It’s December 2024. You’re a credit union analyst, reviewing the year’s performance. Amidst the fiscal summaries and projections, one sector stands out – air travel. A surprising resilience in the face of global economic uncertainties has marked this industry, defying skepticism brought about by an array of global geopolitical challenges.
Global Air Travel Trends 2023
This January, The International Air Transport Association (IATA) reports a consistent rise in air travel through 2023, with every indication that it will continue into 2024. For November 2023, International traffic rose 26.4% compared to the same period in 2022. North American carriers experienced a 14.3% rise in international traffic for the same comparison point, while their capacity increased 16.3%.
This trend continues, even as major players in the travel industry adopt a more cautious stance, evidenced by a notable decline in mergers and acquisitions during 2023. Additionally, the allure of the United States as a tourist destination has somewhat dimmed, attributed to its rising costs compared to other global destinations.
Challenges and Opportunities
Despite these challenges, the demand for air travel remains robust. IATA’s data reveals a complex tapestry of growth patterns. Although not uniformly spread, the general trajectory points towards continued expansion. This underlines an essential reality for the travel industry – the need for readiness.
Being ready goes beyond ensuring flight availability and accommodation; it’s about a holistic approach to travel – up-to-date destination information, comprehensive emergency plans for natural disasters, and consumer services to smooth the journey from purchase to enjoyment.
For financial services businesses, particularly credit unions, this presents an unmissable opportunity. As international travel surges, so does the demand for related financial products like travel insurance and foreign currency. These services are not just peripheral offerings but integral to the traveler’s experience. To meet the modern traveler’s sophisticated needs, these services must combine user-friendliness, transparency, and competitive pricing.
Financial Services: Adapting to a Mobile World
The recent data from IATA, plus other analysis such as recently reported by Bloomberg on the US travel industry’s current state, highlight a clear trend. Despite global economic headwinds, the appetite for travel – and by extension, travel-related financial services – is buoyant. Credit unions, known for their member-focused approach, are uniquely positioned to capitalize on this demand. By offering services like travel insurance and foreign currency exchanges, they can provide immense value to their members.
A key solution lies in partnerships with platforms like Money 4 Travel. This smartphone services revolutionizes foreign currency purchases for the consumer. Plus, there’s ease of use and cost-effectiveness, both at the point of sale and in back-office functions. By integrating such services, credit unions can offer their members a seamless travel experience, reinforcing their on-going commitment to meeting members’ requirements.
Credit Unions can Grow Their Strategic Role in Travel Finance
The robust demand for air travel, despite economic uncertainties, is a clarion call for financial services, including credit unions. It’s an invitation to analyze the data, understand the trends, and prepare to meet continued growth in demand for travel-related financial services. As we step into 2024, the message is clear: watch the data, be ready, and seize the opportunity to be an indispensable part of your members’ travel journeys.
By Declan Morton, staff writer at Money 4 Travel and Essiell Ltd.
Sources:
Air Travel Reaches 99% of 2019 Levels as Recovery Continues in November, IATA, January 10, 2024
$1.2 Trillion US Travel Industry Is Plummeting, Says New Study, Euromonitor International / Bloomberg, January 12, 2024
Global Travel and Tourism Sector Deal Activity Plunges 31.9% in 2023, HNR Hotel News, January 11, 2024
