Forecasting the future is always tricky, and 2022 is no normal year. So, in our effort to look ahead, we recruited the help of several tourism industry veterans with longtime expertise in the airline, hotel, cruise and tour operator sectors.
Perhaps not surprisingly, those conversations focused frequently on the wide-ranging impact of COVID-19, along with the pandemic’s remarkable propensity to accelerate change.
In an era of so many ever-shifting challenges, however, one prediction appears to be certain for the tourism industry: It’s shaping up to be completely different from pre-pandemic times.
Trend 1: Flight Costs Will Increase
Talk with Peter Vlitas, executive vice president of Internova Travel Group, and he’ll tell you airline ticket prices are likely to climb.
“Given the rise in fuel and the fact that fares were extremely low in 2020 and even up to now [in 2021], I think there will be a significant price increase in 2022,” said Vlitas, who oversaw airline sales and marketing for Protravel International for 17 years. “What will a consumer do? Will they stay with the mainline carriers? Will they look to connect where it’s cheaper? Will they go to a low-cost carrier? No one really knows.”
Trend 2: Business Travel May Boost Premium Economy
Although corporate travel is a long way from a full recovery, Internova’s Vlitas said the airline industry is seeing indications that many more people are now flying for work, and he expects that momentum to build next year.
That uptick is likely to help spur an increased number of premium economy cabins on planes, according to Vlitas, who expects the higher-end seats and value proposition to be popular among both vacationers and corporate travelers.
More travelers will splurge on premium economy seats.
Credit: 2021 stock.abode.com“I think the premium economy cabin is going to be very popular among leisure travelers, who want to spend a little more to get more space because we’re now accustomed to that due to the pandemic,” he said. “I also think it’s going to be very popular for businesses that want to send somebody on a trip, but because of the pandemic don’t necessarily want to spend the money for business class. Airlines that are now putting out these premium economy cabins are going to do very, very well. Watch that space.”
Trend 3: Canceled Flights Due to Labor Shortage
The International Air Transport Association (IATA) released economic data on Oct. 22 indicating that the slow rebound of the global aviation industry — along with staffing and rehiring challenges — could mean the U.S. will finish 2021 with 3 million fewer airline industry employees than it had in 2019. Those vacancies and cuts may include not only fewer pilots and flight attendants, but also fewer ground crew workers, catering services positions and a host of other job vacancies and losses where employees previously supported the domestic air travel system.
Internova’s Vlitas said many airlines have found rehiring employees to be a challenge in recent months, and the vacant pilot and flight attendant positions have already had an impact.
When you have a shortage of crew, then you don’t have the possibility of saying, ‘Let me bring more flight attendants, let me bring another pilot.’ We’ve already seen some of that this year, where bad weather led to an unusual number of cancellations.
“What happens when you have weather that creates delays, and the delays make the crew ineligible to fly?” Vlitas asked. “When you have a shortage of crew, then you don’t have the possibility of saying, ‘Let me bring more flight attendants, let me bring another pilot.’ We’ve already seen some of that this year, where bad weather led to an unusual number of cancellations. Crews became ineligible, and airlines didn’t have backup crews to take the plane out. That will continue into 2022.”
Trend 4: Limited Hotel Services
In September, research from American Hotels & Lodging Association (AHLA) revealed that the U.S. hotel industry is likely to finish 2021 with 500,000 fewer jobs than in 2019, and that an additional 1.3 million jobs in restaurants, supply businesses and retail stores supported by hotels are also at risk.
Like airlines, hoteliers have been struggling to hire back employees. According to Ignacio Maza, executive vice president at Signature Travel Network, the resulting reduction in guest services at properties around the world is likely to continue.
“Daily housekeeping will be an option in many hotels but not necessarily the standard,” Maza said. “And things like 24-hour room service will also be curtailed in many properties. Guests are just going to have to be patient, and travel advisors are going to have to manage expectations prior to guests arriving on property.”
