Expedia Shows How Travel Is Recovering Faster Than Expected
The Covid pandemic hammered the global travel industry. International travel was almost impossible and even as restrictions were relaxed the regime of vaccination and testing discouraged many potential travellers. Domestic travel was about as good as it got for the summer season in 2020 and 2021.
However, the travel recovery has arrived with force in 2022. It’s not even a limping recovery, companies like Expedia are reporting record results. When the popular online travel agent reported their 2022 Q2 results in August they announced that they had recorded their highest ever quarterly revenue figures as well as the highest total number of accommodation bookings.
In a media statement, Peter Kern, vice chairman and CEO of Expedia Group said: “Despite the disruptions during the summer travel season and an uncertain macroeconomic backdrop, travel demand has remained strong.”
Consulting giant McKinsey has been documenting the recovery of travel in detail on their website and in their McKinsey Quarterly magazine. In the latest edition from July 2022, their analysts noted the sharp increase in companies that are now allowing non-essential travel. From just February 2022 to April 2022 this grew by 26% for international travel and 13% for domestic. It’s getting close to normal.
Expedia also recently published their regular ‘Traveler Insight Report’ in August. This is a quarterly summary of trends across the travel industry. It makes for interesting reading for anyone watching the industry, featuring insight such as:
- Travel searches hold steady: from Q4 2021 to Q1 2022 there was a 25% jump in searches across all Expedia sites and this held steady into Q2 with some jumps related to specific news – such as the US no longer requiring Covid testing.
- Search windows still shorter: the 61-90 day search window has increased by 15% – people are booking more travel in the near future.
- Long-haul is returning: there has been a 50% YOY increase in flights longer than 4 hours, showing that long haul travel is growing fast.
- Demand strong even as costs increase: fuel prices are going up, leading to higher travel costs, but bookings are still at record levels.
- Inclusive travel on the agenda: 92% of travellers believe that inclusivity is important, but only half have ever seen accessibility options available when booking a trip.
The Expedia data shows that the travel industry is not just rebounding from the pandemic, there is strong growth taking place. All travel and hospitality brands need to plan for this. Customers have been relatively patient in 2022 – they know that the industry is recovering from an enormous shock, but they will not tolerate Covid used as an excuse for poor service for much longer.
Tourism promotion agencies are also more interested in attracting tourists from their home region. In the middle of the pandemic, this was just about the only travel that was possible, but as we see a return to normal many of these agencies are seeing that some people are keen to keep on visiting places closer to home. There is also a return to more curated travel – travel agents who really understand destinations are in more demand.
Travel brands need to ask how has the industry changed? How has consumer behaviour changed? How does our customer experience need to change? Meeting customer expectations in the post-pandemic business environment will not just be a case of snapping back to what was normal in 2019. The hotel sector is a good example of this with average rates now higher than before the pandemic – after not being able to travel, people are prepared to spend more, but their expectations are also higher.
New opportunities are emerging, such as live one-on-one video chat and the metaverse. Customers booking expensive travel are soon going to expect to take a look around the resort before booking – will you be ready or still expecting the customer to hand over thousands based on a photo of a swimming pool?
Online travel agents and other actors in the wider travel industry need to stop and review the recovery. It’s great to see how the industry is growing again, but what has changed and what will your customers expect in the 2020s?
Please get in touch with me directly on LinkedIn here if you want to discuss these ideas further.
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