What Travel Marketers Should Expect in 2023

25.08.2023 - 14:11 / skift.com / Varsha Arora / Skift Research

Skift CEO Rafat Ali and Skift Research senior analysts Varsha Arora and Pranavi Agarwal went live on LinkedIn to discuss the key findings and implications from the latest U.S. Travel Tracker survey conducted in January 2023. Skift Research has been conducting bi-monthly U.S. travel surveys since January 2020 amongst 1,000 U.S. consumers, to examine travel behavior, demands and expectations.

The session discussed how current economic uncertainty is impacting travel expectations for 2023, how travel players and destinations respond to changing travel behavior and what our expectations are for growth in the short-term rental industry. While addressing the questions from the audience, topics like luxury travel, business traveler sentiment, digital nomads, and outbound tourism from China were also discussed.

The discussion painted a bullish outlook for the travel industry in 2023. Although fears of a 2023 recession in the US remain high and personal saving rates have fallen, Skift Research believes that travel will remain resilient to most economic tremors.

For one, travel is inherently a luxury consumer spend item and is thus somewhat protected in a recession, and the pent-up demand of 2022 has shown that travel has become more important in peoples’ spending hierarchy. In addition, travel recovery in Asia is expected to boost global travel, and business travel seems more resilient than some feared. Blended travel and digital nomadism, important new faces of business travel, will continue to give a push to travel in 2023.

Today, prices of travel products are much higher than pre-pandemic levels, and given the uncertain economic environment, Skift Research findings show that there is growing demand for discounted offerings. 

Throughout the Covid recovery we have seen that hotel rates have not fallen as much as occupancy levels. With people simply unable to travel due to restrictions, any discount in hotel price did little to attract demand. This is different to the 2008-09 recession, where hotel rates fell more than occupancy as hoteliers reduced prices in order to encourage heads in beds. As independent hotels struggled, this allowed the online travel agents to come onto the field as dominant players by offering cheap, discounted rates. 

As we enter a potential 2023 recession in the US, we are seeing signs of weakening consumer spending and there is increased demand for discounted travel. However, unlike the 2008-09 recession, where hoteliers lost share and pricing power to the online travel agents, we are instead seeing that direct bookings are gaining back share of distribution. 

We are also seeing discounts being offered earlier in the booking window than before the pandemic, validating that the travel