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Arnie Weissman
Dave Hershberger, owner of Prestige Travel Leaders in Cincinnati, eliminates the factors that keep consumers from traveling: war. Inflation. Fear of economic collapse. Astronomically high prices (especially when combined with poor service levels). Several reports of airline meltdowns (or experiences).
What I think he misses are the headlines I’ve seen predicting a “winter of hell” for travelers.
“If you’re a trained economist, you’d think everything is a perfect fit.
But, he continued, “we’re seeing people come out of the woodwork to book a trip.” “We charge $50 to $250 just to quote someone, and people can’t pay fast enough. When I ask for a draft budget, we’re blown away by the numbers they come up with. There are people who fly business. There’s always been a class of people who fly coach who might take one trip a year, and this year they’re doing two.” It really doesn’t make sense.
This week, I was among 1,400 travel advisors at the Travel Leaders Network’s Edge conference in Nashville, where I tapped into what insights attendees might have about the growth of logic-logic travel.
Hershberger’s theory was echoed by others: “Covid has caused a shift in thinking. Everyone is thinking about what’s important. They realize they’ve lost a year or two or three and it can happen again very quickly. Life is short, and if I’m “always having dinner at the Eiffel Tower in Paris I had a dream, I will do it this year.
Is this the new normal? “I don’t think it will last,” he said. “I don’t expect a big recession, but it really can’t last. But we’ll get another good year out of it.”
Angela Hughes, a hostess, consultant and owner of a travel and cruise agency in Florida, said she is seeing a move to a longer sales cycle, similar to pre-Covid patterns. She sees tropical destinations such as Japan benefiting from a stronger dollar, but is also seeing a slowdown in safari sales, as prices may hit their midpoints.
“Africa rebuilt my business after covid, but prices went up 30%,” she said. “I’m also seeing a slowdown in the family market in Europe. It’s still fresh in the premium and luxury segment, but premium customers are starting to feel the pinch on air fares. I’m doing layover sales in Europe until the fall. And shifting to more affordable destinations like Thailand and Bali for late summer.”
Although some Americans are becoming more price conscious, high prices in Europe could continue well into 2024, Hughes believes.
“I spent 107 days in Europe last year, and the Chinese teams are starting to come back. Will that affect the price? Yes.”
Sarah Buruff, who owns two agencies in Minnesota and an independent contractor in Pennsylvania, says one group of clients she’s seen raise questions about economic headship are her parents. Most common, she says, are parents who listen to their children telling them, “Don’t sit on your money until you die, we’d rather enjoy it with you now than when we inherit the money.”
Her clients are taking bigger trips in shorter periods, she said, “even though airfares are crazy. And they’re taking the whole family.”
Interestingly, the activity seen by US consultants does not translate globally, even across Europe. According to the European Travel Commission’s (ETC) report on the continent’s first quarter activity, overall foreign tourists to Europe are 18 percent below 2019 levels. A third of destinations have exceeded pre-pandemic visits, with a quarter below 10%.
And where the biggest increases are happening, you may be surprised: Bulgaria has increased by 27%, due, ETC believes, to the perception that it offers great value. Serbia (over 32 percent) and Turkey (over 21 percent) posted the highest numbers, visited by Russian visitors seeking visa-free destinations.
So, given the laws of supply and demand, why do Americans go to destinations in the second tier of popularity? If Serbia and Bulgaria are seeing huge increases, why are flights to Italy, France and Germany so expensive?
John Lovell, president of Travel Leaders Group, points to an offer in a special class that boosts spending on vacations across the Atlantic.
He says we tend to forget a major event that occurred before the outbreak, which is still a major contributor: the collapse of Thomas Cook. The air capacity provided by Cook has not yet been replaced and is still affecting transatlantic traffic.
Indeed, ETC “Despite increasing demand, flight volumes continue to plateau, indicating that supply constraints are still recovering. European air traffic decreased by 14.4% in January 2023 compared to January 2019.”
What’s to come? More planes and pilots are on the way, and the second and third quarters may tell a very different story. But only the wise or the most foolish dare to make predictions when logic seems to have abandoned market principles.
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