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Despite Potential Threats, Tour Operators Are Bullish on 2022

by Daniel McCarthy / December 10, 2021
Despite Potential Threats, Tour Operators Are Bullish on 2022

Terry Dale speaking this week. Photo: USTOA


Tour operators are bullish heading into 2022, according to the latest data from the United States Tour Operators Association (USTOA), released this week during the association's annual conference in San Diego.

According to Terry Dale, 86% of USTOA active members participated in the survey, which was fielded on Nov. 10. The results showed a number of majorly encouraging signs for the tour, and travel, industry. 

The first was that members are seeing more new bookings versus rebooking, an indicator of just how far consumer sentiment has moved since those early stages of the pandemic—59% of 2022 existing bookings were new bookings, with the rest (41%) rebooked or canceled 2020 or 2021 departure. 

In terms of booking windows, “It's really all over the place for a lot of the tour operators,” Scott Wisemen, the SVP and GM at Apple Leisure Group and new USTOA chairman said. 

“It’s really showing us this continued uncertainty surrounding COVID,” he added. 

According to the survey, a large majority of bookings are coming in within 12 months of departure, with the most coming between four and six months of departure. Less is coming in more than a year in advance. 

“It’s good news and bad news because it means more people want to book short term. In the previous years, we were seeing a farther out booking pattern and you felt if you missed the booking window you were in trouble,” Wisemen added. 

Most of those bookings were international (75% versus 25% in North America), a pattern that has shown a slight change since 2020 when North America represented 35% of bookings, a good sign for the return of international travel. 

Looking to the future, there is a strong sentiment that 2022 will be better—9 out of every 10 active members are either “highly confident” or “confident” that bookings will increase in 2022, with two-thirds expecting a big year with a 7% to 10% or higher boost from 2021. 

In total, half of all members expect to reach a full recovery of pre-pandemic levels by the end of 2023, with 20% expecting a recovery by the end of 2022 and another 20% expecting it by the end of 2024. 

“There is a relatively optimistic outlook from our members,” The Travel Corp.’s Madhvi Buch said. 

However, members aren’t blind to potential risks. The survey found that the pandemic and health crisis is still the top of mind for threats followed by global financial instability and recession risks. 

“They are not blind to some threats out there,” Elizabeth Crabill, the CEO of CIE Tours said. 

One of the big moves in perceived threats this year was the news cycle, which has actually moved up in the top five of responses for 2021 compared to eighth last year. 

“I think that most of our membership has learned that changes in customer behavior can very much be driven by the media cycles in what’s reported in the news,” Crabill said, adding that a perfect example was news that the European Union was putting the U.S. onto its red list, a headline that impacted business for so many tour operators. 

Where and how consumers want to travel to
Even with the pandemic rapidly changing so many things for the travel industry, the staple international destination for North American consumers remains the same.

The top international destinations, according to the survey, were Italy, France/Greece (tied 2nd),  and Ireland, a clean sweep for Europe for the third year in a row. 

"There were no real reprises here as far as where people are going,” Buch said. 

In terms of where people want to go domestically, the National Parks were the top choice, the same pattern that tour operators reported in 2020, followed by Alaska and Hawaii. 

For how consumers want to travel, most prefer small group tours, a trend that started surging prior to the pandemic. Classic group tours moved up to fourth from sixth place. 

What about the next decade?
Members expect the pandemic to fade over the next ten years and other issues to have a bigger impact on the travel industry including sustainable travel along with artificial intelligence and advanced travel technology. 

According to Holland America’s Charlie Ball, almost two-thirds said that sustainability is somewhat important and another quarter said it is important to their customer base. But it’s not all about the customer. Creating sustainable business practices can help to create a better business for employees, too. 

“Make yourself an employer of choice by leaning into these things,” he said. 

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