Despite some worrying signs driven by economic issues, panelists on a "Finding Clarity With Data-Led Predictions for 2023" webinar expressed optimism about leisure travel in the coming year. The event was coordinated by MMGY Global, a travel marketing company; and Travelzoo, a travel deals provider.
Chris Davidson, executive vice president of MMGY Travel Intelligence, began with an update of the company's latest Portrait of American Travelers research and it showed:
- Concerns about safety, including health, have improved significantly domestically but are still struggling internationally. "We're on the path back," said Davidson, "but still a bit depressed internationally."
- The number of those who have no plans to travel for leisure jumped from 4% last year to 20% in the latest survey, a "concerning number." Davidson said financial issues like inflation are driving that sentiment. In fact, worries over finances have surpassed Covid in recent surveys.
- Traveler optimism has begun to decline both in terms of perceived affordability and a household's ability to pay.
- The good news is that for those who do plan to travel - still a large percentage - travel intent has stayed consistent at 3.7 trips over the next 12 months. In addition, the amount they expect to spend has risen dramatically to almost $4,000 (it was $5,000 before the pandemic.) The older the traveler the more they expect to travel and the more they expect to spend.
Despite some of those negative insights, Terry Dale, CEO of the United States Tour Operator Association (USTOA) said that his organization sees all travel segments being "robust." He said he has been in airports around the world and "Planes are full, and lounges are full."
While Baby Boomers have been the bread and butter of travel for the past 50 years, said Dale, Gen X and Gen Z - while they may spend a little less - "want to travel and are getting out there." While they may sacrifice some discretionary spending, he said, they will not sacrifice spending on travel.
Aizaz Sheikh, head of marketing for the UK, Canada and the U.S. for Travelzoo, said that psychographic and behavioral segments have become as important as demographic factors like age. He said wellness and sustainable travel - as well as solo travel - should be a focus because consumers with those special interests are motivated to seek unique experiences.
Despite the strong dollar and other issues, said Dale, his organization is not seeing headwinds. He said the organization's forecast for 2023 is healthy and robust for international travel. "We all know it can change tomorrow," he said, noting the incident in Poland that at first seemed like it might widen the war in Ukraine. Apart from that kind of potential crisis, he said, "we see a healthy international landscape."
The media is covering international travel very favorably, said Julie Freeman, managing director of MMGY NJF, the company's New York office. She said that regardless of any economy changes, "people are really traveling internationally."
Sheiks said that his company surveyed members - who do tend to be more adventurous - about how the cost of living might affect their travel. He said almost 80% said they would continue to prioritize leisure travel. However, he said, they also emphasized deals and value in travel so companies should be careful about their pricing.
Asked about the growth of all-inclusive resorts, Sheikh said that because of their interest in deals and because of the growth of family travel, consumers are extremely open to the all-inclusive concept. He added that "after the last couple of years many travelers really want to relax and all-inclusives allow them to do that."
And Dale agreed that because of their value, all-inclusives will never go out of favor. They are easy and convenient, he said, and will remain popular for the foreseeable future.,
Asked about the hottest destinations, Dale said that USTOA would reveal more details at its upcoming conference in early December, but he did say that the Middle East is showing real strength and customer interest.
Travelers, said Freeman, are looking for destinations they haven't discovered before. While they may go back to places they love, there is tremendous interest in secondary and up and coming areas . Added to that is the digital nomad phenomenon with hybrid work structures encouraging people to visit places that have created programs targeted at that segment.
And panelists agreed about the power of sustainable travel. Sheikh said that he had been with the environmentally sensitive tour operator G Adventures for seven years but that the movement is becoming universal.
And Dale said that USTOA sees the next 50 years as an era of sustainability and DEI (diversity equity and inclusion). He thinks "meaningful and purposeful travel will resonate as we move forward." It's the responsibility of the industry, he said, to figure out how the experiences being sold to U.S. customers can help create better lives in destinations. "It's not about feeling good," said Dale; "it's about how we can make a difference as we travel."
Asked about what keeps them up at night, Sheikh said that the industry can leverage technology better. He said he had recently endured several major airport delays and that needs to be improved. He said the industry could also do better in leveraging social media platforms like Tik Tok. "For some reason," he said, "we are not always the first movers."
All agreed that looking ahead, agility and nimbleness will keep the industry healthy. "We have demonstrated that we can do that," said Dale. "We are storytellers and no matter what happens we have to connect at a basic neighborhood level. It's the people and their stories that will make the difference."
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