an increase in the standard booking window, as families (50%), couples (33%) and solo travelers (17%) look to book their respective trips 118 days in advance of departure. Comparing these data points back to 2020 and 2021 when travel was more volatile and inconsistent, RateGain identifies a stable and reassuring demand forecast.

Source: RateGain Technologies Limited

Tenerife

Tenerife, known for its spectacular beaches and exciting nightlife, is the largest and most populous island of the Canary Islands. At the onset of 2022, RateGain saw an incredibly high demand forecast, with a consolidated demand index of 84 (an increase of 109% MoM). Domestic Flight Capacity was slightly lower than usual at 11.3K; however, international travelers expected saw a significant surge at 19.9K (an increase of 55%).

Towards the beginning of March, RateGain sees a demand index of 75, with 12K domestic travelers and 24.4K international travelers expected. Looking at Tenerife’s demand index across 2020 and 2021, RateGain sees an influx of demand volatility; specifically, spikes in traveler interest followed by uncharacteristic lows. In March, specifically, the 2022 demand index is much lower than previous years, indicating that Tenerife’s demand is still lagging compared to pre-pandemic norms, likely due to Europe’s continued surge in cases.

Source: RateGain Technologies Limited

Dubai

Dubai, a consistently popular destination attracting tourists from around the world, enjoyed a consolidated demand index of 76 at the beginning of January, with approximately 124K international travelers arriving in the most populous city in the United Arab Emirates. The average daily rate for 4-star hotels during this period was $1.6K (an increase of 105.68% MoM), while the average rate for 5-star hotels was $2.1K (an increase of 20.58% MoM). The average booking window is 62 days, with demand split fairly between couples (49%), families (44%), and solo travelers (7%). As RateGain can see from the year over year comparison, travel demand in 2022 over this period appears to be significantly stronger than it was in 2021, due to international tourism affiliated with the iFX Expo in February.

Source: RateGain Technologies Limited

Looking forward to the beginning of March, RateGain sees a demand index of 56, with 123.2K international travelers expected and a gradual increase in ADR across 4 and 5-star hotels. In fact, Dubai is currently enjoying its highest ever Hotel ADRs.

Source: RateGain Technologies Limited

Final Takeaway

Travelers and hoteliers have demonstrated tremendous resiliency during these challenging times, and it seems like things are on the right track. The hospitality industry will continue to innovate and build for a better tomorrow with safeguards to preempt the future effects of another pandemic. Travel will emerge stronger, and the opportunities for 2022 look optimistic. For more information on RateGain’s Demand.AI platform, click here.