The consumer trends that are shaping travel & tourism

When society changes …

“When society changes, tourism changes.” These were the words of Prof. Dr. Harald Pechlaner in a round-table discussion at 2023’s ITB tradeshow in Berlin.

No industry is affected by change in social practice and consumer attitudes more than that of tourism. We live in a fast-paced world, where innovation and change have become the norm, driven by social upheaval and technical innovation. A particular catalyst was the Covid-19 pandemic that brought the entire travel and tourism industry to a halt, challenging many previously held assumptions. The resulting social changes will be reflected, in the coming years, in the way people travel, interact on their journeys and enjoy their leisure – and, therefore, in the products and services offered by the travel and tourism industries.

Some long-established aspirations have been questioned by the industry, such as the inevitability and the desirability of growth or the role of domestic tourism in a destination’s mix. Other trends have emerged unexpectedly or been accelerated. It is widely agreed that there has been a fundamental shift in the way travellers will approach their leisure and business journeys in the coming years. Numerous articles and trend studies/surveys have been published since 2021, each claiming to describe the nature of these trends and identify those that are here to stay.

The trends most commonly identified

This article provides an overview of this literature, to highlight the trends that most ‘experts’ agree to be of lasting importance. In summary, these are:

• The craving for experience
• The emergence of new modes of travel
• The importance of sustainability
• The emphasis on value (for money)
• The phenomenon of blended travel
• The effects of digital technology
• The increasing importance that consumers give to health and well-being
• Changes in booking habits.

Methodology

This article is based on the study and analysis of a number of published consumer trend studies and surveys. It was enriched by information obtained during conferences attended during the 2023 ITB trade show in Berlin.

The most frequently mentioned consumer trends have been collected and consolidated in an Excel table including their most important characteristics. An overview of the trends surveys and sources used can be found in the summary table below.

This article does not cover the content of these reports exhaustively, but highlights some of the most important trends, in particular those driven by changes in social attitudes and behaviour.

The desire to travel & the craving for experience

For the consumer, travel appears more important than ever. According to the Traveller Value Index 2023 published by the Expedia Group, 46% of people say that travel is more important to them now than it was pre-pandemic. They also value travel more than they did pre-Covid19.

With this general craving for travel comes not only a desire for extraordinary, once-in-a-lifetime experiences, but also for travel to be more meaningful. Following the confinements and travel restrictions of the pandemic, it may be that people no longer want to take the risk of being prevented from traveling to their bucket list destinations.

This craving for experience can also be observed when looking at the rise of new forms of tourism and the newly gained popularity of different destinations. According to Skyscanner’s Travel Trends Report 2023, wildlife spotting and hiking are in the top three tourism activities planned for holidays this year. Euromonitor further highlights that nature-based activities like adventure or eco-tourism are expected to account for 57% of all tour packages worldwide in 2023.

The paradox of sustainability

This growing popularity of outdoor activities and nature-based holidays can also be attributed to the high importance given to sustainability.

While sustainability has been a priority for the travel and tourism sector for some time now, it became even more prominent over the period of the pandemic. Consumers pay even closer attention to their impact on the environment and seek more sustainable options in how they live and travel. According to Expedia’s Traveller Value Index 2023, 90% of consumers are looking for sustainable travel options and most consumers state that they would pay more for inclusive travel options. The WTTC quantified the number of travellers apparently ready to offset their carbon footprint with 69% in its Consumer Trends Report 2023 – whether or not this is actually reflected in their purchases.

Different studies, including Skift’s State of Travel 2022 report, highlight that in this respect a say-do gap can be observed; and that while travellers are interested in being offered sustainable travel options and say that they are willing to pay extra, only a few end up spending the extra money. Willingness to pay extra for off-setting may be further threatened by the current increases in cost-of-living and high inflation.

A question of value

The duration of the current cost-of-living crisis and current high levels of inflation is yet to be determined, but their effects on tourism are undeniable. Skyscanner, the Expedia Group, and the WTTC, to mention a few, have highlighted price as a main priority for travellers in 2023. According to Expedia’s Traveller Value Index 2023, one consumer in two says that inflation will impact their travel plans in the coming year.

However, this increased price sensitivity doesn’t necessarily mean that travellers now look for the cheapest options; rather that they want their money’s worth when travelling, making value-for-money a key term for the travel and tourism industry. Even though consumers still prefer saving money in other areas of life, instead of reducing their travel, more than half indicated that inflation would impact the nature of their trips. These changes led to an increase in off-season trips and less visited, lower cost destinations becoming more popular.

