Impact of inflation on travel and tourism worldwide - statistics & facts
After being hit hard by the COVID-19 pandemic, the travel and tourism market had to face another major challenge: a dramatic increase in global inflation. The sharp rise in consumer prices caused a surge in travel-related costs, cutting back the purchasing power of tourists. While monthly inflation rates worldwide declined significantly in 2024, a global poll indicated that inflation still ranked as one of the most important problems facing the world in 2025. Given that the travel and tourism sector includes a wide range of industries, such as transportation, hospitality, and recreation, how is this issue individually impacting each market?
Looking at food and drink establishments, the inflation rate of restaurants, cafés, and similar services in the EU declined gradually in 2024. However, it remained high compared to pre-pandemic figures, with year-over-year growth of 4.5 percent in December 2024. In contrast, the consumer price index of catering services in the United Kingdom grew at a slower pace, 3.6 percent, whereas recreational and cultural services reported one of the highest inflation rates of travel and tourism services in the UK.
Although the global inflation rate slowed down in 2024 and is forecast to decline further in 2025, the consequences of the rise in the cost of travel will not vanish overnight. In 2024, worries about higher travel prices, the economic situation, and personal finances were still the main concerns of European travelers.
Impact of inflation on travel and tourism industries across the world
The travel price index (TPI) published by the U.S. Travel Association gives an overview of the monthly price changes across different travel and tourism industries in the United States. According to the December 2024 TPI, airline fares were among the main drivers of inflation for the U.S. travel and tourism sector that month, with the price index rising by almost eight percent over the previous year. Meanwhile, passenger transport by air also recorded one of the highest inflation rates of travel and tourism services in the European Union in December 2024, together with package holidays and accommodation services.Looking at food and drink establishments, the inflation rate of restaurants, cafés, and similar services in the EU declined gradually in 2024. However, it remained high compared to pre-pandemic figures, with year-over-year growth of 4.5 percent in December 2024. In contrast, the consumer price index of catering services in the United Kingdom grew at a slower pace, 3.6 percent, whereas recreational and cultural services reported one of the highest inflation rates of travel and tourism services in the UK.
Impact of inflation on travel planning and behavior
As the cost of travel and tourism services increased and consumer spending power went down, travelers had to inevitably consider the risks caused by inflation and adjust their plans accordingly. In a 2024 survey on the main ways to deal with holiday costs in the United States, half of respondents said they were cutting back on other expenses or taking advantage of discounts in order to afford a vacation. Meanwhile, booking cheaper accommodation services and reducing the number of destinations were the main strategies to adapt travel plans due to inflation in Europe in 2024.Although the global inflation rate slowed down in 2024 and is forecast to decline further in 2025, the consequences of the rise in the cost of travel will not vanish overnight. In 2024, worries about higher travel prices, the economic situation, and personal finances were still the main concerns of European travelers.
