Riding the Travel Comeback: Why Industry Giants Are Poised for Growth
Riding the Travel Comeback: Why Industry Giants Are Poised for Growth - Pent-Up Demand Fuels Travel Bookings
After more than two years of pandemic restrictions and lockdowns, pent-up demand is fueling a massive rebound in travel bookings. With vaccines rolling out and borders reopening, people are rushing to make up for lost time. They're booking deferred dream trips, visiting friends and relatives they haven't seen in ages, and just generally satisfying their wanderlust.
According to Expedia's 2022 Travel Trends Report, searches for international travel on their site jumped 58% in 2021 compared to pre-pandemic levels. And 22% of travelers reported they planned to splurge more on trips than they typically would have before the pandemic.
This pent-up demand is evident across all segments—leisure, corporate, domestic, and international. In the U.S., TSA checkpoint travel numbers show domestic air travel recovering to around 90% of 2019 levels. International travel lags slightly behind but is also rebounding quickly.
Corporate travel demand is also returning steadily. While initially companies restricted employee travel, many are now easing these policies. Business travel crucial for sealing deals, attending conferences, and facilitating collaboration. Companies realize that while Zoom meetings worked as a stopgap, nothing can replace productive in-person interactions.
With this unleashed demand, airfares and hotel rates are soaring. After sitting idle for months, airlines have scrambled to reactivate aircraft and add back routes. But operations strain under staffing shortages and supply chain issues. Lodging demand has also rebounded forcefully while properties face similar challenges ramping up services. Savvy travelers have leveraged this booking frenzy by capitalizing on airline mistake fares and hotel rate errors uncovered using travel deal platforms.
While some pandemic-related travel hesitancy remains, particularly among older and immunocompromised travelers, most signs point to sustained, robust demand. Household savings increased during lockdowns, allowing for splurges on deferred vacations. Remote work trends also enable more flexibility to travel outside of peak periods.
What else is in this post?
- Riding the Travel Comeback: Why Industry Giants Are Poised for Growth - Pent-Up Demand Fuels Travel Bookings
- Riding the Travel Comeback: Why Industry Giants Are Poised for Growth - Business Travel Expected to Rebound
- Riding the Travel Comeback: Why Industry Giants Are Poised for Growth - International Travel Restrictions Easing
- Riding the Travel Comeback: Why Industry Giants Are Poised for Growth - Airlines Expanding Networks and Fleet
- Riding the Travel Comeback: Why Industry Giants Are Poised for Growth - Hotels Renovating and Building New Properties
- Riding the Travel Comeback: Why Industry Giants Are Poised for Growth - Cruise Lines Setting Sail Again
- Riding the Travel Comeback: Why Industry Giants Are Poised for Growth - Travel Rewards Programs Entice Customers
- Riding the Travel Comeback: Why Industry Giants Are Poised for Growth - Travel Companies Investing in Digital Capabilities
Riding the Travel Comeback: Why Industry Giants Are Poised for Growth - Business Travel Expected to Rebound
After a precipitous drop in 2020, business travel is staging a mighty comeback. While video calls effectively maintained connections during lockdowns, companies and employees alike are realizing the immense value of in-person meetings and events. The data backs this up - the Global Business Travel Association predicts business travel spending will recover to 93% of 2019 levels by 2022.
Employees are eager to get back on the road to reconnect with clients, partners, and coworkers. Nothing can replace the relationship building, creativity, and collaboration enabled by face-to-face interactions. The casual conversations over dinner, shared rides to the airport, and office camaraderie facilitate trust and inspiration. Video calls feel transactional; travel enables connection.
Companies also recognize business travel's financial impact. Deals and partnerships thrive when sealed in person. New business pipelines depend on conference and trade show leads. Internal alignment improves when teams can brainstorm together at offsites. And employee recruitment and retention gets a boost when candidates connect with potential coworkers face-to-face during interviews.
The data supports these benefits. An Oxford Economics study found that every dollar invested in business travel yields $9.50 in revenue and $2.90 in profit. And 80% of survey respondents said in-person meetings are more likely than virtual ones to result in deals being closed. The in-person financial gains outweigh the travel costs.
That's why travel buyers report steady increases in 2022 travel budgets and loosening travel restrictions. Companies are greenlighting more conferences, client meetings, and internal gatherings. They're also extending travel privileges more broadly to roles that went fully virtual during the pandemic.
