In an effort to dig deeper into the traveler experience and identify barriers and points of friction that keep travelers at home or traveling less frequently, we launched a quarterly consumer survey with Ipsos at the start of the year.
These new insights combined with surveys of current business travelers and corporate executive perspectives from the Quarterly Business Travel Tracker in collaboration with JD Power and Tourism Economics will help anticipate and identify consumer opportunities and risks—highlighting the greatest opportunities to grow travel and ensure it is established as essential.
Survey results will be used to elevate the importance of our industry by driving media headlines, influencing business leaders and identifying pain points in the travel experience to inform U.S. Travel’s work to modernize the travel system through meaningful solutions and policy.
Macroeconomic Conditions: Effects on Consumers
Despite many economists still predicting an economic recession later this year and continued uncertainty, the U.S. economy has largely been resilient.
Inflation is moderating but remains elevated—particularly for services. Down from its peak above 9% last summer, overall prices were up 5% as of the latest April data. The average price of gasoline is holding steady around $3.50/gallon—down considerably from $5.00 this time last year.
Additionally, consumer spending is starting to weaken—mainly for durable goods such as electronics and building materials, while spending on services including dining out and lodging continue to grow, offsetting the slowdown in goods spending.
The labor market remains fairly strong with the unemployment rate at record lows and wages continue to increase, yet there are some indications that the labor market is starting to weaken. Quit rates are slowing, job openings fell below 10 million in the latest March data and the labor force participation rate is ticking up. Yet, many employers continue to struggle to find quality labor and leisure and hospitality job openings remain elevated at 1.5 million.
Recent bank failures, the debt ceiling face off in Washington, inflation and an uncertain path for interest rates has many consumers feeling uneasy. And two-thirds of the pandemic-related excess savings have now been spent.
While many Americans feel somewhat tenuous about their own financial situation and the economy as a whole, spending on in-person experiences, particularly travel continues to be prioritized.
Summer Travel Expectations
According to many sources, travel demand this summer is expected to be the strongest it has been since pre-pandemic—and potentially the strongest ever—breaking records.
- AAA reported that more than 40 million Americans are expected to travel Memorial Day weekend—up 7% from 2022 and air travel will be 5% higher than 2019. The weekend is expected to be the busiest day at airports since 2005.
- And according to the Q2 Ipsos survey, over a quarter of Americans (26%) plan to increase the amount they are spending on leisure travel in the next three months up from 19% in Q1.
- As a result, just over half of all Americans (53%) and 81% of leisure travelers have travel planned in the next six months.
- Not surprisingly, families with children are more likely to be traveling for a summer vacation (74%) than non-parents (48%).
Taking time off for leisure purposes is increasingly valued. Seven in 10 Americans with leisure travel plans and 60% of all Americans agree that ‘taking time off is more important than ever’.
- And Americans understand the importance of travel to building and maintaining relationships. Over three-quarters of Americans (78%) agree that travel is important for strong connections and healthy relationships.
- Reinforcing the desire to connect, the top reasons for upcoming leisure travel include spending time with family or friends (70%) followed by new experiences (37%), outdoor recreation (28%) and urban sightseeing (28%).
“Last summer, we called it ‘sold-out summer.’ This season, we’re calling it ‘sold-out summer,’ plus ‘sold-out fall’, plus ‘sold-out spring. “We are seeing continuing insane demand for travel.” - Clint Henderson, managing editor at The Points Guy
Short-term business travel demand for all types of business travel is strong.
- More than eight in 10 business travelers have plans to travel in the next six months.
- Business travel demand has remained relatively consistent over the last four quarters, however, the average business traveler in 2023 Q1 expects to travel more often.
- Business travelers anticipate taking 2.6 trips per month over the coming six months – compared to 2.0 in Q4 2022.
Despite strong demand and desire to travel for business, many organizations are reigning in business investment and travel spending with a possible economic slowdown on the horizon later this year.
- While more than eight in 10 executives agree that business travel is essential to company operations, seven in 10 decision makers expect business travel spending in the next six months to be less than last year for all types.
- Aside from having too much work to do to justify traveling, cost controls and budget concerns are the top-mentioned barriers preventing current business travelers from traveling more.
- Of the 43% of organizations with policies in place restricting business travel, executives have increased policies around spending limits and more strictly evaluating the purpose of travel and who travels.
