Travel costs are rising, but travelers are not canceling their plans yet – Reuters

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

Instead of sun, sand and surf, many travel negotiations 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 fell by 75% from April to May, while discussions related to petrol prices and travel – half of which were negative – rose 680% on the website for several months, according to social media analysis firm Sprout Social.

Still, despite the potential problems ahead, the prospects for summer travel are still strong, industry insiders said, and many travelers say they are concerned but not deterred 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 adventure holidays for small groups around the world.

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

“Over the last few months, global concerns about shortages, sanctions and rising costs have caused 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 will not stop travelers this summer, especially in parts of the world that have recently reopened, such as the Asia-Pacific region.

“Think of it literally like a pressure cooker where you lift the lid and the steam comes out hot,” he told CNBC’s “Squawk Box Asia” in May. Inflation “counts, but it is only after we have had some of that release of pent-up demand.”

A new study indicates that Singaporeans, for example, are not willing to sacrifice summer travel plans in light 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. .

Nearly two in three Singaporeans said they would also be willing to spend less on restaurants and clothing to fund their trip.

Conversely, travel resilience may be less robust in places where accumulated demand has spread some of it, such as Europe and North America.

According to a March study 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 travel for the July 4th holiday, according to a survey by travel website The Vacationer – an 8% increase over last year’s survey, it said.

Changes, not cancellations

“More and more people are adjusting their plans to take into account price increases and extra costs instead of canceling [travel] absolutely, ”said Eric Bamberger, senior vice president of hospitality at marketing technology company Zeta Global.

According to a representative from Zeta Global, the 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 rental has fallen, and rental prices are falling fastest in the United States in places with the highest gas prices, such as California, Oregon and Washington, according to Zeta Global.

But “hotels are burning,” Bamberger said. “Some hotels in Las Vegas have 95% occupancy, and Last Memorial Day was the best day ever – in terms of revenue – for most of the largest hotel chains in the United States.”

“I travel again”

“We all know that there have been many pent-up savings and under-consumption under 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 signaling that people are choosing cheaper holidays, he said: “We have not had that so far … especially in the mid- and high-end segments of the market.”

Kern said that if inflation began to affect travelers, he agreed that they would likely change, but not eliminate, their plans.

“If anything, travelers may take some of their ambitions away – from where they were going or what they lived in – but they still want to travel,” he said.

The “Gangbusters” summer

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

“We think the summer is going to be bus busters,” he told CNBC’s “Squawk on the Street” in May. “We’re having a good time this summer.”

After two consecutive months of negative demand, interest in business travel in the US increased by 365% in May, according to Zeta Global, which tracks website usage as well as business travelers’ location and transaction data, 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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