The UK’s end to all testing for fully vaccinated travelers arriving in the country from February 11 has led to an increase in bookings. Demand from sun-seeking Brits is one reason why TUI AG, the world’s largest tour operator, expects activity for this summer to be close to pre-pandemic levels. Greece, Turkey, the Dominican Republic, Jamaica and Mexico are already the most popular destinations for British holidaymakers.
At Thomas Cook, now reinvented as an online travel agent, weekly bookings from the UK since the start of this year are three times the average in 2021. The recovery is broad, spanning travel to Turkey, where weekly bookings are six times higher than last year, to weekends in Venice and Rome, which are up to five times higher.
As more countries drop their high-risk status and ease restrictions, TUI is seeing a recovery in demand across Europe, including Scandinavia, the Netherlands, France and Germany – the latter being the company’s largest common market alongside Great Britain in terms of customers. and sales. Germans are booking holiday trips to Spain (hello, Mallorca) as early as next month.
The Americans also want to leave. Destination Analysts, a data provider that surveyed US travellers, found that enthusiasm for taking a leisure trip in the next 12 months was at its highest level since the pandemic began.
It’s no wonder, then, that hotel operators Marriott International Inc. and Hilton Worldwide Holdings Inc. as well as Airbnb Inc. are seeing vacation travel rebound. Airbnb said January bookings for summer were up a quarter from the equivalent period in 2019. And Expedia Group CEO Peter Kern told Bloomberg News that summer 2022 s billed as “the busiest travel season ever”.
But airlines, hotels and tour operators need not get too carried away.
There is a risk that the virus will take another worrying turn, or that consumers will be reluctant to travel too far due to tensions in Ukraine. Reservations remain volatile in an uncertain geopolitical climate.
The biggest risk for the sector, however, could be inflation. With households spending more on everything from food and gas to TV subscriptions, families will have less money for holidays. Add to that higher borrowing costs and the nascent recovery could stagnate. Tight household budgets tend to hurt buying big-ticket items — like an expensive getaway — first.
Bookings are always made much closer to scheduled departure dates. So if consumers hold back on buying trips in July and August until April or May, for example, that gives them plenty of time to feel the pressure of rising fuel prices, taxes and rates. mortgages – and time for them to change their minds about the jet -setting. At the moment, Easter is the peak period for Thomas Cook.
Yet, given how many people have missed sunny shores, they are currently prioritizing travel over other expenses and are willing to pay more. This is a good thing, as business costs are rising due to issues such as hotel understaffing.
TUI said the average sale price for summer holidays was 22% higher than in 2019. But this reflects consumers buying – for example, buying package holidays rather than individual flights or hotels, staying longer and move to more expensive accommodation – rather than the price going up. Marriott said consumers show a “strong preference” for its luxury premises, highlighting how willing they are to spend money.
This stands in stark contrast to earlier periods of recovery during the pandemic. Over the past two years, people have been more likely to travel within the country, often driving to their destination and staying in midrange or budget hotels. Now, with more international travel, they are returning to high-end destinations.
But current inflation is widespread and people will feel higher prices whether they are staying or sightseeing elsewhere. Travel from Europe to, for example, Egypt, Tunisia or Turkey can compare favorably with parties closer to home.
There is therefore still a good chance that this summer will be exceptional. But if inflation continues unabated, savings dwindle and stock market selloffs wreak havoc on wealthy vacationers, then this new found love of travel could end in a short vacation rather than a a reliable and lasting romance.
Plus others in Bloomberg’s opinion:
• Of course, our brand has a… metaverse strategy? : Ben Schott
• Walmart has a basket full of reasons to love inflation: Andrea Felsted
• The fake snow business has nowhere to go but up: Jessica Karl and Adam Minter
This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners.
Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail sectors. She previously worked at the Financial Times.
