From May 2021 to May 2022, the Consumer Price Index for All Urban Consumers increased 8.6 percent, the largest 12-month increase since the period ending December 1981. According to Federal Reserve System Beige Book, employment levels have expanded but over-all conditions in the labor market remain tight. Wages and price levels have significantly increased. Retail sales and consumer and business services sector activity continue to expand, while the agriculture and resource sectors have strengthened a bit. Lending activity has changed minimally.
Tracking the financial well-being of domestic travelers continues to show mixed signals. Half of American travelers (49.5%) say high travel prices have kept them from traveling in the past month, jumping nearly 8 points in the last four weeks. However, 61.8% of travelers said leisure travel is still a “high” or “extremely high” budgetary item.
While leisure domestic travel continues to drive the recovery of the travel sector, the rebound of international arrivals into the U.S. is expected to steadily increase and reach 96% of 2019 levels by 2024. Dropping the pre-departure testing requirement for inbound travelers will result in an additional 5.4 million overseas arrivals and an added $9 billion in visitor spending.
A sample of 547 business travel professionals reported that more than 85% of U.S. companies are allowing some or more domestic business travel. More than 65% of U.S. companies also report traveling internationally for business. Bookings from corporate customers has increased by 84% between April and June 2022. Leading drivers for business travel are sales meetings with current or prospective customers and attending conferences/trade shows and industry events.
While it is no surprise that digital native travelers are dominant social and mobile users, they also make up a component of responsible travelers who are likely to spend more, seeking authentic experiences and deep stories over image and status. They have a heightened sense of climate change and global crises, and are most likely to financially support local communities during their travel experiences.
The latest global travel and tourism development index clearly documents the tipping point for unabated growth and competitiveness in the hospitality sector—which undermine the very assets that it is built and depends upon. Understanding post-pandemic shifts in our communities, documenting sustainability and resiliency actions are all important measures for attracting the more discerning traveler.
