Travel costs increase but travelers still haven’t canceled their plans

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 cancel the flighta situation that could derail the much-needed summer 2022 return travel.

Travel conversations on Twitter are down 75% from April to May, while discussions about gas prices and travel – half of which are negative – are up 680% on the site from the winter to spring months, according to social media analytics company Sprout Social. .

However, despite the potential problems ahead, industry insiders say the outlook for summer travel remains strong, with many travelers saying they are concerned but undeterred about their upcoming plans.

Do tourists cancel plans?

No, said James Thornton, CEO of Intrepid Travel, a Melbourne-based travel agency that focuses on small group adventure holidays around the globe.

He said the company has not seen higher cancellation rates this summer.

“Over the past few months, global concerns about shortages, sanctions and higher costs have alarmed economists,” said Thornton. “Despite the increase in costs, travel bookings have more than doubled.”

David Mann, chief economist at the Mastercard Institute of Economics, said higher prices won’t deter tourists this summer, especially in parts of the world that have reopened recently, such as: Asia Pacific.

“Think of it literally like a pressure cooker when you’re lifting the lid and the steam comes out hot” he told CNBC “Squawk Box Asia” in May. Inflation “doesn’t matter, but that’s only after we’ve released some pent-up demand.”

A new survey indicates that Singaporeans, for example, are not willing to sacrifice their summer travel plans in the face of rising costs. Although 77% said they were “extremely” or “very worried” about rising costs, nearly 40% more people plan to travel this summer than last season, according to the public Tripadvisor Travel Index. father in May.

Nearly two-thirds of Singaporeans said they are willing to spend less on eating out and shopping for clothes to cover their travel.

In contrast, tourism resilience could be less robust in places where pent-up demand has dissipated some, such as Europe and North America.

According to a March survey published in the National Financial Security Index Report, nearly a quarter (23%) of Americans said the plan to cancel or suspend travel plans in response to inflation.

However, Americans are expected to travel in large numbers this summer. More than half (55%) According to a survey by travel website The Vacationer, they will be traveling for the July 4 holiday – an 8% increase from last year’s survey, the company said.

Change, not cancel

“Many people are pivoting their plans to accommodate price increases and additional costs, rather than canceling [travel] said Eric Bamberger, senior vice president of hospitality at marketing technology company Zeta Global.

According to a Zeta Global company representative, demand for “relaxing” travel, such as spas, is increasing, while interest in “educational” tourism to museums and national parks is decreasing. more than 50%, according to a representative of the company Zeta Global.

Car rental prices are falling, with rents falling fastest in the United States in places where gas prices are highest, such as California, Oregon and Washington, according to Zeta Global.

Still, “the hotels are on fire,” Bamberger said. “Several Las Vegas hotels hit 95% occupancy, and Memorial Day last was the best day ever recorded – by revenue – for many of the top hotel chains in the US.”

‘Still going 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 people are interested in spending – and if so, spending more.”

When asked about reports that people are choosing cheaper vacations, he said: “So far, we haven’t done so … especially in the middle and upmarket.”

Kern said if inflation starts to affect tourists, he agrees they will likely change, but not eliminate, their plans.

“If anything, maybe tourists will be a little less ambitious – where they’re going or where they’re staying – but they’ll still travel,” he said.

Summer ‘Gangbusters’

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 leisure travellers. by groups and entrepreneurs.

“We think the summer is going to be about gangster attacks,” he told CNBC’s “Squawk on the Street” in May. “We feel great about this summer.”

After two consecutive months of negative demand, interest in business travel in the United States increased by 365 percent in May, according to Zeta Global, which tracks website usage as well as location and transaction data from credit card purchases and loyalty programs.

According to Zeta Global, the number of young tourists traveling for business is growing faster than the older ones.

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According to the company, interest in international travel from Americans also increased in May, with interest in Asia, Europe and South America increasing by more than 200% from the previous month.

That was before Biden Administration Dropped Pre-Departure Covid Test Requirement into the United States, a move that was supposed to kickstart travel into and out of the United States

“Removing the testing requirement will help remove the source of stress for travelers that may have held them back,” said Melanie Fish, head of global PR for Expedia Group. “We expect demand to only grow from here.

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