The era of unabated “revenge travel” may be coming to a close. According to new reports, travelers are starting to curtail their travel plans due to inflation and rising travel costs.
A recent report by Morning Consult reveals that travel intentions are increasing in some countries but flatlining or declining in others, particularly in Europe. The report shows an 11 percentage point drop in travel intentions in France and a six point drop in Germany since 2022. Interest in travel has also fallen by 4 percentage points each in Canada and Russia.
Survey: Jan 2021-July 2023; 14,000 adults; margin of error +/-3%.
Source: Morning Consult
According to Lindsey Roeschke, a travel and hospitality analyst at Morning Consult, this suggests that the pent-up demand for travel is beginning to fade. However, Roeschke adds that travel is not expected to decline significantly. She states, “The majority of those who were waiting to take their ‘revenge trips’ have already done so.”
Roeschke suggests that the slowdown in travel intentions, especially in Europe, is largely due to economic factors. Inflation has eroded consumer savings, causing travelers to prioritize their spending. Additionally, an influx of North American tourists has driven prices higher, making travel more expensive for Europeans.
‘Revenge travel likely to fade’
A new report by Oxford Economics predicts that the trend of “revenge travel” is likely to fade in the Asia-Pacific region as well. Although pent-up demand fueled travel in the first half of 2023, the report states that the trend is starting to reverse. This is evidenced by a drop in Singaporean visitors to Malaysia following a surge in late 2022.
The Oxford Economics report also mentions that inbound arrivals from other parts of the world, particularly the United States and Europe, are likely to decrease as tighter monetary policies impact travelers’ budgets. The report states, “Travel is for the most part a luxury good and among the first things to be cut back when times get tougher.” It also suggests that a potential recession in the United States may further dampen travel plans.
Chinese consumers ‘losing their gusto’
While travel intentions are increasing in China, a Morning Consult report shows that interest in traveling to certain destinations, such as North America, is declining. Intentions to visit North America dropped by 23 percentage points from 2022. The report states, “The drop in China is particularly concerning,” as logistical and geopolitical factors contribute to the decline.
Furthermore, Oxford Economics warns that Chinese consumers’ enthusiasm for travel may be fading due to high unemployment, negative wealth effects, and weak wage growth. The report notes the risk of a permanent shift in travel preferences among Chinese tourists, who are currently opting for domestic travel within China and its special autonomous regions of Hong Kong and Macao.
In Macao, for example, standard rooms in 22 casino hotels were sold out for three days during the Golden Week holiday period, indicating strong domestic travel demand.
The boost purely from pent-up demand may soon run its course.
According to Oxford Economics, although outbound travel from China is expected to continue growing, it may not be enough to compensate for the decline in travelers from other regions. The report states, “The tourism boost to Asia has passed its peak,” and predicts a slowdown in the overall pace of the tourism recovery in most places.
Nevertheless, the travel industry remains optimistic. A survey by JLL shows that 77% of hotel owners and operators in Asia-Pacific expect a rise in occupancy levels in 2024.
