As a result of COVID-19, 2020 and 2021 were very slow years in terms of passport shipments. The year 2022 saw a major recovery, particularly in Europe and North America, as travel limitations ceased and pent-up demand for passport renewals reemerged. Despite strong recovery in these regions, 2022’s shipment figures remain below those achieved in 2019; passport shipments in Asia remained slow in 2022, particularly due to China’s strong COVID-19 policies. In January 2023, China has restarted passport issuance, which, alongside the upward trajectory elsewhere in the world, will contribute to a much stronger year in 2023 for the global passport market.
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COVID-19's Impact on the Passport Market, and Lingering Chip Supply Difficulties
As a response to the COVID-19 pandemic restricting international travel, demand for passport renewal unsurprisingly declined. The year 2020 saw the worst of the impact, at a roughly 50% decline in shipments globally from the year before, with 2021 seeing some recovery, but continuing to be heavily affected. As for 2022, further recovery occurred. However, global passport shipments still didn’t surpass 2019’s pre-pandemic figure, though shipment figures for those 2 years only differ by a slim margin. Overall, recovery in 2022 was fairly strong, though differing considerably by region. For this reason, the varied extent of recovery across regions should be examined more closely in order to understand the market in greater depth.
In addition to the direct effects of the pandemic on the market, ongoing chip shortage problems remain an additional market factor to consider. As with a broad range of industries, chip sourcing persisted to constrict the passport market and play heavily into what was, and still is, a very challenging moment for Identity (ID) document and systems vendors. Across the last few years, despite being less affected than many other end markets due to the critical nature of citizens’ IDs, the chip shortage served as an additional limiting factor placed on ID document manufacture. The year 2022 was still reasonably strongly impacted, with wafer supply being the main constraint in the chip supply chain. Easing is expected going into 2023, which will compound recovery of the passport market as it moves further out from the pandemic.
Regional Differences in Passport Recovery
Europe and North America experienced a strong recovery in 2022. With travel limitations having ceased, and the eagerness of citizens in more economically developed regions to return to international travel, the pent-up demand of missed passport renewals rushed back in quickly. Additionally, the Russia-Ukraine conflict inspired a further spike of demand in Eastern Europe, playing even more into the high shipment figures across these regions, which drove the global recovery represented by 2022’s near-2019 shipment levels.
Conversely, Asia has seen a much slower recovery. Across the region, there has generally been a much stricter set of international travel rules, resulting in demand not returning in the same way as regions where travel restrictions have been lifted. Most notably, China’s extremely tight COVID-19 regime has largely impacted shipment figures. Passport issuance in China was halted during the pandemic, and given China’s vast population, has made a significant impact in terms of the market’s quantity. For this reason, with similar rulings mirrored in other Southeast Asian countries, the region as a whole does not match the strong 2022 numbers seen in Europe and North America. India can also be considered as a main component of Asia’s comparatively slower market recovery, where passport shipments are expected to ramp back up across a longer time frame. As of January 8, 2023, issuance in China has recommenced. The Chinese government expects travel to return to 70% of 2019’s level in 2023, indicating a probable strong bounce back of shipments as citizens apply for new passports.
2023 Will Be a Strong Year for the Passport Market
China beginning to issue passports once again in 2023 will drive huge shipment quantities. Combined with the upward trajectory seen in much of the rest of the world, 2023 is expected to be a strong year for the passport market. Vendors will continue to focus on chip sourcing and capacity as the market returns to normal, with large unfulfilled demand needing to be met. From 2023 onward, once pent-up demand has been managed by issuers struggling with quantities, the pandemic’s effect on passports will be able to be considered as mostly surpassed.