- In line with cost control measures, the effectiveness of each business trip is increasingly scrutinized.
- The top deciding factors to authorize or commit to a business travel are maintaining critical client relationships followed by the ability to meet with multiple customers, vendors or other stakeholders.
Analyzing the Challenges: Key Pain Points Impacting Demand
While the majority of Americans view travel as more important than ever, and demand to travel appears to be unrelenting, financial concerns and a subpar travel experience are deterring Americans from traveling more.
The percentage of Americans citing personal financial reasons as a reason for not having leisure plans fell in Q2 to 37% from 51% in Q1 while air travel hassles and the possibility of flight delays and cancellations have increased for Americans choosing not to travel.
Airlines, airports and the TSA have increased staffing and are actively preparing for the upcoming busy travel season, yet the air travel system is not equipped to handle this level of demand, largely as a result of a severe air traffic controller labor shortage.
Two in five Americans (42%) say they have traveled by air for leisure in the past 12 months and 35% of those reported having a flight delayed or cancelled. And less than one-third of recent air travelers (32%) are very satisfied with the air travel experience.
Over half of Americans (52%) say they would travel more for leisure in the next six months if the travel experience was not as much of a hassle, significantly more than Q1 (29%).
- Similar to Q1, crowds and congestion, flight delays and cancellations, airport security process and cumbersome travel logistics were the main contributors to a below-average travel experience.
Business travelers are also feeling the pain and avoiding or canceling trips if it is too much of a hassle. The overall time required (38%), followed by the possibility of flight delays or cancellations (27%) were the top two reasons for avoiding business travel in the past year.
- On a positive note, the percentage of business travelers citing more efficient virtual meetings as a reason has steadily declined from 33% in Q1 to 12% in Q2.
Leaning Into Opportunity: Growing Travel and Improving Experience
With challenges, also comes opportunity for the industry to advance travel.
Many of the same pain points were mentioned as motivators that would encourage more travel if improved.
- Increased flight availability and direct flight options and travel discounts or loyalty programs are the top factors that would encourage leisure and business travelers to travel more by air in the next six months.
- Additionally, a supportive company culture and clients wanting to meet more in person are key motivators for business travelers.
Flexible work arrangements create new travel opportunities.
Three-quarters of business travelers work remotely at least some of the time, including 33% who work fully remote.
- Nearly half of business travelers (48%) plan to prioritize bleisure trips in the next six months--up from 19% in Q1.
- Additionally, corporate executives say they are supportive of flexible work arrangements and encourage employees to work elsewhere and extend business trips for leisure.
- Three-quarters of executives encourage their employees to extend their business trip for leisure purposes and 86% encourage their employees to work remotely from anywhere.
- A supportive company culture is particularly important for business travelers desiring to work remotely.
- Business travelers tell us they have recently taken advantage of flexible work situations, whether to explore a destination or take advantage of some transportation and/or lodging cost savings.
- Nearly half have extended a business trip for leisure and 29% extended a leisure trip to work remotely.
- Close to one-quarter (24%) worked remotely from a new destination and another 24% traveled with a partner or friend on a business trip to take advantage of accommodation savings and to explore a new destination.
Travel is Essential
The majority of Americans understand the positive impacts of travel to their local communities, health and family.
- Nearly nine in 10 (86%) agree that travel is an important way to educate children on history, nature and culture of other places.
- Three-quarters (74%) agree that travel is an important component to a healthy, productive and happy life.
- And Americans view travel as a positive economic contributor to their local community—more than two-thirds (68%) agree that travel is an important to local businesses and jobs in their community and 62% agree that the taxes paid by travelers are essential to fund public services such as firefighters, police and teachers.
Advancing Seamless and Secure Travel
Americans are surprisingly comfortable with sharing biometric data if it improved their experience.
- Nearly six in 10 recent air travelers would likely use biometrics to get through airport security if it reduced their time by 20 minutes.
- Additionally – one in five air travelers have experienced a new TSA initiative or technology such as the use of facial recognition technology and 91% were satisfied with the airport security process when using this new technology.
The results of these quarterly surveys are critical to help inform and support our broader strategic objectives as it relates to improving the travel experience and developing essential and seamless policy priorities.
Look for Q3 Quarterly Insights in early Fall.