Optimism dominated the many discussions I had recently with travel advisors, tour operators and consortia executives, who all spoke with terrific hope and enthusiasm about their expectations for the tourism industry in 2024.
A great deal was said about year-over-year sales growth, continued strong demand and exciting new vacation products, but an underlying concern about wars, natural disasters and politics crept into each conversation. So, how can advisors prepare themselves for the next year? Read on to learn more about the seven trends that tourism experts expect will impact travel businesses in 2024.
Travel Trend 1: Global Strife and Domestic Politics Loom Large.
“2024 is an election year, which historically means numbers are down,” said Lindsey Epperly, founder and CEO of Jetset World Travel. “Election years typically skew more moderate in terms of what people are willing to spend on travel.”
Election years usually affect travel spending.
Credit: 2023 Rawpixelcom/stock.adobe.comAnd Erina Pindar, COO and managing partner at SmartFlyer, began our conversation discussing the “worldwide caution” travel advisory issued by the U.S. Department of State last month, which urged Americans to exercise increased caution while overseas.
More and more, what’s going on in the world is going to continue to affect the industry as a whole. Learning and being able to manage that is going to be a big part of our role as travel advisors.
“The earthquake in Morocco, the situation in Israel, the war in Ukraine — all of this is becoming very much a part of our everyday lives,” Pindar said. “More and more, what’s going on in the world is going to continue to affect the industry as a whole. Learning and being able to manage that is going to be a big part of our role as travel advisors. Part of our job becomes managing anxieties and expectations, and making sure our clients feel as safe as possible.”
Travel Trend 2: Vacation Demand Remains Robust.
Although the world’s difficulties were certainly on the minds of the tourism stakeholders I spoke with recently, they were all bullish about the North American traveler’s appetite for vacations next year.
David Kolner, executive vice president for Virtuoso, offered as evidence a comparison conducted by his team this fall, measuring how many vacations the consortium’s advisors had sold for one to two years out — as of October — in both 2023 and 2019.
What we’re seeing is future sales in total are up 98% compared to where we were in 2019 at this time.
“What we’re seeing is future sales in total are up 98% compared to where we were in 2019 at this time,” Kolner explained. “2024 and 2025 are already sold almost twice as much as we had on the books for Virtuoso’s network at the end of 2019, looking into 2020 and 2021 at that time.”
Jack Richards, president and CEO of Pleasant Holidays, said the tour operator expects substantial increases in business to a range of key international destinations next year.
“For us, Japan and Asia in general are already up triple digits for 2024 travel, versus the same time last year,” Richards said. “Australia and New Zealand are up high double digits year-over-year, and the two really dominant destinations for us are Europe and the Caribbean — they’re both already up double digits compared to the same time last year.”
And Pam Young, senior vice president of industry relations for Internova Travel Group, noted that while she believes revenge travel is still happening today — and will continue to be present in the 2024 marketplace — that trend is losing some momentum, and it is probably time for the industry to shift its understanding of the phenomenon.
“Really strong desire to get out and to explore continues to be there,” she explained. “Not being able to get out or connect with family during the pandemic proved why travel is so important. When you don’t have it for a long time, you realize how important it is, and I think today it’s really just become more of a mindset, where people are regularly saying, ‘We need to make sure we do this.’”
Travel Trend 3: Europe Will Stay Hot, Hot, Hot.
There’s been no indication that Europe’s extraordinary popularity as a 2023 vacation destination will wane at all next year, according to Jetset’s Epperly.
Demand for Europe is still leading travel’s recovery.
Credit: 2023 Spectral-Design/stock.adobe.com“I think every single travel advisor under the sun is probably a little exhausted from what is essentially overtourism in Italy at this point,” she said. “The demand has been so high for that destination that we’re seeing advisors having to educate their clients on alternatives when there’s nothing available, or [propose] secondary and tertiary markets in that destination if clients don’t want to be lost in the crowd.”
I think every single travel advisor under the sun is probably a little exhausted from what is essentially overtourism in Italy at this point.
European heavy hitters such as Greece, France and Spain are also likely to remain extremely busy next year, according to many tourism stakeholders. But Epperly pointed to one less-frequented gem advisors may want to consider for clients interested in historical appeal along with beautiful landscapes.
“Slovenia has been very, very hot on our advisors’ radars this year,” she said. “It certainly provides a less-traversed, less-crowded European vacation.”
Travel Trend 4: Chinese Travelers Will Impact Travel Supply.
Virtuoso’s Kolner noted, meanwhile, that Chinese travelers are also likely to have a big impact on pricing and supply to Europe and beyond in 2024. The Chinese outbound international traveler represents about 15% of all international departures, and the Chinese are just coming out of the pandemic and lockdown, Kolner says.
“So, the Chinese are now itching to get out — just like Americans were — and there will be a big rebound in Chinese outbound travel in 2024 and 2025,” he said. “That’s important for Americans to know, because that discount you’re hoping for is probably not coming because you’re part of the global travel economy now, and there are lots of other people who want to get to Italy besides just you.”