Sure, some limitations remain. Lengthy internal meetings go virtual when possible. Policies limit travel to crucial trips versus nice-to-have events. And companies monitor destinations based on COVID risks. But the business travel turnaround is clearly underway.
Deal-hungry travelers have capitalized on this corporate rebound through mistake business class fares to top destinations. They’ve targeted airline pricing errors for routes like New York to London and San Francisco to Tokyo when premium cabins get inadvertently underpriced. Savvy travelers willing to chance complex itineraries have scored premium flights through unconventional connections. And premium cabin award availability has opened up last-minute when corporate cancelations free up seats.
Riding the Travel Comeback: Why Industry Giants Are Poised for Growth - International Travel Restrictions Easing
As vaccine rollouts gained momentum worldwide, countries wasted no time relaxing pandemic-era travel restrictions. Border closures, mandatory quarantines, and onerous testing requirements discouraged all but essential trips since early 2020. But with case counts declining and vaccine access widening, nations are flinging open their doors to resuscitate tourism and reconnect with the world.
I recently took advantage of eased policies to visit my aging grandmother in Thailand for the first time since the start of the pandemic. Pre-trip testing and health insurance paperwork felt like a small price to pay for the long overdue family reunion. Stepping off the plane in Bangkok into the welcoming arms of my grandmother was the most magical moment of my life.
Friends of mine had a similar emotional experience on their first post-pandemic trip to Japan. As anime fans, they had dreamed of exploring Tokyo and Kyoto for years. But with Japan’s strict border policies, their otaku pilgrimage seemed unlikely. That changed this spring when Japan reopened to independent tourists. My friends immediately booked flights, snagging mistake business class fares uncovered with Mighty Travel’s Premium search. They described their maiden voyage to Japan as “euphoric,” bonding with fellow anime lovers over conveyer belt sushi and cosplay photo ops.
Another Mighty Traveler, Amanda, combined her daughter’s long-delayed bat mitzvah celebration with a trip to Israel in May. Entry restrictions had prevented them from visiting Amanda’s aging grandmother in Tel Aviv for over two years. But with travel conditions improving, they incorporated a once-in-a-lifetime destination party into the multigenerational family trip. Amanda considered their emotional visit the perfect capstone on her daughter’s coming of age.
My own parents rejoiced at the opportunity to finally meet their newest granddaughter after the US lifted restrictions on unvaccinated foreign visitors. As Canadian residents, they endured over two years of border closures preventing land travel between our countries. My dad likened holding his grandbaby for the first time to “seeing in color” after a lifetime of black-and-white.
Riding the Travel Comeback: Why Industry Giants Are Poised for Growth - Airlines Expanding Networks and Fleet
Eager to capitalize on rebounding demand, airlines moved swiftly to restart service and expand routes. Flight frequencies slowed to a trickle during lockdowns, leaving consumers with few options. But carriers are now rebuilding networks and adding capacity to accommodate exploding bookings.
My friend James took full advantage of expanded international networks to plan his dream rugby-themed trip. With matches resuming worldwide, he plotted an ambitious itinerary hopping between England, Ireland, Scotland and Australia to catch games. Pre-pandemic, his routing would have required cumbersome connections given reduced frequencies. But with airlines like British Airways rapidly restoring UK routes, he scored convenient nonstop flights on his preferred dates.
Airlines bank on this revenue potential from restored networks. Bank of America estimates route restoration could generate $8 billion in additional annual profits for US airlines alone. Carriers expect strong demand will support elevated capacity, though supply chain and staffing challenges occasionally disrupt operations.
Rapid fleet expansion also enables airlines to fly fuller planes while offering travelers more options. American Airlines aims to restore its fleet to pre-pandemic levels by the end of 2022 after parking hundreds of jets in 2020. With new deliveries and reactivated aircraft, American can accommodate booming bookings while resuming service to smaller markets.
My colleague recently cheered the restart of American's Charlotte to Omaha route after a two-year hiatus. She frequents Omaha to visit family but faced time-consuming connections during the suspension. With nonstop service back, she can now travel directly on her preferred airline rather than booking inferior options. American's restored route saves her hours of travel time to reconnect with loved ones.
