THREE INDICATIONS THAT TRAVEL IS ‘COST OF LIVING’ PROOF
Could 2023 be the ‘unicorn moment’ destinations have been waiting for?
The cost of living crisis was recently referred to in conversation as the ‘COLC’, which feels like a strangely cutesy name for a fairly depressing state of affairs. When marketeers give something an acronym, you know it’s sticking around.
So amongst this general chaos, how is the world of travel and tourism doing? One might assume that for many, 2023’s bikini budget would now be assigned to stocking up on essential goods, ready to face a winter of discontent.
With the pandemic swiftly followed by airport delays that made Tom Hanks’ The Terminal feel relatable, ongoing staff shortages, and the economic nightmare (sorry, ‘fiscal drag’), set to continue, you might well assume travel would be facing yet another brutal blow.
An initial look, however, suggests that travel is not facing the hit you might expect, as consumers refuse to let another summer holiday pass them by. Three indications that Brits are defiant to travel, despite the COLC crisis impacting most households:
1. We’re going away for longer
Travel companies that market heavily from a price perspective such as lastminute.com, are actually seeing travellers stay away for longer, and spend more on average compared to 2019. With that in mind, nearly 70% of 2023 bookings from the UK to date are using a deferred payment plan programme, suggesting that we want to spend, but are taking advantage when given the option to not pay right now when we can.
Analysis by GlobalData suggests that people are spending on travel and cutting elsewhere, defiant to hit the beach no matter what, even suggesting UK outbound travel will surpass pre-pandemic levels by 2024. Their Travel & Tourism Analytics team summarised the industry bounceback despite the potential ‘age of austerity’ looming:
“Many European travellers keen on keeping their holiday plans may simply cut the amount they spend on products and services both before and during their trips.’
2. Destinations are seeing UK visitation reach pre-pandemic levels
Tourist boards are rejoicing as weary Brits return. Brit favourite Tenerife has nearly matched 2019 levels of tourism, and the equivalent of 1 in 22 people from the UK is predicted to have visited Turkey by the end of the year, with the Lira currently weak against the pound making trips here particularly cheap. The Caribbean is also currently on track for visitor numbers to be 10% higher than 2019.
And we’re flying away from our domestic financial woes – Heathrow was back to nearly 80% of pre-Covid levels in May this year, with a predicted increase of 7% for 2023.
3. Luxury is full steam ahead
Although many are choosing to save and defer payments, the luxury market is still very much alive and kicking. The fact that the Maldives is currently developing a ‘floating city’ and the continued growth of Airbnb Luxe (previously a brand originally associated with on-the-go sofa stays for thrifty backpackers) suggests that the dreaded COLC isn’t impacting everyone’s wallets on the travel front.
lastminute.com has also reported that Italian city breaks, not traditionally easy on the wallet, are on the rise vs other destinations, suggesting many are looking for a bit of La Dolce Vita. The Maldives, Dominican Republic and Mauritius are all seeing a higher level of bookings compared to pre-pandemic, as bucket-listers and honeymooners look to snatch back the two years lost when you couldn’t go much further than your front door.
So for now it looks like travel, and after a pretty horrific three years, gets to cautiously glance at 2023 with a slightly smug expression. Normality – ‘are we nearly there yet?’ – it seems like we could be on our way.