Executives in the travel business anticipate that international travel is finally back in 2023, especially with China travelers emerging from lockdown to traverse the world once more.

Matt Goldberg, president and CEO of Tripadvisor, said on his company's first-quarter earnings call that appetite for international travel is higher than it's ever been.

"While travelers are just starting to kick off the peak planning period for summer holidays, summer travel intent is already significantly higher than last year at this time by advanced planners," Goldberg said. "Our data also suggests that share of international travel intent is returning to pre-pandemic levels in the U.S. and [Europe, Middle East and Africa] and [Asia-Pacific] intent to travel is more than double than last summer. We're also observing an increase in experiences searches year-over-year, particularly in Europe."

This week, however, reports emerged from China that a new omicron variant of COVID-19 labeled XBB is behind a surge of new cases, according to Forbes. New weekly infections in China could reach as many as 40 million by the end of May, and as many as 65 million per week by the end of June.

But in late April and early May, executives from hotel brand companies, real estate investment trusts and even home-sharing platform Airbnb were excited about the potential recovery of international travel demand this year. Executives shared their expectations for the segment for the rest of the year during first-quarter earnings calls.

"MGM China is experiencing a rapid recovery following the lift of public health policy restrictions. Our first-quarter outperformance in Macau is a direct result of a meticulous preparation and well-executed plan put together by our team in MGM China who ensured that we are ready to capture market share and drive results upon reopening. ...

"Osaka has approximately 30 million people within a three-hour transit time of our site in Yumeshima. Our site in Osaka is also expected to drive international tourism in Japan given its proximity to other major Asian countries. And I will remind all that Osaka is closer to many Northern Chinese cities than any other gaming market. Considering that will likely be our ... first integrated resort offering for some time in Japan, we believe this project will generate a minimum high-teens free cash-flow yield."

"Daily visitation to Macau ... has been steadily on the rise month-after-month since January after travel restriction was lifted. In March, daily visitor counts averaged about 50% in the first quarter; and April is already at 75% of 2019 levels. If you walk around the streets, you can already see the pre-COVID hustle and bustle in the atmosphere has reemerged in Macau into the resort and the streets. ... We think that the market will continue to recover as more and more gaming customers and leisure travelers make their first post-pandemic trip to Macau."

"First-quarter U.S. and Canada business transient revenues surpassed 2019 levels for the first time since the pandemic began, and cross-border travel has continued to rise globally. However, it is still a few hundred basis points below 2019, when guests traveling abroad accounted for nearly 20% of total room nights. Additional upside is expected to come primarily from Asia-Pacific, given international airlift to and from China is still well below pre-pandemic levels. ...

"We did see in the quarter that Mainland China RevPAR was fully recovered to 2019 levels. But remember, the vast majority of that recovery was domestic demand. At the end of the quarter, only about 20% of the international airlift in China had recovered. By April, it was recovered about 40%, and we do expect a stronger and stronger return of international demand in China through the balance of the year."

"In Greater China ... roughly three-quarters of the business typically is domestic. Well, right now, it's over 90% domestic. There is the reality that there's going to be more travel both in and out of Greater China ... as the airlift improves. We would expect to see that help other parts of the world, but also more travel into China. In terms of the segment, it's seeing the recovery in segments very similar to the way that we saw it in other parts of the world.

"The one difference being that on special corporate and business transient in China, that is recovering much more quickly than it did in the U.S. For example, overwhelmingly, people are back in their offices in Greater China, while in the U.S., there's obviously much more of a hybrid mix. We are actually seeing all of the segments recover more in line with each other, rather than necessarily one after another, the way it was in the U.S."

"While people may have a little less to spend, they're spending more of it on experiences and a lot less of it on things. You see that throughout the economy. And ... finally with China opening up — while it's not back anywhere near where it has been — international travel is really on a steep up slope. ...

"China has been a little bit slower to pick up steam on the development side. It is picking up steam. Particularly, as we think about next year, I think it's going to be big net contributor. ... China won't contribute what I would have hoped it would this year, but I think it will be made up for next in '24 and '25 because the engines are really cranking up. It's just a process. It will be conversions, international growth and increased market share of what does get done in the U.S."

"In the Middle East and Africa region, RevPAR increased 32% year over year and 42% versus 2019, led by strong rate growth and group demand. In the Asia-Pacific region, first-quarter RevPAR was up 91% year over year and down only 4% versus 2019. RevPAR in China was down 5% compared to 2019, 32 points better than prior quarter, as demand recovery accelerated due to the lifting of COVID restrictions. The rest of the Asia-Pacific region also saw significant improvement, with RevPAR, excluding China, up 19% versus 2019, representing an 11-point improvement versus prior quarter."

"We feel really good heading into the summer actually, and the business in Europe has been just astonishingly strong. It is tracking ahead of 2019 in the mid- to high single digits in business transient. Leisure is ahead of '19 significantly.

"I thought '22 was going to be the breakout year for Europe. I was off by a year. This is really the breakout year for Europe. We're seeing people come back to travel, including business travel, in a more pronounced way relative to 2019 than we've even seen in the United States."

"We haven't seen any changes in overall demand trends in our industry in the last 60 days. Business travel continues to recover. Both group and transient demand related to conventions is getting back to normal. International inbound travel continues to improve with Europe closing in on pre-pandemic levels, and Asia at the early stages of its recovery with a long way to go."

"First-quarter international RevPAR improved sequentially, and will continue to present a significant tailwind for us for 2023. Overall, it was up 20% versus 2019 and up 37% to prior year, really with strong growth across all of the regions in constant currency, which was in line with our expectations. Canada was up 30%, which was good to see. Southeast Asia, which is now back to 2019 levels, was up 40%. And Europe has come back strong. Germany has been very strong with RevPAR now running over 20 points ahead of where it was back in 2019.

"The standout for us internationally was Latin America, which was up 60% in the quarter with Mexico continuing to lead the way into their high season. I was down there with the team last week, and they’re having a very strong April. And then, of course, China, we’re very happy to see what we expected to come in, up 15% year over year as both inbound and outbound travel in China ramps back up."

"The increasing return of business travel in groups demand has been notable in Europe as has the return of major events and expos in other markets such as Japan, Australia and India. Other destinations such as Thailand marked those that only recently have seen the benefit of international travel resuming.

“Strong trading has seen continued improvement in our group-wide RevPAR performance, with China demonstrating remarkable recovery since the lifting of restrictions in December 2022, and both the Americas and the [Europe, Middle East, Africa and Asia] regions showing no signs of weakening."

"More guests are traveling overseas and returning to cities. Cross-border gross nights booked increased 36% in [the first quarter] compared to last year. We were especially encouraged by the continued recovery of Asia-Pacific as nights booked in [the first quarter] increased more than 40% year over year. And we saw international travel from other regions to Asia-Pacific increase 160% during the quarter compared to this time last year. Additionally, cross-border nights booked to North America increased once again, with 34% of year-over-year growth in [the first quarter] relative to 31% last quarter. And we've also seen high-density urban nights booked increase 20% year-over-year."

Editor's note: Chris Nassetta serves on the board of directors of CoStar Group, Hotel News Now's parent company.

(This story was updated on May 24 to include the latest news on the XBB omicron variant in China.)

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