The consumer dilemma Save or spend?

Despite airline chaos, many British families were desperate to get away this year, and they weren’t alone.

As travel insurance company AllClear points out, worries around canceled flights, long queues, and steep prices often lost out to the fear of missing yet another summer.

Not everyone made it abroad, but ongoing demand for travel amid all this is a sign of consumers’ resilience.

Sadly, experts don’t expect the situation to improve anytime soon. CEO of Heathrow Airport, John Holland-Kaye, has warned that disruption could last another 18 months, which will really test people’s resolve.

But how strong is it in the first place?

In this blog, we’re going to look at how enthusiasm for travel has changed over the last two-plus years, how sticky it’s likely to be, and how travel providers can cater to vacationers as the disorder continues. 

Travel’s rebound has been steady

2020 was the worst year on record for tourism. People weren’t sure of their finances, vaccines weren’t widely available, and different countries had different restrictions – which meant the idea of traveling was often quite intimidating.   

As a result, the number of people buying vacations or travel tickets fell by 14 percentage points between Q1 2020-Q1 2021. We’ve excluded China from our analysis because Beijing’s zero-Covid policy clouds the sector’s long-term outlook and affects our global figures.

Chart showing percentage who have purchased a travel ticket in the last 3-6 months

As 2021 drew to a close, the main headline was this: tourism saw an upturn compared to 2020, but stayed well below pre-pandemic levels. On the whole, the pace of recovery was slow and uneven because restrictions and vaccination rates continued to vary around the world. 

And 2022 has followed the same pattern. 

The industry’s making gradual progress, though 2019’s figures are still a way off. 

This is especially true among Gen X and baby boomers, who have relatively more ground to make up. Pre-pandemic, Gen Z were the least likely to make bi-annual travel purchases; now, they’re our second-most active group of travel buyers behind millennials. 

So, while we have a good indication of where the sector’s headed, demographic differences and current events make the future harder to predict. 

A wave of new challenges has ultimately surfaced in the past few months, and the questions we now have to ask are, is this trend likely to continue across 2022-23? Or will lingering travel disruption, rising inflation, and the shadow of the Ukraine conflict be enough to put them off? 

Basically, will the next 18 months be remembered as a time of revenge travel or travel chaos?

Travelers are keen to get away, no matter what

Our data across 2022 suggests that consumers are keen to keep traveling for as long as they can afford to; they’d sooner sacrifice other activities than give up their vacations.

In March, we asked people what they’d be willing to spend less on in the future. 27% said holidays, which are more likely to remain on people’s budgets than alcohol (32%), socializing (40%), and treats/luxuries (41%). Among Gen Z, vacations even scored below home entertainment, beauty/personal care, and clothing. 

If they had to choose between the two, most would rather have one big blow-out than multiple days or nights out.

Our more recent July research backed this up. When asked what would bring them joy in the future, 55% said traveling. This ranked behind only spending time with family (57%), and ahead of spending time with friends (47%), dining out (42%), and hobbies (39%). 

Holidays are clearly low down on the list of things to cut, with pent-up demand for travel stretching quite far. For many, it’ll take a lot more than delayed flights or traffic queues to convince them to spend another vacation at home. 

People are finding ways around the chaos

While vacationers are desperate to make up for lost time, the majority accept that things may change last-minute. 37% of those planning to fly this year say they’re very likely to adjust their travel plans, with 40% saying there’s a fair chance they will.

Chart showing the ways in which people are adjusting their travel plans

Again, canceling is a last resort. More are staying closer to home, changing their tickets to be flexible, or opting for different travel methods.

This means that domestic trips are very much on the cards, especially in countries with vast or diverse landscapes like China, India, and Japan where travel adjusters are most likely to be changing their specific plans. 

This is good news for local companies offering experiences, with a quarter of domestic vacationers in these countries having bought one in the last 6 months. Peek, an online marketplace selling tours, raised $80 million in 2021 – which shows the potential of discovery and booking platforms. 

