With many countries lifting COVID restrictions on travel earlier this year, travel and hospitality were supposed to see a strong recovery in 2022. And though pandemic concerns have waned, it has been replaced by economic uncertainty, which has slowed the fast pace of recovery and growth of the industry, revealed a recent study by Morning Consult.
Fears of an economic recession and inflation affected travel plans. From October 2021 to July 2022, the volume of American adults who were planning a trip because they had saved up money that they wanted to spend dipped 4 percentage points. The decline was significantly noticeable in the middle-income bracket, as their share fell 6 percentage points.
During the same period, inflation increased over 6% to 8.5%, which meant people had less money to save or dip into their savings to pay for necessities. The decline in travel among the middle-income bracket is expected to outsize as higher earners are on better financial footing in terms of savings and lower earners were less likely to have been planning this type of travel to begin with.
Intent to travel continued its upward trend from 2021 until July 2022. There was a sharp drop in Americans planning to travel domestically within the next year, suggesting that people took their “revenge trips” in early summer and were planning to slow down travel plans for the rest of the year. About 43% of Americans said they were traveling less this summer due to increased prices.
High earners and those who have traveled in the previous year were the two groups to report greater comfort levels. These groups weren’t mutually exclusive, those from high-earning households were more likely to travel frequently than their lower-income counterparts in a typical year and the same was true in the pandemic era.
FUTURE OF BUSINESS TRAVEL
Business travel will never return to the pre-pandemic normal. Although two of five U.S. business travelers won’t return to business travel. Europe showed the most notable shift, with Spain reporting a higher share of business travelers who say they will never travel for business. Situations in BRIC markets, however, were better, particularly in India, where half of the country’s business travelers said they were likely to go on a work trip in the next six months.
‘NEVER TRAVELING AGAIN’
Interestingly, Asia was reported to have the highest percentage of people who said they would never travel again. About 15% of South Korean and 14% of Chinese respondents said they would never travel again. This was echoed by 14% Americans and 11% of Mexicans. The reluctance to travel, however, was the highest in Japan, where 35% of respondents said they don’t plan to travel again.
With intent to travel ranking high in other countries, including in North Asia, Japan’s reluctance to travel remained much below. About 45% of Japanese respondents said they plan to travel in the next year, compared to 65% in China and 66% in South Korea. In contrast, 77% of Germans said they plan to travel in the next 12 months.