Where the Travel Industry is Headed in 2018

If Johnny Carson’s Carnac the Magnificent was still on television, he would probably have a field day predicting next year’s trends in the travel industry.

After all, this year created a lot of fodder for jokes and puns.

The reality, however, is that there are so many changes happening rapidly in the industry that it’s hard to keep up with it all, though there are some travel experts who already see the serious changes for next year.

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According to Stan Sandberg, founder of TravelInsurance.com, travel insurance has been growing consistently since 2012, at more than 10% per year. Next year, he predicts similar growth, bringing the overall U.S. travel insurance market to nearly $3.5 billion.

“The travel insurance industry is entering a period of high growth set by a confluence of factors, which together shift the way travelers view the need to protect their trip investments, driving many first-time travel insurance buyers into the market,” said Sandberg.

Unfortunately, he predicts that Mother Nature may keep wreaking havoc while the threat of terrorism will continue to impact travel.

“The reality of global travel today is different from the glamour of past generations—with issues like long security lines, airline breakdowns and computer glitches becoming the norm,” said Sandberg.

“On top of these inconveniences, today’s traveler also has to contend with major travel disruptions, such as severe weather and terrorist attacks that can disrupt a trip even before it starts. While impossible to predict, the trend lines suggest that 2018 will bring more of the same.”

In addition, he said that boomers, who are entering their retirement years, will continue to travel, leading to greater purchases of travel insurance. Millennials will travel in greater numbers as well.

“While Boomers may be more cautious about what could happen while on vacation, Millennials take calculated risks,” explains Sandberg. “They are quite thoughtful about trip-planning, especially around a budget, and they understand the importance of protecting the things they purchases, whether it's an iPhone with AppleCare or a month traveling in Thailand with trip protection.”

READ MORE: What Millennials Want From Cruise Companies

Andre Azer, VP Marketing of StudentUniverse said that between tightening budgets and Google Flights taking off, OTAs and metasearch companies need to get creative to compete.

“Companies of all sizes are spending less and selling less and having to employ creative strategies to push their brands forward with smaller budgets,” he said.

“Just having come off of the Phocuswright conference, we saw TripAdvisor lost $1 billion as its stock had the largest single-day drop ever. At the same time, Expedia and Priceline are spending less with Google and looking to get more traffic organically and Trivago and TripAdvisor have seen advertisers spending less with them and have slashed ad spend themselves.”

He also said that there was an interesting dichotomy in 2017 as more basic and more premium offerings both became available to student travelers on our site for the first time.

“Some travelers gravitated to the cost savings of booking basic economy fares, even despite the fact that no seat selection and change/cancellation are possible and these passengers don’t have access to the overhead bin,” said Sandberg.

“According to a survey we did in May, 64% of students book the cheapest fare they can find and would consider booking basic economy fares if they were the cheapest. In the first few months they’ve been offered on our site, 12-15% of our domestic bookings are now basic economy bookings.”

Given that U.S. fares are predicted to rise next year, Sandberg said that these continue to be adopted by domestic travelers who don’t mind the limitations, especially as more and more students become familiar with them.

“As of May, 19% of students we surveyed were aware of them,” said Sandberg.

At the same time, StudentUniverse started selling premium economy (with 25 partners), plus business class and first class tickets (with 65 partners) on their site for the first time.

“Searches for these tickets began as soon as they went live on our site,” said Sandberg.

“Students who value airline amenities (largely international students) are willing to pay for the comfort and service. Asia has dominated thus far, making up 51% of premium cabin searches (compared to 33% of overall site searches) and 46% of premium cabin bookings (from the US to Asia). As more students become aware of the inclusions of these tickets relative to the price difference, we expect more bookings to/from Asia to be premium economy in 2018.”

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Culinary travel continues to be popular, and Justin Anderson, former director of operations at Revival Food Hall in Chicago and current director of hospitality at Denver’s Zeppelin Station, predicts that the Tiki will earn additional respect next year:

The next evolution of Tiki will emerge in 2018 showcasing tropical influences from both the Caribbean and the Eastern islands. The next wave of culinary stars will introduce flavors and ingredients from specific regions and even hometowns. Think: Southern Indian cuisine from Tamil Nadu, Telangana, Kerala and Andhra Pradesh, as well as Levantine cuisine from Jordan, Lebanon and Turkey that offering menus formulated from generations of recipes specific to the region.

To pre-order Lisa Iannucci's book, On Location: The Film & TV Lover's Travel Guide, click here.