The future of the travel industry in general and for travel advisors in particular is looking bright enough that anyone without a good pair of shades might want to invest in a pair. After six months of mostly continual growth, host agency and franchise executives expect more of the same for the rest of the year and into 2023. Even the few headwinds that may be ahead of the industry don’t have them worried.
These were just some of the talking points discussed when Travel Market Report spoke with five host agency and franchise executives for a six-month check in looking backwards at how the first half of the year went, as well as what’s expected for the next half of the year.
In this piece, we look at what’s ahead for the rest of the year.
On Pace with—or Outpacing – 2019
“We anticipate the end of ’22 for us to be a record year. We’re surpassing our 2019 numbers,” said Kathryn Mazza-Burney, president of NEST.
Dream Vacations franchise agencies are seeing the same thing, Debbie Fiorino, COO of World Travel Holdings, the parent company of Dream Vacations, told TMR. “For the first time since February of 2020, we’re starting to see the number of cruise departures surpass 2019, which was our best year ever… Then to land vacations, in 2021 the division had its best year ever in bookings and in 2022 we’re on pace to exceed those numbers by a significantly large margin.”
Michelle Fee, founder and CEO of Cruise Planners, echoed Mazza-Burney and Fiorino. “Looking at the second half of the year, our forecast remains positive… If you call our agents, the phones are ringing off the hook. They are so busy they can’t keep up with it.”
“We are very encouraged about this bull market that we’re going through right now continuing for quite a long period into the future,” Jeff Anderson, co-CEO of Certares, told TMR. “There’s way more rationale for why vacation is so important than there was pre-pandemic.”
Nexion is also anticipating that business will continue to grow for the second half of the year and into 2023, said Jackie Friedman, Nexion Travel Group president.
In fact, none of the executives TMR spoke to are expecting things to slow down in 2023.
When Might Demand Peak?
“We’re already looking at our ’23 futures and I think ’23 is going to be off the chart,” Fee said. “I think the problem in ’23 is going to be finding space.”
NEST’s Mazza-Burney said much the same. “We see our ’23 bookings are coming in extremely strong, in all segments of the business.”
When asked when the “revenge travel” and “pent-up demand” trend might peak, executives agreed it won’t be for a while.
“After ’09 when we were in recession, we saw some of our best years in ’10 and ’11 because people found that travel is something that is no longer just nice to have. It’s a part of their lives,” Fiorino said.
And while Anderson said the economy and COVID-19 could possibly impact the timing of the peak, he’s not overly worried.
“I think that the general trend is people want experiences more than things,” he said. “They spent on things over the last two years and now that they can actually get out, we see this trend continuing at least for another year or two. Nobody got younger in the last two years and nobody’s bucket list got shorter. The bucket stayed as big or bigger and now they have less time to do it.”
The only soft spot some of the executives we spoke to said they’re aware of – but not worried about – is in the contemporary cruise segment.
“Our contemporary cruises have softened a bit,” said NEST’s Mazza-Burney.
Certares’ Anderson agreed. “I think the contemporary lines do have a more challenging back half of the year.”
Executives pointed to COVID-19 related regulations as one of the main reasons for the softness in the segment.
“There’s a couple of barriers,” Fee said. “Number one you have to test to get onboard still and you need to be vaccinated… It’s a significant number that cannot cruise and contemporary takes a lot more people to fill a ship.”
Anderson echoed Fee. “There’s challenges there that the rest of the world is moving on from and so it is a little bit difficult for somebody to go back into an environment that they’re all now trying to escape from.”
But while Anderson told TMR he does agree “the contemporary part of cruising is softer than any other segment in cruising,” he added, “We don’t necessarily see it as weak.”
Fee also pointed out that summer is usually slow for bookings.
“This time of year, purchases typically slow down from those higher bookings months, but we’ve already set Q3 and Q4 up and people are traveling.”
Dream Vacations isn’t seeing a softening, Fiorino said. But advisors are seeing the booking window shorten. “There’s more room for growth but we’re not seeing it softening…. The number of cruises that we sell within 90 days, 120 days, our percentages are much higher right now than they’ve ever been.”
Friedman echoed Fiorino and Anderson, “It may be slightly soft, but I’m not concerned with what I’m seeing at this point,” she said.
Both Mazza-Burney and Friedman added that the cruise lines are doing their part, offering a variety of promotions, including air promotions intended to help with higher airfares in the market.
“The cruise lines have gotten extremely aggressive,” Mazza-Burney said. “Cruise lines have come out with amazing promotions and incentives to entice the consumer to travel.”
While the host agency and franchise executives TMR spoke with aren’t overly worried about the future, they did cite a few possible headwinds facing the industry.
“I think there’s a few things,” said Mazza-Burney. “The stock market’s not doing well right now. Look at what’s still going on over in Ukraine, which takes out a whole segment of Europe that people are not traveling to.”
“Airfares are rising,” added Friedman. “I think some of the last-minute travel to Europe, when the testing was lifted, may have been met with a little bit of sticker shock.”
"Gas prices are high and inflation is up, recession is looming depending on who you talk to," said Fiorino. But like the other executives, she's not too worried. "I still think we have pent up demand that's going to be coming through all this year for people who haven't traveled, plus the demand of people being stressed out and wanting to go away and enjoy their lives."
She added that historically, the travel industry has been resistant to economic difficulties. "The economy's always something that can be bumpy but based off history, travel is something people still spend money on. We don't see that as a huge headwind. It's bumpy but not a real headwind."
Anderson also cited the war in Ukraine and the economy, but said his biggest worry continues to be COVID-19.
“We still don’t know what’s going to happen with COVID. It’s an unknown. And unknown regulation challenges… what happens if a country shuts down again?... Something else might happen again, so we’ve got a little bit of padding that we put in [into their budget] to accommodate for another wave of COVID if that happens.”