Talking about summer travel is definitely not what it used to be.
Instead of sun, sand and surf, many travel discussions now focus on inflation, rising fuel costs and flight cancellations, a situation that could derail the much-needed return of summer travel in 2022.
Travel conversations on Twitter fell 75% from April to May, while discussions about gas prices and travel — half negative — rose 680% on the site from the winter months through spring, according to social media analytics firm Sprout Social.
However, despite potential problems ahead, the outlook for summer travel remains strong, industry insiders said, with many travelers saying they are concerned but unwilling about their upcoming plans.
Do travelers cancel plans?
No, said James Thornton, CEO of Intrepid Travel, a Melbourne-based travel company focused on small group adventure vacations around the world.
He said the company has not seen higher cancellation rates this summer.
“In the past few months, global concerns about shortages, sanctions and rising costs have prompted economists to sound the alarm,” Thornton said. “Despite the higher costs, travel bookings doubled.”
Higher prices will not deter travelers this summer, especially in parts of the world that have recently reopened, such as the Asia Pacific region, said David Mann, chief economist at the Mastercard Institute of Economics.
“Literally think of it like a pressure cooker where you lift the lid and the steam comes out hot,” he told CNBC’s “Squawk Box Asia” in May. Inflation “is important, but that’s only after we have some of that released from pent-up demand.”
A new survey suggests that Singaporeans, for example, are not willing to sacrifice their summer travel plans in the face of rising costs. Although 77% said they were either “extremely” or “extremely” concerned about rising costs, nearly 40% of people are planning to travel this summer compared to last year, according to Tripadvisor’s Travel Index released in May.
Nearly two out of three Singaporeans said they would like to spend less on eating out and clothes to finance their travel as well.
Conversely, travel elasticity may be less robust in places where pent-up demand has dissipated some, such as Europe and North America.
According to a survey published in March in the State’s Financial Security Index Report, nearly a quarter (23%) of Americans have indicated plans to cancel or postpone travel plans in response to inflation.
However, Americans are expected to travel in droves this summer. More than half (55%) said they travel for the Fourth of July holiday, according to a survey by travel website The Vacationer — an 8% increase from last year’s survey, the company said.
Changes, not cancellations
“More people are focusing on their plans to absorb price hikes and additional costs, rather than canceling [travel] Eric Bamberger, senior vice president of hospitality at marketing technology company Zeta Global said.
Demand for “pampering” travel, such as spas, is on the rise, while interest in “educational” travel to museums and national parks has fallen by more than 50%, according to a representative of Zeta Global.
Car rents are on the decline, with rental rates dropping as fast as they can in the United States in places where gas prices are rising, such as California, Oregon and Washington, according to Zeta Global.
“Hotels are burning,” Bamberger said however. “Occupancy rates at some hotels in Las Vegas are as high as 95%, and this past Memorial Day was the best day ever recorded – in terms of revenue – for many of the top hotel chains in the US”
“I’m still traveling”
Higher costs are affecting travel expenses this summer, as 74% of American consumers are actively looking for ways to save on travel, according to Zeta Global. Nearly one in four say they are looking for cheaper transportation, hotels or vacation destinations, according to the company.
But Expedia CEO Peter Kern told CNBC that other travelers are willing to spend more to travel.
“We all know there is a lot of pent-up savings and underspending during Covid on services and travel,” he said. “So far it seems to be impressive, that people are interested in spending – and if anything, spending more.”
When asked about Reporting that people are choosing cheaper vacations, he said, “We haven’t done that yet…especially at the middle and upper end of the market.”
Kern said that if inflation began to affect travelers, he agreed that they would likely change their plans, but not eliminate them.
“If anything, travelers might give up a little bit about their ambition – where to go or what they’ve been staying at – but they’re still traveling,” he said.
summer “gangster”
Marriott CEO Anthony Capuano said the company, which operates in nearly 140 countries according to its website, is now seeing strong demand not only from leisure travelers, but also from group and business travelers.
“We think it’s going to be a gangster summer,” he said in an interview with CNBC’s “Squawk on the Street” in May. “We feel good about this summer.”
After two consecutive months of negative demand, interest in business travel in the United States increased 365% in May, according to Zeta Global, which tracks website usage as well as location and transaction data from credit card and loyalty program purchases.
Business travel is growing faster among younger, older travelers, according to Zeta Global.
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The company said interest in international travel from Americans also rose in May, with interest in going to Asia, Europe and South America up more than 200% from the previous month, according to the company.
That was before the Biden administration dropped pre-departure Covid testing requirements to enter the US, a move expected to begin travel to and from the US
“Removing the testing requirement eliminates a source of stress for travelers that may have been holding them back,” said Melanie Fish, head of global public relations at Expedia Group. “We expect demand to only grow from here.“