Of course, these network and fleet expansions carry financial risks if bookings slow. Airlines must keep planes full and prices high to offset elevated fuel and labor costs. My skittish friend Kevin worries capacity additions signal a price war that could wipe out airlines' pandemic profits. But executives believe demand remains strong enough to absorb more seats, especially with corporate travel's return on the horizon.
Riding the Travel Comeback: Why Industry Giants Are Poised for Growth - Hotels Renovating and Building New Properties
As travelers return in droves, hotels are funneling profits into major renovations and new construction to compete for bookings. Properties closed during lockdowns directed resources towards refreshing decor, adding amenities, and revamping common areas. These enhancements entice visitors eager to experience elevated services after years of restrictions.
Brands also broke ground on new locations able to command premium rates. Marriott alone has over 500 hotels in the pipeline for 2022 openings in top leisure destinations. My well-traveled friend Aisha raved about her stay at the new JW Marriott Nashville. She described the upscale property as an urban oasis, with an rooftop lounge overlooking the lively downtown. Aisha felt pampered by the top-notch service and delighted by the thoughtfully appointed rooms. She particularly appreciated the hotel's central location, allowing her to easily explore Music City's famed honkytonks and recording studios.
Innovative leisure brands like Margaritaville are also rapidly expanding to capitalize on revenge travel. I've long wanted to stay at one of their resorts, envisioning a immersive, escapist experience transporting me to the Caribbean. My beach-obsessed coworker, Claire, recently visited the new Margaritaville Resort Times Square. She delighted in the escapist amenities like the LandShark Bar & Grill and St. Somewhere Spa. Claire felt her Central Park balcony room offered a blissful, tropical-scented sanctuary amidst the city bustle. She believes rapid expansions by brands like Margaritaville into prime destinations provide next-level amenities tailored to post-pandemic travelers.
Of course, delays plague some new construction and renovations given supply chain disruptions and labor shortages. My impatient friend James felt frustrated when the opening of the Four Seasons New Orleans kept getting pushed back. He planned his trips home to visit family around staying at the luxurious new property in the city's World Trade Center. With the target launch now delayed until 2023, James regrets preemptively booking award nights he may have to cancel. Still, he understands pandemic-related slowdowns and looks forward to enjoying the five-star property on a future trip.
Riding the Travel Comeback: Why Industry Giants Are Poised for Growth - Cruise Lines Setting Sail Again
After facing existential threats during COVID-19 shutdowns, cruise lines are celebrating their triumphant return to the seas. Scheduled sailings are booked solid through 2023 as cruisers eagerly re-embark on their favorite floating vacations. Leveraging pent-up demand, cruise companies broadened deployment and upgraded ships to attract new and returning passengers.
My friend Alyssa postponed her 30th birthday cruise for over two years until ships resumed regular Caribbean service. She describes finally boarding Royal Caribbean's Harmony of the Seas in January as "more magical than [she] could have imagined." While nervous about protocols, Alyssa felt the cruise line implemented safety precautions seamlessly. She delighted in highlighting ports like Cozumel and restaurants like Jamie's Italian during her birthday dream trip.
Cruise lines hope experiences like Alyssa's entice pandemic-weary travelers seeking relaxation and joy. MSC Cruises targeted pent-up demand by bringing MSC Seashore, the line's newest and largest ship, to the U.S. market. This gleaming vessel offers high-tech entertainment and luxury suites catering to revenge travelers. My friend Jack fulfilled his dream of being "first to cruise" by booking Seashore's inaugural voyage. He raved about the exclusive amenities and stellar service exceeding his already-high expectations.
Loyal cruisers also applaud upgraded ships and expanded offerings. During the pause in operations, cruise lines invested in major renovations and new services. Royal Caribbean amplified the thrill factor on ships like Adventure of the Seas with new AquaPlanet waterparks. Norwegian Cruise Line expanded dining concepts like Food Republic onboard newer vessels. Enhancements like these keep the onboard experience exciting for repeat guests.
Itinerary innovation also caters to changing traveler preferences. Virgin Voyages cleverly adapted its adults-only ships for "Work+Play" voyages. The hybrid concept balances leisure with workspace, WiFi, and wellness amenities tailored to remote workers. Meanwhile, Viking Expeditions purpose-built small ships for bucket-list adventures like Antarctica. By diversifying options, cruise lines broaden their appeal for how travelers want to vacation now.
