The travel and tour industry is on a remarkable trajectory and shows no signs of slowing down in 2025, according to a recent survey by the United States Tour Operators Association (USTOA). We sat down with the association’s President and CEO Terry Dale to learn more.
Your recent survey shows that the tour operator industry is thriving and there’s a lot of optimism for more of the same in 2025. Why is it such a great time to be in this industry? What do you see as the top drivers for this consistent growth?
USTOA tour operators projected reaching $24.4 billion in sales in 2024, representing 8.4 million individual travelers. That’s more than an 8% increase in sales from 2023. There were 3.8 million total travel packages sold in 2024; up 6.1% compared to the 3.6 million packages sold in 2023. And the outlook for 2025 is equally promising, with three-fourths of our tour operators anticipating significant sales growth of 7% to 10% or more.
The post-pandemic boom of pent-up demand does not appear to be letting up. All indicators from our members point to continued growth, making it an exciting time for the travel and tour industry. More people are prioritizing experiences over goods, there is increased awareness about responsible travel practices, and an increased desire for a deeper connection to places travelers are visiting. USTOA has long believed that travel is a force for good, and now more than ever our members are committed to protecting and preserving the future of travel and tourism.
According to your survey, custom packages have seen a surge in popularity over the last few years. What’s spurring that demand?
While escorted or guided tours are the biggest contributors to overall USTOA membership revenues, accounting for more than a third for 2023 (36%) and 2024 (37%), custom packages saw the most growth increasing from 3% in 2022 to 17% in 2023 and 16% in 2024. More travelers today are searching for bespoke itineraries tailored to their unique pursuits, interests and spending levels. Personalized travel is becoming increasingly important to our members’ guests, with a growing call for tailored, private or exclusive experiences. People are willing to spend more to get the exact trip itinerary and experiences that they want.
We’re at an interesting moment for international travel. On one hand, demand is high among U.S. travelers, but on the other hand we face challenges around geopolitical risks and political stability in some regions. How are your members adapting to help travelers continue to see the world?
As we begin 2025, the mood is undeniably optimistic. Even with such strong optimism, it would be remiss not to address the global risks that could impact the industry over the next three years. Our members showed the most concern about political turmoil affecting growth prospects in the years ahead:
- Geopolitical conflicts ranked highest, with 58% of respondents “very to extremely concerned”
- Political instability followed closely, with 56% of respondents “very to extremely concerned”
- Overcrowding ranked third, with 46% of survey respondents “very to extremely concerned”
And while we can’t underestimate the geopolitical landscape, we believe today’s travelers are much more resilient and more willing to adapt and shift to another destination rather than cancel a journey altogether. If things are unsettled in one destination, our members can take guests to alternate locations or modify itineraries appropriately. And despite the ever-changing turmoil in the world, travel demand remains robust. That speaks volumes about consumers’ confidence that when working with a tour operator or travel advisor, there is a high level of trust.