Chinese travelers are going through their “revenge travel” phase.
Credit: 2023 Lumos /stock.adobe.comTravel Trend 5: There’s No Significant Price Relief in Sight for Hotels or Air.
Hotel rates are likely to increase in most regions globally again in 2024, according to a report released Oct. 5 by American Express Global Business Travel (Amex GBT), which forecasts 2024 room prices in 80 major cities worldwide, based on an analysis of millions of hotel transactions and economic data from the International Monetary Fund.
Hotel prices are not expected to decrease.
Credit: 2023 ververidis/stock.adobe.comThat Amex GBT study is expecting room price increases in a variety of popular tourism destinations next year, including climbs of 11% in Paris, 12.6% in Chicago, 9% in London, 7.5% in Singapore and nearly 5% in Sydney.
“The cost of hotel rooms went up exorbitantly during COVID-19 and post-pandemic, and we still have not seen the peak,” said Doris Reiss, senior vice president of leisure operations for TravelStore. “I think they will still be going up, but I do not think they will rise as sharply next year as they have over the past year, year and a half.”
Reiss said that while the demand she’s seeing for travel next year remains strong, “it’s definitely not as crazy as it was when things opened back up,” and that change in momentum will impact hotel average daily rates (ADRs).
The cost of hotel rooms went up exorbitantly during COVID-19 and post-pandemic, and we still have not seen the peak.
Pleasant Holiday’s Richards agreed, saying that in places such as Hawaii, some hotels doubled their room prices post-pandemic.
“We saw $1,000 nightly rates for garden-view rooms on some of the islands,” Richards said. “We don’t think that’s sustainable, and we’re starting to see evidence of that beginning to come down, and it will continue to drift down. What we’re seeing, both domestically and internationally, is that prices are increasing very modestly so far in 2024 — about 3% to 4%.”
Richards believes that prices will continue to soften in the first quarter of 2024. But he is not as optimistic about a change in the cost of flights anytime soon.
We do not see airline pricing coming down, and for summer next year, I think they are going to go up.
“We do not see airline pricing coming down, and for summer next year, I think they are going to go up,” he said, pointing to increased labor costs for air carriers, along with higher jet fuel prices. “We do not know what impact the war in the Middle East is going to have on oil prices, but it is probably not going to bring them down.”
Travel Trend 6: Excitement Grows for Hotelier and Expedition Cruises.
SmartFlyer’s Pindar said that the 2022 entrance of hotelier The Ritz-Carlton into the cruise market — along with Four Seasons Hotels & Resorts’ plans to launch a new yacht product in 2025 — has sparked new interest among her clients.
Hotel-operated cruise brands are bringing in new cruisers.
Credit: 2024 The Ritz-Carlton Yacht Collection“People who were perhaps not your traditional cruisers are now coming to us and saying, ‘Hey, what is this Ritz-Carlton cruise about?’ or ‘What is this Four Seasons cruise? It looks interesting,’” Pindar said. “And one of the most exciting ones is Orient Express. It is going to be launching its [Silenseas] ship in 2026, and it’s absolutely stunning. I don’t think I have ever been more excited about cruises.”
Many tourism stakeholders are also seeing solid demand for smaller expedition and adventure cruise products next year, including Travelstore’s Reiss, who said her company is working with more clients who are “wanting to spend a little bit of extra money to have a special experience, rather than just the vanilla or the generic.”
“Hurtigruten, for example, has scientists onboard who actually conduct experiments as a research vessel when it is in certain destinations,” Reiss said. “And its passengers can take part in those research experiments as part of their travel. It makes everything a little more meaningful. Clients are getting to experience the destination in a whole new way, and they’re learning something as they’re going.”
Hurtigruten is one line that is offering guests the opportunity to conduct citizen science onboard a cruise.
Credit: 2023 Hurtigruten
Travel Trend 7: Sustainability Conversations Are Changing.
According to a Booking.com survey of more than 33,000 travelers in February this year — including respondents from countries such as the United States, Canada, the United Kingdom, Australia, France, Germany, Japan and China — 76% of those polled want to travel more sustainably over the next 12 months.
But yes, all things being equal, sustainability is starting to affect the decision-making process more so than ever.
SmartFlyer’s Pindar says that the discussions she is having about sustainability with her clients and the partners she works with in the tourism industry are changing significantly.
“The conversation of what sustainability means is becoming more understood in its real intention, as opposed to just talking about paper cups and washing sheets,” she said. “Every aspect of it is being considered, whether it’s food waste or preservation of culture, which I feel is incredibly important. That con-versation is becoming really relevant and more serious these days.”
Pindar also said that hoteliers, tour operators and cruise companies are frequently asking her: “Does sustainability matter? Do clients really care?”
She said her response a year or two ago was, “No, it doesn’t matter,” about how SmartFlyer’s clients book travel.
“Today, the answer is, ‘Well, the product still needs to be great,’” she said. “But yes, all things being equal, sustainability is starting to affect the decision-making process more so than ever.”
