Uncertain US outbound travel outlook: how should the industry respond?
11.02.2024 - 03:10
/ breakingtravelnews.com
Throughout the summer of 2023 there were many reports that a surge of international travel bookings were coming from the US, in part helped by a continued strong dollar. Although that meant US domestic travel demand was waning, the industry was generally excited that 2023 international travel volume could finally catch up on that of 2019.
However, by later this year Reuters reported that international demand from the US may have softened due to economic uncertainty. But meanwhile US airlines were still reporting a continued demand for international travel.
So, who is right? As we 2024 gets underway, should we expect to see outbound US international travel continue to grow, or will it slow down? Should travel intermediaries and B2B sellers now prepare for alternative scenarios? We spoke with some industry experts to find out more.
A recent Traveler Sentiment survey by Arival indicated a drop in the number of trips US travellers are planning to take in 2024. But Douglas Quinby, Co-founder and CEO of Arival, doesn’t think this is anything to be concerned about. “US travelers are definitely back, and they want more out that travel – especially experiences. The drop in trip intent appears to reflect consumer sentiment today. There’s inflation, the cost of living, the economic outlook… and consumer debt is at an all-time high. Many US travelers are just being cautious. But the U.S. economy, employment and the dollar have remained resilient, the demand for international travel is there, and the trips people are taking are a lot more meaningful. They are booking longer periods away and are spending a lot more per trip. They’re also doing more on those trips.”
That could mean a change in strategy for hotels looking for US travellers, according to hotel revenue management expert BEONx: “The fact that US citizens and Europeans alike are taking fewer trips, but spending longer away and spending more money is an opportunity for the industry,” says Alex Barros, Chief Marketing & Innovation Officer. “Diversification could help hotels and airlines make up for revenue implications of people taking fewer flights, for example they could partner with hotels and activity providers to offer new packages and services with a focus on experiences to consumers sold during the booking process or even on the plane. We think that the breadth of ancillary services offered by airlines and hotels is likely to increase as more and more begin to think like retailers.”
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One important factor driving US international demand has been the strength of the dollar to other currencies, in particular the Euro. Janis Dzenis from US focused travel comparison website WayAway, who help travellers to find the best discounts,