Travelers are upset about rising costs, but most aren’t canceling their plans yet

The talk of summer travel is certainly not what it used to be.

Rather than sun, sand and surf, many travel talks are now focusing on inflation, rising fuel costs and flight cancellations, a situation that could derail a much-needed return to world travel. summer 2022.

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

Still, despite the potential problems ahead, the outlook for summer travel remains strong, industry insiders said, with many travelers saying they are concerned but not discouraged by their upcoming plans.

Are travelers canceling their plans?

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

He said the company hasn’t seen higher cancellation rates this summer.

“Over the past few months, global concerns about shortages, sanctions and rising costs have prompted economists to sound the alarm,” Thornton said. “Despite rising costs, travel bookings have more than doubled.”

David Mann, chief economist at the Mastercard Economics Institute, said rising prices won’t stop travelers this summer, especially in parts of the world that have recently reopened, such as 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 “matters, but that’s only after we’ve had some of that release of pent-up demand.”

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

Almost two in three Singaporeans said they would also be willing to spend less on restaurants and clothes to finance their trip.

Conversely, travel resilience may be less robust in places where pent-up demand has dissipated some of it, 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 said they planned 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 July 4 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 and more people are changing their plans to accommodate price increases and additional costs, rather than canceling [travel] absolutely,” said Eric Bamberger, senior vice president of hospitality at marketing technology company Zeta Global.

According to a representative of the company Zeta Global, demand for “pampered” trips, such as spas, is increasing, while interest in “educational” trips to museums and national parks has fallen by more than 50%.

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

However, “hotels are on fire,” Bamberger said. “Some Las Vegas hotels are at 95% occupancy, and last Memorial Day was the best day on record – revenue-wise – for most of the largest hotel chains in the United States”

“I will travel again”

Rising costs are affecting travel spending this summer, with 74% of US consumers actively looking for ways to save on travel, according to Zeta Global. Nearly one in four say they are looking for cheaper transportation, hotels or vacation destinations, according to the company.

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

“We all know there’s been a lot of pent-up savings and underspending during Covid on services and travel,” he said. “So far, it seems to be confirmed, that people are interested in spending – and on the contrary, in spending more.”

When asked about signals that people are opting for cheaper holidays, he said: “We don’t have that so far…especially in the mid- to high-end segments of the market.”

Kern said if inflation started to affect travelers, he agreed they would likely alter, but not eliminate, their plans.

“If anything, travelers may be taking a bit of their ambition away – from where they were going or what they were staying in – but they’re still going to travel,” he said. .

The summer of the “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 groups and business travelers.

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

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

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

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

That was before the Biden administration dropped pre-departure Covid testing requirements to enter the United States, a move that is expected to revive travel to and from the United States.

“Removing the testing requirement removes a source of stress for travelers that may have held them back,” said Melanie Fish, head of global public relations for Expedia Group. “We expect demand to only increase from here.

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