Consumers are ready and eager to travel. 2023 is on track to set records for the number of passport requests, despite a hefty renewal backlog – and industry insights support those predictions with robust growth projections.
Data from the United States Tour Operators Association’s (USTOA) biennial Economic Impact Study, for example, found that looking ahead, member operators are confident about business in 2023: Eight out of 10 members anticipate optimistic to significant growth of 7% to more than 10% in both volume of sales and the volume of passengers. And Cruise Lines International Association's (CLIA) 2023 State of the Cruise Industry Report indicates cruise tourism is expected to reach 106% of 2019 levels this year with 31.5 million passengers sailing. What’s more, the industry is expected to grow by almost 20% by 2028.
No doubt, the outlook is rosier – but in different ways and for different reasons than in the past. For travel suppliers and others in the industry, there are new dynamics and trends at play that need to be examined and embraced for a successful year, especially as the busy summer travel season approaches.
- Demand is bumping up prices. Wave season has totally exceeded industry expectations this year, and that increase in demand is having a tangible impact on prices, too. Royal Caribbean, for example, said on a 2022 Q4 earnings call that it has experienced seven of the company's biggest booking weeks in its history since November, which in turn has enabled the group to raise prices across its portfolio of products without seeing a pullback from customers.
- The ‘set-effect’ is real. Data from Expedia’s 2023 Travel Trends Report indicates travelers are getting travel inspiration from TV shows and movies – and acting on it. Specifically, “two-thirds of global travelers have considered and 39% have booked trips to destinations after seeing them on streamed shows or movies.”
- Solo travel is trending. Tour operators have reported they are seeing an increase in bookings by solo travelers – especially younger travelers – for group trips. Tour operator Intrepid Travel, for example, reports that more than 50% of its group trips are now filled with solo travelers, a huge uptick.
The Aon Travel Takeaway
“The travel industry has experienced several tumultuous years, but the forecast for the industry for this year – and specifically for the upcoming busy summer months – is positive,” said Beth Godlin, president of Aon Affinity Travel Practice. “Savvy suppliers and industry players who take the time to study the consumer preference trends and bigger macro factors impacting summer travel will be poised for a successful season.”