The unabated "revenge traveling" era may be ending.
After years of rising inflation and travel costs, new reports suggest that travelers are finally curtailing travel plans.
Morning Consult, a research firm, has released a new report that shows travel intentions increasing in some countries but flatlining in others. This is most noticeable in Europe.
Morning Consult’s “The State of Travel & Hospitality” report, published in September, shows that travel intentions have dropped by 11 percentage points since 2022 in France and 6 in Germany.
The survey also showed that interest in travel fell in Canada and Russia (-4 percent each).
Lindsey Roeschke is a travel and hospitality analyst with Morning Consult. She said that the data shows that pent-up consumer demand is ending.
She said: "That doesn't mean that travel will drop significantly again. But... in summary, most of those who waited to take their "revenge trips" have already taken them."
Roeschke said that the slowdown could be more noticeable in Europe.
She said that "much of it is due to the economy - inflation has eaten into consumers' savings over the last year, and forced them to reprioritize their spending."
The summer surge of North American tourists drove up prices, making travel more expensive for Europeans. This paints a "more pessimistic view on travel in comparison to other regions."
"Revenge Travel likely to fade"
In Asia-Pacific where Covid border controls have been in place for longer than in other parts of world, it is expected that pent-up demand will last longer.
A new report from the economic consulting firm Oxford Economics states that "short-haul'revenge' travel is likely to fade".
The trend of Singaporean tourists visiting Malaysia has started to reverse since late 2022, when the number of Singaporean tourists increased.
The report says that after an initial rush of short-haul flights, we can expect a similar dynamic, even if it is less pronounced.
Reports said that arrivals from the United States, Europe and other countries are also likely to decline, as the effects of tightening financial policies will be felt by travelers.
The report says: "We remain confident that the U.S. economy will be in recession by the end of the year." Travel is a luxury item and one of the first things to be reduced when times are tough.
Chinese consumers are losing their zest for life
Morning Consult’s report indicates that travel intentions have increased in several countries, including China, Mexico, and Japan.
The Japanese travel enthusiasm is still low, with only 53% of respondents planning to travel in the next year. This is the lowest among the 15 countries surveyed.
The travel industry is booming, however. According to Chinese travel agency Fliggy, as the country celebrates "Golden Week", domestic bookings have increased by nearly six times, and outbound bookings by more than twenty times, year-on-year.
Nomura: The pent-up Chinese demand is "nowhere as large" as the U.S.
Oxford Economics warns that this level of enthusiasm may not last.
After the initial spending surge, Chinese consumers have lost their enthusiasm. It states that high unemployment, negative wealth impacts from the troubled real estate sector, and low wage growth are not conducive to spending on foreign holidays.
The report warns that as Chinese tourists continue to travel within China, their travel preferences could permanently change. International trips may no longer be seen as a status marker.
The majority of Chinese tourists travel within China, including its special autonomous regions Hong Kong and Macao. According to GGRAsia (a company that tracks Asia’s casino industry), standard rooms at 22 Macao casino hotels were sold out three days of the eight-day holiday.
The surge in demand due to pent up supply may be about to run out.
Morning Consult reported that interest in certain destinations among Chinese tourists is declining. Intentions to travel to North America dropped 23 percentage points since 2022, far exceeding the drop in interest shown by South Korea (12%) and Japan (9%)
The report says that the drop in China is especially concerning. The report states that the reasons for the drop are a mixture of logistical (flights are scarce and costly) and geopolitical factors (tensions between the U.S. government and Chinese government are high).
Fizzling pent-up demand
As flight and passport processing restrictions ease, outbound travel from China will continue to grow. Oxford Economics says that it may not be sufficient to compensate for the loss in travelers from other regions.
The report says that the tourism boom in Asia has reached its peak. The report states that "although mainland Chinese are important to the region, growth in numbers will not be enough to slow the pace of tourism recovery in most places."
The report states that "the boost from pent up demand could soon be over." Consumers in advanced economies will probably moderate their spending plans due to an uncertain economic climate. Other countries may follow if their own economies get sick.
The travel industry is still optimistic. According to a JLL survey released on Thursday, 77% of hotel operators and owners in Asia-Pacific expect occupancy levels to rise by 2024.