How higher cost of living impacts travel spend in Africa
As summer travel season takes shape, let’s find out the impact of the higher inflation environment and squeezed consumer pockets from the higher cost of living crisis on travel spend in Africa. Bayo Adedeji, Group CEO of Wakanow joins CNBC Africa for this discussion.
Wed, 19 Jun 2024 12:00:02 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- The surge in inflation and increased cost of living in Africa has significantly reduced the affordability of international travel for consumers, leading to a decline in travel activities.
- The depreciation of local currencies against major foreign currencies has resulted in a surge in travel costs, making overseas trips more expensive for African travelers.
- While corporate travel remains steady, leisure travel has been impacted by the financial burden on consumers, prompting a shift towards domestic tourism and exploration of local destinations.
- The resilience of the African consumer is highlighted as potential travel demand recovery is anticipated once currency values stabilize and international travel restrictions are lifted.
As the summer travel season approaches, the higher inflation environment and increased cost of living are significantly impacting travel spend in Africa. In Nigeria, the National Bureau of Statistics reported that inflation wiped out about 7.6 trillion naira of consumer spending last year. This inflationary trend has led to a decline in international travel, with the cost of travel soaring due to the depreciation of local currencies against major foreign currencies. To discuss the implications of these economic challenges on the travel industry, Bayo Adedeji, the Group CEO of Wakanow, shared his insights in a recent interview on CNBC Africa. Adedeji highlighted the substantial decrease in travel affordability for consumers, especially in popular destinations like the UK where the cost of a trip has nearly doubled compared to the previous year. As a result, more individuals are turning to local tourism and exploring nearby destinations to compensate for the high travel expenses. The rise in domestic travel activities has been notably observed in Nigeria, where there is an unprecedented influx of travelers exploring local attractions and experiences. While corporate travel remains relatively stable post-pandemic, leisure travel has taken a hit due to financial constraints on consumers. Adedeji emphasized the resilience of the African consumer and projected a potential resurgence in travel demand once the currency stabilizes and international travel restrictions ease.
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