Travel costs are rising but travelers are still not canceling their plans | Tech US News


Summer travel talk ain’t 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 a much-needed return of summer travel in 2022.

Travel conversations on Twitter dropped 75% from April to May, while discussions related to gas prices and travel – half of which were negative – rose 680% on the website from the winter months to spring , according to social media analytics firm Sprout Social. .

However, despite the potential problems ahead, the outlook for summer travel remains strong, industry experts said, with many travelers saying they are worried but undeterred by their upcoming plans.

Are travelers canceling plans?

No, said James Thornton, CEO of Intrepid Travel, a Melbourne-based travel company that focuses on small-group adventure vacations around the world.

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

“In recent months, global concerns about shortages, sanctions and higher costs have economists sounding the alarm bells,” Thornton said. “Despite rising costs, travel bookings have doubled.”

The release of pent-up demand in the travel industry is still ongoing, Mastercard says

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

“Think of it literally as a pressure cooker where you lift the lid and the steam comes out hot,” he told CNBC’s “Squawk Box Asia” in May. Inflation “does matter, but only after we get some of that pent-up demand released.”

A new survey indicates that Singaporeans, for example, are unwilling to sacrifice their summer travel plans in the face of rising costs. Despite 77% saying they are “extremely” or “very” worried about rising costs, nearly 40% more people plan to travel this summer than last year, according to a Tripadvisor travel index released in May.

Almost two out of three Singaporeans said they would be willing to spend less on dining out and clothes to finance their travel as well.

Conversely, resistance to travel may 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 Country Financial Security Index Report, nearly a quarter (23%) of Americans indicated plans to cancel or postpone travel plans in response to inflation.

Still, Americans are expected to travel in large numbers this summer. More than half (55%) say they are traveling 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 gearing their plans to accommodate price increases and additional costs, rather than canceling [travel] together,” said Eric Bamberger, senior vice president of hospitality at marketing technology firm Zeta Global.

Demand for “pampering” trips such as spas is on the rise, while interest in “educational” trips to museums and national parks is down more than 50%, according to a Zeta Global company representative.

Car rentals are declining, with rental rates falling fastest in the U.S. in places where gas prices are highest, such as California, Oregon and Washington, according to Zeta Global.

However, “hotels are on fire,” Bamberger said. “Some hotels in Las Vegas are at 95% occupancy, and this past Memorial Day was the best day on record, in terms of revenue, for many of the major hotel chains in the United States.”

“I will still travel”

Rising costs are taking a toll on travel spending this summer, with 74% of US consumers actively looking for ways to save on travel, according to Zeta Global. Almost one in four say they are looking for cheaper transport, hotels or holiday destinations, according to the company.

But Expedia CEO Peter Kern told CNBC that other travelers are prepared to spend more to travel.

We haven't seen an impact on travel spending from inflation, says Expedia Group CEO

“We all know there was a lot of accumulated savings and underspending during Covid on services and travel,” he said. “So far it seems to be showing that people are interested in spending, and if anything, spending more.”

When asked about reports that people are opting for cheaper holidays, he said: “So far we don’t have that … particularly at the middle and higher end of the market.”

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

“If anything, maybe travelers are a bit dismissive of what their ambition is – where they were going or where they were staying – but they’re still going to travel,” he said.

‘Gangbusters’ Summer

Marriott CEO Anthony Capuano said the company, which operates in nearly 140 countries according to its website, is now seeing strong demand from not only leisure travelers but also group and business travelers.

“We think the summer is going to be gangbusters,” he told CNBC on “Squawk on the Street” in May. “We feel really good this summer.”

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

According to Zeta Global, business travel is increasing faster among younger travelers than older travelers.

Goodlife studio | E+ | Getty Images

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

That was before the Biden Administration dropped pre-departure Covid testing requirements to enter the United States, a move expected to kick-start travel in and out of the United States.

“Eliminating the evidence requirement removes a source of stress for travelers that may have been holding them back,” said Expedia Group PR chief Melanie Fish. “We expect demand to only grow from here.


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