Revenge travel is reaching its peak, yet the cost-of-living crisis is starting to impact leisure travelers’ behavior and spending. Perhaps more than any other sector, travel and tourism has been transformed by the pandemic. Yet it’s clear that the pandemic isn’t the only factor influencing the way we travel in 2022 and beyond. Our Travel Trends Study 2022 reveals all.
The pandemic forced consumers to act differently when it comes to booking a vacation, influencing where they choose to go, how soon or late they book, and how they get there. But with restrictions eased, travelers expect COVID to have less of an impact on their plans.
‘Revenge traveling’ continues to take hold as a result, with people budgeting to spend more on trips away. After two years of travel restrictions and lockdowns, many of us feel in need of a break. In fact, in the first half of 2022, European airports saw near to a 250 percent increase in passenger volumes. Suffice to say, staff shortages were not the only driver behind the queues, delays and cancellations many airlines suffered over the summer.
Development of leisure travel budget
With the easing of restrictions and impact of COVID, people are now booking more in advance than they did during the pandemic, but are still placing more value on flexible booking.
This shift is part of an understandable need for consumers to regain control, and be able to plan trips with confidence, as well as having something to look forward and avoid the nasty surprise of “sold-out” hotels and flights. But with so much COVID-inflicted red tape removed, why are a quarter of respondents not planning to go on holiday at all this summer?
One word: cost.
Financial hardship is the most common reason to avoid travel
The rising cost of living has caused most of us to review our spending habits. For many people, price is the first thing to be scrutinized when booking a vacation. Tellingly, one in three of those not going on holiday this year have based their choice on financial hardship.
More than ever before, the consumer’s willingness to pay is directly tied to how much value they think they will receive – in the traveler’s mind, it’s got to be ‘worth it’.
Bigger budgets, smarter travelers
While a vacation won’t be on the cards for many this year, 63 percent of our respondents see a trip as the special treat they’re looking forward to the most – that compares to 47 percent last year.
And, for many, some rising costs won’t come as a shock. People expect to pay 25 percent more for accommodation this summer compared to last year. This is higher in the UAE, where people expect to pay 40 percent more.
So, rather than simply pushing down rates of travel, the cost-of-living crisis has inspired consumers to book smartly – think discounts, promotions, and off-season trips.
People are spending strategically in other ways too:
- Fewer people are willing to pay a premium for higher quality service: Let’s start by looking at flying in a premium cabin or staying in a luxury hotel. This kind of spending is down to 42 percent in 2022 from 50 percent in 2021.
On the other hand, consumers are willing to pay extra for booking flexibility. In today’s environment, that higher level of reassurance means the world to consumers.
- People are booking further in advance: Last-minute bookings aren’t as appealing or relevant as they used to be during the pandemic, when people were more concerned about if they would be able to travel and ensure their money was safe.
As the travel industry picks up pace, consumers are planning ahead to book before the top-rated destinations sell out. Consumers don’t want to miss out on the best deals, which they feel are more likely to get if they book in advance.
Three additional travel trends for 2022
It’s clear that cost is a big focus this year and is central to most decisions made by holidaymakers. But what else has changed?
Business trips are recovering
The number of business trips is set to increase by around 36 percent in the next 12 months. The biggest increase (+66 percent) will be in the UK, and the lowest (+7 percent) in the Netherlands.
Cost is still a big deciding factor, even for business trips, with 33 percent of our respondents prioritizing price.
Conversely, ‘workations’, where people travel to work remotely, have dipped in popularity. This is likely due to many returning to the office and pre-COVID ways of working.
Travel goes green
Consumers – particularly young, wealthy, and those living in cities – are willing to spend more on sustainable holidays. In fact, 61 percent of respondents said they would pay more for an environmentally-sustainable holiday, showing no change from last year, in spite of higher prices.
It could be argued that green travel has become more than a trend and is now a consideration that is here to stay.
Things get personal
85 percent of respondents said they prefer to organize holidays themselves, and build custom trips tailored to their needs.
Travel agents are still in demand though, especially when it comes to the much-loved all-inclusive. 72 percent of those who book through a travel agent opt for an all-inclusive holiday. Because after such a draining few years, what could be better than a trip where everything is already taken care of?
Of course, booking through a travel agent also offers some much-needed certainty on price. Consumers want to know precisely what they’re paying for.
What this means for the travel industry
People are excited to travel again. But they’re watching their money closely and spending wisely.
Consumers are relying on clarity. They need to know exactly what they’re getting for their money, where they can cut costs, and why certain services or features come with an additional fee.
The best thing the travel and tourism industry can do is simplify their offer and give customers flexibility when booking. The more control consumers regain, the more confidence they’ll have when it comes to booking their next trip. At the same time, travel companies need to invest in making their offering greener, as the younger consumers put this high on their priority for travel.
Finally, offering good deals and value to incentivize early booking will be key. It will secure bookings and early revenue before the cost-of-living bites further on consumers’ wallets.
If you’d like to dive deeper into this year’s Travel Trends Study, get in touch.