As lockdowns from the global COVID-19 pandemic get further away in the rearview mirror, travelers show indications that some of their travel habits are reverting back to pre-pandemic life. While travelers plan on spending more on vacations in 2023, travelers are cognizant of higher travel prices but continue to prioritize travel in their budgets. In any case, vacations are a high priority in over half of travelers’ household budgets, indicating that despite high prices, these people are intent on engaging in travel beyond what may be considered “given travel”. Over half of travelers say travel is a “high” priority in their budgets; similar numbers recognize the need for increased spending and also seek out the lowest prices when possible.
Airlines are still doing incredibly well with high demand commanding higher airfare. In fact, we’ve seen that despite business travel still lagging in 2023, business-class seats are still selling out. Given this and the increasing popularity of “blended travel,” one big thing that I think we’ll see from airlines in the future is more effort to market these premium seats to leisure travelers. We know from our research on luxury travel that non-high-income travelers try to incorporate elements of luxury travel when they’re able, and premium seating appears to be a popular outlet.
2023 travelers want to explore new frontiers
There are indicators that travel is up for 2023 compared to 2022, despite some of the persistent headwinds. One of the most notable changes is that 2023 vacationers intend to move from domestic vacations toward more international vacations.
As far as destinations, patterns are normalizing to pre-pandemic behaviors, with beaches facing increasing pressure from city vacations and international destinations as COVID-19 and its restrictions fall further in the rearview. There is a definite impression that travelers don’t have travel out of their systems after the rebound in 2021-22, and want to get back out in the world despite economic headwinds.
Travelers are also more likely to visit a new destination in 2023, hinting that some of the “feeling of normalcy” that people wanted immediately after widespread vaccine availability has been achieved, and now it’s time for something new. This can also be seen in how new destinations compete with visits to family members. There is more intent for family to be a travel companion instead of a destination, hinting that family travel will be strong in 2023.
High costs don’t deter travel as a priority
While travelers plan on spending more on vacations in 2023, this may be more of a recognition that prices have increased and not necessarily that they intend to spend lavishly. Travelers indicate they’re seeking the lowest prices for travel options, there were indications in the past few years that cost was becoming less of a concern when making travel decisions.
In any case, vacations are a high priority in over half of travelers’ household budgets, people are intent on engaging in travel beyond what may be considered “given travel,” such as visiting family during the winter holidays. With this in mind, there is a definite impression that travelers don’t have travel out of their systems after the rebound in 2021-22, and want to get back out in the world despite economic uncertainty.
What we think
Provide value-adds: Though travelers know they will be paying more to travel this year, they’re still looking for deals. Even something small like free late check-out or a tour company and restaurant partnering for a package deal can tilt consumers in their favor.
Take the weight of planning out of travelers’ hands: Travelers are less inclined toward waiting until they’re at their destination to find something to do, so providing travel bookers with suggestions, even somewhat tailored, can be helpful. For instance, a hotel that sees a family making a reservation that includes a child in their traveling party can suggest family-friendly attractions.
Always appeal to the leisure traveler: As we head into the fall (the typical business travel season), bear in mind that business travelers are increasingly looking for leisure activities on their trips. With the persistence of remote work, these travelers may be inclined to stay longer than pre-pandemic leisure travelers.
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