There has been much debate about the possibility of a global recession as US interest rates continue to rise and inflation has far-reaching effects.
Some of the world’s major economic organizations say the economy is weakening. The Conference Board, a global non-profit think tank, recently said that while the US and Europe in particular could experience a short-term recession, China could experience “significantly weaker growth in 2023.” I predicted.
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The question is, what effect will the recession have on the travel industry? What about the hotel industry, airlines, travel agencies and destinations? Not to mention travelers themselves and their plans.
The answers to these questions depend on who you talk to. But the good news overall is that the industry so far looks poised to weather the uncertain months ahead.
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Economy aside, travel remains a priority
After years of being unable to explore the world and being stuck at home most of the time, consumers around the world are giving up their ability to travel at this time, even amid economic uncertainty. I do not wish to
Intrepid Travel CEO James Thornton told TravelPulse: “Having a period without travel has made people appreciate vacations even more.”
The latest US Travel Sentiment Survey underscores Thornton’s claims. According to his November 2022 data from the survey, 92% of his Americans are planning a trip in the next six months, tying with the highest level of travel since the pandemic began. .
Travel advisors across the country say they’re seeing people reluctant to abandon vacation plans, no matter what the economy does.
Jennifer Donsetz, President of Pennsylvania-based VIP Vacations Inc. and certified travel industry executives. “While this may mean consumers take shorter vacations or look for other ways to save on vacation, people still want to travel and will travel despite the recession. think.”
Choice of value destinations, short stays and off-season travel
Cruising around the world may certainly remain a top priority, but even in a cooling economy, consumers may be hedging their bets with a little tweak to their plans.
A recent survey conducted by Seven Corners Travel Insurance found that most travelers (57%) would rather change their vacation plans than cancel them. The most common ways to change plans are staying with family or friends instead of renting or booking a hotel (36%) and choosing cheaper transportation (31%) , using microcations instead of long trips (25%). ).
Revised travel plans could also include choosing destinations known to be more budget-friendly, experts say.
Intrepid’s Thornton continues: “In Europe, for example, the dollar is particularly strong at the moment, making it a great opportunity for Americans to travel to Europe.”
Other historically budget-friendly destinations, such as Mexico and South America, may also see increased traffic and popularity.
Trivago CEO Axel Hefer told TravelPulse that consumers are likely to make some tangible adjustments to address their financial concerns.
“With an economic downturn looming, consumers are likely to adapt travel in three ways: shortening travel lengths, choosing cheaper destinations, and increasing use of price comparison platforms,” Hefer said. said Mr. “We have seen these shifts in consumer behavior as Western Europe is expected to be hit harder by the recession than the US.”
A global recession may also mean a greater propensity to travel when costs are historically low. You might see people traveling short distances instead, but they’ll still be on vacation,” Thornton said.
Where industry impact is most noticeable
One thing’s for certain: Few travelers get excited about skyrocketing airline prices. As Doncsecz pointed out, ticket prices are rising above inflation. And that means consumers have the biggest service complaints against airlines, she says.
As a result, she predicts, “more consumers will cruise from nearby ports or drive if they can’t afford to fly.”
Indeed, cruise lines that sometimes struggle to fill their cabins may take advantage of this economic moment to shine.
“If they can keep the pricing fair, [cruise operators] Flights are very expensive and our home ports offer great options, so we have the most benefits,” continued Doncsecz.
Tour operators could also benefit in the changing economic climate. “This is where they can shine, as costs are high and service expectations have never been higher,” he explained Doncsecz. “Tour operators provide great service and can be your liaison to intervene if there are issues. think.”
For destinations, on the other hand, emphasizing the experience is key to attracting visitors, despite the expense.
Thinking outside the box is key for travelers and travel brands
The bottom line is that people want to travel, at least for now. Despite inflationary pressure, enthusiasm remains strong. Still, industry insiders are closely monitoring developments such as inflation, a possible recession and higher energy prices, all of which could delay his travel recovery in the first half of 2023.
And many of these same industry leaders are already using some creative tactics to keep the momentum going.
“Companies like ours are trying to spread the idea that it is possible to travel past peak and busy periods, and they are trying to spread tourism revenues to the rest of the world. Instead of focusing on it, we’re focusing on the top 10 alternative destinations,” Thornton said. “If you can afford it, don’t cancel your trips in 2023. The recession could drive down fares and bring much-needed income to small business owners in your communities.”