The rise of blended travel

According to Expedia’s Traveler Insights Report for the first quarter of 2023, the flight data shows that tourists are now taking longer trips on average.This is often attributed to the rise of blended travel. The combination of business and leisure travel is on the rise, and many surveys claim that it is here to stay. With the newly gained flexibility to work remotely following the pandemic, more and more people take the opportunity to work from anywhere, thus creating new opportunities for tourists and destinations alike.

One of the benefits mentioned is that blended trips can, to some extent, mitigate the effect of inflation and high cost-of-living, as employers may meet some or all the costs of travel and accommodation. According to Skyscanner one in six tourists are likely to take blended trips in 2023. Euromonitor forecasts the global spend from blended trips to double between 2021 and 2027, further highlighting the potential of this trend.

Digitalization, flexibility, and well-being

Several smaller trends and changes further shape the travel and tourism landscape. Digitalisation continues to impact tourism and new technologies are used to enhance the travel experience at all steps of the customer journey. VR/AR/MR, AI, and the Metaverse are among the most prominently mentioned innovations in this regard. Especially at the beginning of the customer journey, technology, social media, and OTAs play an important role. According to a Skyscanner survey, half of the respondents have made travel plans inspired by what they have seen on social media. And whilst the booking window itself remains short, consumers are spending more time planning and researching their trips   than they did before the pandemic.

The pandemic also led to an increased customer need for flexibility when booking holidays and trips. Cancellation policies became more flexible, with possibilities for refunds. Expedia’s Traveller Value Index suggests that this trend, in terms of both demand and supply, is here to stay.

Another trend that emerged during the pandemic is the increasing importance of wellness, mental health, and well-being. Expedia’s Traveller Value Index 2023 puts physical and/ or mental health benefits among the top reasons for people to take holidays. Holistic well-being destinations and offers like yoga retreats and destinations spas are high on the bucket lists of travellers, according to Euromonitor.

What will the future hold?

The future is likely to bring even more change to the travel and tourism industry. Skyscanner mentions some further long-term trends that may further disrupt the industry. Among these are holidays among the stars, where 1 in 4 respondents expect to holiday regularly in the future, and virtual travel, which 26% of respondents see as a possible mainstream form of holidaying.

Despite all these trends and changes, certain things remain the same. For example, traditional holidays like sunbathing or boating trips and city breaks remain popular. Also, luxury travel is seen as remaining a strong long-term trend.

 

References

• Euromonitor International (January 2023): Top 10 global consumer trends 2023
• Expedia Group (2022): Destination Marketing Guide. Insights to inspire, connect and convert travelers
• Expedia Group (November 2022): 2023 Traveller Value Index. The gap between traveller expectations and industry perceptions
• Expedia Group (February 2023): Traveler Insight Report. 2023 | Q1
• Tiqets (May 2022): Must-Know Travel Industry Trends for the 2022 high season
• Tourismuspresse (27. January 2023): Reiseabsichten 2023: Reisen als Grundbedürfnis? By Ulrike Reisner. Available at: https://www.tp-blog.at/markt-kommunikation/reiseabsichten-2023-reisen-als-grundbeduerfnis
• Skift Research (October 2022): State of travel 2022
• Rashaad, Jorden; published by Skift (06.04.2023): Sustainable Travel Collides with Inflation Concerns. Available at: https://skift.com/2023/04/06/travelers-desire-for-greener-trips-collides-with-inflation-concerns/
• Skyscanner (November 2022): The year of price-driven decisions. Travel Trends 2023
• Visit Britain (December 2022): Midas: A global report. Motivations, Influences, Decisions and Sustainability in a Post-Pandemic Era
• World Travel & Tourism Council (November 2021): Trending in travel. Emerging consumer trends in Travel & Tourism in 2021 and beyond
• World Travel & Tourism Council (January 2023): A world in motion. Shifting consumer travel trends in 2022 and beyond

ITB 2023 conferences:

• Dutton, Stephen; Araújo, Luis; Ezinger, Julia-Sophie and Grafenstein, Frank (8. March 2023) on Blended Travel: Are we all getting remote?
• Rogg, Sabine; Bachrad, Bryan and Glaeßer, Dirk (7. March 2023) on Expectations and Forecasts from the Customers’ Perspectives for the Travel Industry of Tomorrow
• Bremner, Caroline; Knauer, Alexander and Summa, Leila (7. March 2023) on Future Technologies for Travel. What’s next?
• Quinby, Douglas; Dines, Sarah, Elzinga, Luuc and Pittman, Travis (8. March 2023) on How we have changed! The new Customer
• Pechlaner, Harald; Döll-König, Heike, Everett, Anthony and Gómez Punzón, Jonathan (9. March 2023) on Is destination thinking still state of the art?
• Quinby, Douglas; Gnock Fah, Eric and Reck, Johannes (7. March 2023) on New Experiences for Travel: How Tours Activities become a Game Changer for the Industry.