Especially among regular international travelers, swapping one long-haul trip for a holiday in a neighboring country or occasionally being a tourist in their own one seems like a good compromise when faced with higher costs and airline chaos. 

Travel providers can benefit from this shift by fostering a sense of belonging and pride in a particular region or country. In its ‘Escape the Everyday’ campaign, for example, VisitEngland put the spotlight on the destinations and attractions on offer across England’s cities to inspire short breaks.

Closer vacations also help explain changes in people’s transport methods, with the Eurostar under pressure to ease the burden on planes. There are even reports of sleeper trains resurfacing, which makes sense, given 70% in four European markets are planning to take a vacation in Europe this year – miles ahead of other continents (34%). 

It’s usually experience over price

Globally, value for money has the most impact on where we travel. Though, value isn’t the same as price, it’s about getting your money’s worth – which is why deals and offers aren’t nearly as influential to consumers as having a relaxing, cultural, or memorable trip. 

The Covid crisis inspired many of us to step outside our comfort zones and make the most of life, even with a recession looming. And as more prioritize their wellbeing and seek to maximize their time, these are qualities that travel brands need to emphasize.  

Chart showing the influences on travel destinations

It’s worth pointing out that different holidaymakers value certain qualities more than others. 

Europeans lining up a beach break care more about the weather, relaxing, and special offers; safari and cruise planners stand out for craving once-in-a lifetime experiences, while city-goers/sightseers want to be immersed in the culture. 

In many of these cases, added extras create the sense of a good deal. The number of Europeans who say facilities like gyms and pools are important to them when booking travel accommodation has climbed by 7% since 2021; and niche cruise packages with wildlife tours can have the same effect, in catering to this particular group of vacationers.

Adventure-seekers might be a minority, with large numbers choosing to stay closer to home, but they’re a growing audience. In Europe, there’s been a 23% rise in people planning to vacation in the Middle East and Africa since last year – a pattern Expedia links to today’s GOAT (Greatest of All Trips) mindset. 

While extra amenities like hotel shuttles or steam rooms will probably resonate well with sunbathers, we expect brands showcasing exciting ‘bucket list’ trips to land better with these so-called ‘GOAT travelers’. 

Familiar adventures are attractive 

Another thing that creates a sense of good value for money is trust, as evidenced by our fastest-growing purchase influencers. 

Recommendations from travel agents top our list. Though online reviews from other travelers are still more influential overall, this increase suggests that more people are doing their research and seeking out expert opinions. 

Especially if holidaymakers can’t afford to take long-haul vacations as often as they used to, they’ll want to make sure they’re getting the best package.  

Chart showing what has the most impact on where people travel

Many consumers are keen for more familiarity amid all this uncertainty, which is why seeing or hearing an ad, being in touch with a destination, and noticing it on TV have all climbed in importance.

During lockdowns, we spent more time watching TV, a move that helped screen tourism take off. Since then, reports of rising demand for TV-themes itineraries have sprung up – that’s hotels offering Bridgerton-inspired teas or National Parks allowing travelers to cosplay as characters from hit dramas. 

These experiences are popular because they’re immersive, yet predictable. And if this is an effect travel providers can create, they should. 

They can also lean on influencers to tell their story and drive familiarity, given that over a quarter of vacationers use social media to find inspiration for things like places to visit. 

While Airbnb struggled at the beginning of the pandemic, its social media strategy gave wind to its recovery. Not only does it spotlight unique locations and insights into why they’re special, it works with hosts who share windows into their areas or homes, putting followers at ease. 

Where did you go this summer?

In short, many of us believe our holidays have major cultural and mental benefits, and that’s not something we’re willing to give up. But we’re making adjustments to both our plans and expectations. 

Whether they do it through an ad, a TV reference, or influencer profile, brands will need to convince people they’re offering a trip worth taking, giving consumers yet another reason to keep traveling despite the chaos.

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