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Redefining Wanderlust: The Shift from Travel From a \'Want\' to a \'Need\'
Historically travel demand has been directly tied to economic conditions. Travel demand has increased during times of economic prosperity and declined during economic declines or recessions; however, COVID significantly impacted travel demand shifting it closer to a “need” than a “want.” This change reflects a deeper societal shift where experiences and exploration have become integral to personal fulfillment and well-being.
Is this shift a temporary reaction or a long-term trend? How will it shape the future of travel and tourism? I brought these questions to the HSMAI Global Distribution Advisory Board to discuss with the experts in the room. Read on for the takeaways from our discussion.
Short-Term Reaction or Long-Term Trend?
Most of us are optimistic about the sustained growth in travel demand. Factors like increased domestic travel, the resurgence of events and conferences, and the emergence of newer markets all contribute towards this optimism. The rise of remote work and the desire for flexible work policies, particularly among younger generations, may recalibrate travel patterns, leaning towards more meaningful and experience-driven travel rather than traditional luxury tourism. However, several members of the Advisory Board cautioned against potential dampeners such as economic uncertainties and changing work dynamics – which could anchor people back to a desk and limit flexibility.
Generational Shifts and Demographic Trends
Younger generations, notably, are prioritizing travel and experiences over traditional life milestones like marriage or children and are often more interested in spending their disposable income to get out into the city or connect with nature. This generational shift signals a potential pivot in travel demand towards more wellness experiences and options that allow flexibility. On the other end of the spectrum, boomers are retiring and there’s an element of increased traveling there. However, not everyone is eschewing traditional norms, and geographically we see differences even among generations.
Geopolitical Instability and Safety Concerns
In the wake of COVID and with growing geopolitical tensions, travelers are increasingly prioritizing safety and security. This trend could lead to a rise in domestic travel or travel to destinations that are perceived as safer. There is an additional aspect on the impact of a conflict relative to the macroeconomic context that will need to be assessed and whether a potential for something like a rise in fuel prices would affect travel demand.
As travel stabilizes, growth may not be exponential, but the industry can expect a more informed, experience-seeking traveler.
Questions
- As we approach 2024, given the current economic conditions, pressure from inflation and labor costs, do we anticipate that this prioritization on travel will remain, or do we see the market returning to historical norms?
- How do we see the generational prioritization impacting demand in the future?
- Will geopolitical instability have a significant impact outside of areas of unrest?
Nathan Kellar, Senior Director Distribution US/CAN + Global Wholesale, Marriott International, HSMAI Global Distribution Advisory Board Connect with Nathan on LinkedIn.
This article originally appeared on HSMAI.