According to a study by Deloitte, the travel industry in 2023 is still facing challenges, even though health concerns related to the pandemic have lessened. These challenges are affecting both consumer and corporate travel, and they are due to various trends and events.
Leisure travel is down
Despite an increase in business following the vaccine rollout, Deloitte’s Consumer Tracker found that people’s intent to book travel has decreased across all travel segments This trend is particularly apparent in leisure travel, which is not as popular as it used to be. It is unclear why this is happening, but financial concerns and avoidance of peak travel dates could be possible reasons.
Last year, the economy caused a reduction in holiday travel, which was primarily due to financial uncertainty. In addition, notorious travel delays were a contributing factor in dissuading one out of five travelers from taking their trips due to flight disruptions. This trend is concerning as it could indicate future issues with travel.
“After growing steadily for more than a year, travel intent has slowed, indicating softening demand from a wallet-conscious consumer,” said Eileen Crowley, vice-chair and US Transportation, Hospitality & Services attest leader, Deloitte.
Consumers expect more
The travel industry is facing challenges in various aspects. A survey by the American Hotel & Lodging Association in September 2022 revealed that 87% of hoteliers experienced staff shortages. Travelers are increasingly seeking transparency, particularly in terms of sustainability. This is becoming a prominent concern for travelers, with 68% of consumers regarding climate change as an emergency. Additionally, 62% of corporate travel managers predict that their companies’ eco-friendly initiatives will result in a reduction in travel of over 25% by 2025.
Over the past two years, there has been a growing desire for international travel. However, the cost of travel has also increased during this time. Despite this, airlines should anticipate an increase in international travel during the upcoming summer season. It’s important to note that consumers’ travel budgets have decreased since 2021, with one in seven travelers currently saving up for an overseas trip. Furthermore, 35% of these travelers prioritize cost over convenience when making travel decisions.
Positive signs for corporate travel
In 2023, corporate travel is predicted to outperform leisure travel in terms of growth. While cost remains a significant determining factor, there are expected gains in the industry. Among business travelers, conferences, exhibitions, and trade shows remain the top reason for travel. However, high prices and delays continue to be challenges for corporations. In a recent survey, 85% of travel managers reported that high airfares impact their organizations’ desire to travel, with 27% stating the impact as “significant.”
Corporate travelers continue to place significant importance on client acquisition and relationship building. Despite advances in technology, the desire for meaningful interpersonal business connections remains unchanged. Marquee events, particularly those held in person, are expected to have a successful year and remain an integral part of the corporate travel experience.
As remote work becomes increasingly common, around half of employed Americans now have the ability to work from home or on-the-go. This shift is leading to a new trend in travel: “laptop luggers” who extend their vacations while still remaining connected to work. It’s an exciting development for the leisure travel market.
“With the rise of work-from-home culture, travelers are no longer tied to a rigid holiday schedule or inflexible PTO,” Crowley explained. “Laptop Luggers’ have increased flexibility and are choosing to add trips to their calendar or extend their travel plans. The trend is likely to continue and grow as consumer habits solidify. There’s an opportunity for travel suppliers to market to this key group.”