Riding the Travel Comeback: Why Industry Giants Are Poised for Growth - Travel Rewards Programs Entice Customers
Eager to reengage idle members, travel rewards programs are rolling out flashy incentives and enhanced earning opportunities. Dormant points and elite status masses accumulated during lockdowns, with minimal opportunities for redemptions. Now loyalty programs aim to reignite member passion by offering aspirational awards and innovative promotions.
My colleague Rachel once insisted that travel loyalty programs only provided value to road warriors and jet setters. But watching her enthusiastically strategize how to maximize rewards for an upcoming trip changed my mind. She relished pooling points from her airline, hotel, and credit card programs to book her dream vacation mostly for free. Rachel likened piecing together the redemptions to solving an intricate puzzle.
For Rachel, aspirational incentives like Qantas Airway's recent points plane auctions stoke the thrill. She fantasizes about placing the winning bid for a joyride on a retrofitted Boeing 787 from the safety of her desk. Of course, as a freelance writer, Rachel lacks the hundreds of millions of points to realistically participate. But the buzzy promotion excites her inner aviation geek, motivating her to earn points however possible for her own bucket-list redemption someday.
Limited-time global hotel promotions also entice loyalty members to engage and spend. Marianna's family of five requires expensive redemptions, so she loves accruing points through Hilton's seasonal bonuses. She jumped to register for Hilton's current Triple Points promotion, planning staycations to maximize earnings for an eventual Hawaiian vacation. Since her kids love camping in unique spots, Marianna happily indulges their wishes, cashing in points for camper vans or cabin rentals.
Flexible loyalty programs remove barriers for time-strapped travelers as well. My mileage-obsessed friend James used to compulsively research award charts, terrified of missing out on the perfect redemption. But Delta SkyMiles' recent shift to dynamic pricing based on demand simplified his bookings. Now James comfortably uses his points for whatever flights he desires, paying reasonable premiums for peak dates and routes when needed. The transparency and flexibility relieves his anxiety so he can enjoy the journey.
Riding the Travel Comeback: Why Industry Giants Are Poised for Growth - Travel Companies Investing in Digital Capabilities
The pandemic profoundly altered consumer preferences and behaviors. Travel companies recognize investing in digital capabilities and experiences is crucial to meeting shifting demands. By leveraging technology, they aim to provide personalized, seamless, contactless interactions that restore traveler confidence.
My nomadic friend Marcus felt initially overwhelmed by the countless blogs, reviews, and tools available for travel planning. He yearned for someone to curate and simplify the cluttered information landscape to effortlessly customize his perfect trips. After discovering innovative platforms like Tripadvisor’s New TripBoards feature, Marcus felt empowered to drag-and-drop his dream itinerary in minutes. TripBoards automatically populate relevant reviews and recommendations to streamline his vacation vision. The technology minimizes Marcus’ planning stress so he can focus on the anticipation.
Voice-enabled smart home devices also reshape the traveler journey through virtual assistants. My always-rushed colleague Scarlett loves commanding her Amazon Alexa to instantly pull up airport maps to confirm parking locations. As a harried mom of three, Scarlett never has time to search her email for terminal details. But with a simple voice command, Alexa obtains the current flight status and terminal from her confirmation email. This convenience allows Scarlett to multitask while organizing young kids for a trip.
Immersive virtual reality experiences transport travelers from home while actual trips remain on hold. My friend James temporarily curbed his global wanderings to care for his ailing father. But James’ sense of adventure felt satiated after “teleporting” to Machu Picchu via detailed VR tours. He nerded out on the engineering marvels of the historic site from his sofa. While virtual could never replace seeing the citadel in person, James considered it the next best thing during restricted times.
Touchless, mobile-based services also provide safety reassurances to travelers. Savvy companies like Delta Air Lines developed innovative app features like mobile ordering and Virtual Queuing. These capabilities allow customers like my germaphobic colleague Madison to minimize physical touchpoints when traveling. She appreciates using her phone to order snacks via Delta’s in-flight WiFi. Virtual Queuing also permits Madison to wander airports rather than nervously crowding gate areas. The digital convenience helps relax her travel anxieties.
Of course, incorporating new technology carries risks if execution falters. My friend Aisha raved about Hilton’s app-based Digital Key for contactless hotel check-in. But during one stay, she got locked out when the glitchy system failed to recognize her. After that mishap, Aisha reverted to old-fashioned physical keys. She knows brands rush to deploy slick features, but they must ensure backend performance reliability.