Each quarter, we continue to dig deeper into the traveler experience and identify barriers and points of friction that keep travelers at home or traveling less frequently based on a quarterly consumer survey with Ipsos.

These insights, combined with surveys of current business travelers and corporate executive perspectives from the Quarterly Business Travel Tracker, highlight the greatest opportunities to grow travel.

Macroeconomic Conditions: Effects on Consumers

As we highlighted in a recent blog, the possibility of a “soft landing”—an ideal situation when the Fed can raise interest rates just enough to curb high inflation but without causing a recession—has gained momentum.

The resilience of the U.S. economy, largely supported by consumer spending, continues to be impressive but there are headwinds building and some economists have cut the odds of a recession in the next 12 months—largely due to moderating inflation and solid job growth which is supportive of the Fed concluding interest rate hikes.

Still, there are many converging factors at play and the possibility of a recession towards the end of 2023 or early 2024 is not off the table.

Following strong leisure demand this summer, the fall and winter seasons appear to be much more tenuous for the travel industry—particularly as it relates to leisure. Group and transient business travel as well as international inbound still have room to grow and will likely offset any slowing leisure demand for the remainder of the year.

Analyzing the Challenges: Key Pain Points Impacting Demand

Taking time off to travel remains more important than ever for more than half of Americans (54%), yet hassles are having a negative impact on demand resulting in a negative economic cost and hindering travel industry’s growth.

Half of air travelers agree they would travel more in the next six months if the travel experience were not as much of a hassle, similar to Q2. Additionally, 16% agree that due to a recent negative experience, they will plan to travel less in the future.

  • The majority of travelers expect the air travel experience to be inefficient and a hassle. Nearly six in 10 recent air travelers (56%) view air travel as the same or worse than going to the DMV.
  • Fewer than one in five recent air travelers (17%) rate their overall experience as excellent and entirely hassle free.
  • Additionally, one-quarter of recent air travelers (24%) are less likely to book air travel over the next year due to air travel hassles experienced.
    • The top reasons they’ll avoid traveling are the likelihood of flight delays or cancellations and airport process inefficiencies.
  • On average, air travelers who are less likely to book air travel are avoiding an average of 2 trips per year due to air travel hassles, equating to 27 million trips avoided and $71 BILLION IN LOSSES for the U.S. economy over the next year.

Air travel inefficiencies are holding back business travel’s return which remains 29% below 2019 levels in 2022.

  • Eight in 10 business travelers would avoid business travel as a result of a variety of travel hassles.
  • One third of business travelers report traveling less for business post-pandemic than they did pre-pandemic.
    • The primary reason for less travel is a lack of client or industry demand for in-person events (35%), followed by company travel policies (26%). However, the unpredictability of flights due to cancelations and delays (14%) is also a contributing factor resulting in less business travel today.
    • Business travelers would take an average of TWO more business trips per year if air travel hassles improved, resulting in 18 million additional trips and $52 BILLION in ECONOMIC IMPACT.

Summer Travel and Fall Expectations

As seasonality trends return this fall, demand for travel remains strong but is normalizing.

  • Just under half (49%) of Americans and 74% of leisure travelers plan to travel in the next six months, down from Q2 (53%) and Q1 (52%).
  • Additionally, travel spending expectations are slowing somewhat with one in five Americans planning to increase the amount they spend on leisure travel in the next three months, returning to Q1 levels (19%) after increasing in Q2 (26%) ahead of the summer travel season.
  • The primary reasons leisure travelers have for upcoming travel plans are vacation (62%), followed by spending time with family or friends for non-holiday related reasons (53%).
    • While one-quarter plan to travel for the winter holidays (26%), and 19% for Thanksgiving, seven in 10 leisure travelers (70%) would prefer to avoid travel during high demand periods such as Thanksgiving or Christmas.

Business Travel: As the traditional summer vacation season comes to a close, companies are looking to corporate business travel to pick up momentum heading into the fall.

According to Ipsos, 74% of business travelers plan to travel for work in the next six months.

Corporate groups are helping with midweek offseason demand and there is an increasing desire to get remote colleagues together to budget and plan for the new year ahead.

  • Four in 10 corporate executives are planning to spend the same or more as last year on business travel to visit clients, customers and other stakeholders – up from 35% in Q2 and 29% in Q1.
  • Similar to Q2, 39% of executives expect to spend the same or more on travel to attend group meetings, conventions and tradeshows while two-thirds of executives expect to spend less on internal meetings compared to last year.

While executives continue to agree that business travel is essential to company operations (86%) and appear to be more optimistic about their business travel investment in the near term, minimizing costs and the efficiency of meetings remain top of mind.

  • And while the share of organizations (38%) with policies in place restricting business travel continues to decline, additional cost controls and more strict evaluation of why and who travels remain the top policies in place today.
  • While more than two-thirds (36%) cited increasing company revenues as the primary factor driving increased investment in business travel, the state of the economy is also top of mind for executives, 25% believe that a stronger U.S. economy motivate them to increase business travel spending in the next six months.

A recent American Express Global Business Travel report with Harvard Business Review also found that the majority of business decision makers believe travel drives growth but programs need more executive support. The survey reiterates the importance of bringing people together—especially now that teams are more dispersed.

Advancing Seamless and Secure Travel

Americans are supportive of solutions including sharing biometric data if it resulted in a more seamless, secure and efficient travel experience.

  • Nearly six in 10 recent air travelers (59%) say as a result of advances in security technology, it is time for the government to reassess certain security measures.
  • Roughly two thirds of recent air travelers and business travelers are comfortable sharing their biometric data with either the government, a private corporation or both.
  • More than half of Americans and approximately two-thirds of recent air travelers are comfortable using biometrics to board a plane (63%), get through security (68%), touchless ticketing (64%) or to check in for a flight (62%).

The results of these quarterly surveys are critical to help inform and support our broader strategic objectives as they relate to improving the travel experience and developing seamless and secure policy priorities.

Look for Q4 Quarterly Insights this winter.

Greg Staley
U.S. Travel Association

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