Trend 5: New Hotel Technology
Signature Travel’s Maza said the pandemic has definitely accelerated the use of technology throughout the hotel industry, and he expects that to continue, including more use of tech improvements by properties looking to combat employee shortages.
“We’re seeing more keyless doors, where you can check in with a QR code on your smartphone,” Maza said, noting these upgrades allow for fewer front desk staff. “At some hotels now, you have the ability to pick your room ahead of time and avoid stopping at the front desk entirely.”
It is imperative for hotels to figure out ways to put their best foot forward at a time when they are not fully staffed — and won’t be anytime soon.
Maza added that the pandemic has also accelerated the introduction of smart rooms, where guests can control the temperature, request room service, make dining reservations, ask for towels and more all from an app on their smartphone. There will always be guests who expect more personal service — especially at luxury properties — according to Maza, who noted new tech hasn’t been an immediate fix for some hotels.
“Hotels cannot convert to all this new technology overnight,” he said. “But the staff shortages are not going to go away anytime soon. It is imperative for hotels to figure out ways to put their best foot forward at a time when they are not fully staffed — and won’t be anytime soon.”
Trend 6: City Hotels Innovate With New Programming
Occupancies at urban hotels haven’t yet returned to pre-pandemic levels, according to Signature Travel’s Maza, but they are improving, and some of that is thanks to city properties reinventing themselves.
“They are coming up with different programming to attract people living in metropolitan areas who want to stay close to home in a hotel and enjoy the pool, the spa and the restaurant facilities,” Maza said, adding that many city hotels are creating new, imaginative programs to attract guests.
“For example, there is a wonderful hotel in Boston called The Newbury, and they are working with art curators and celebrated local art personalities so as part of your stay you can visit the Isabella Stewart Gardner Museum with a curator or have privileged access to the Museum of Fine Arts in Boston with an art expert,” Maza explained, noting he expects vacations close to home to remain popular. “Or you can have a tour of different food venues and restaurants in Boston with a food critic. Interesting new options like these almost turn the city hotel into a resort.”
Trend 7: Hotel Openings Will Increase
“Despite all the challenges the industry is facing, large hotel brands such as Marriott, Hilton, Hyatt and InterContinental are all building hundreds of new hotels worldwide,” Maza said. “These are opening come hell or high water. For example, St. Regis is building 29 new properties from now until 2023 or 2024, which is a big increase to its footprint. Hyatt is building 300 hotels worldwide.”
Trend 8: Expedition Cruise Products Will Grow
Much like river cruising boomed over the last decade, expedition cruise products are certainly exhibiting potential for similar dramatic growth.
And while the poles are top of mind for many consumers, warmer destinations that only small, expedition-style ships are capable of visiting have also captured the attention of a great many travelers.
Dan Blanchard, CEO of UnCruise Adventures, said his business is seeing signs of increased interest for itineraries from clientele attracted by expedition products.
Expedition cruises will continue to attract travelers, who are increasingly interested in sustainable and adventure travel.
Credit: 2021 Maridav/stock.adobe.com“We’ve seen an uptick in new clients,” Blanchard said, noting UnCruise’s 2022 summer bookings are already ahead of 2019’s pace. “We’re actually seeing our traditional returning numbers come in, but we’re seeing a higher number of new bookings from people who haven’t sailed with us before. It’s telling us there is definitely a trend toward expedition and adventure travel.”
Trend 9: Permanent Changes May Come for the PVSA
Signed into law in 1886, the Passenger Vessel Services Act (PVSA) requires foreign passenger vessels sailing between U.S. ports to make at least one stop in a foreign port. So, in February of 2020, when Canadian officials banned large cruise ships from the country’s ports, no foreign-flagged or -built cruise vessels could sail to Alaska from U.S. West Coast cities without violating the PVSA maritime law.
Alaska Senator Lisa Murkowski introduced a temporary exemption to the PVSA earlier this year that Congress passed in time to allow for an abbreviated cruise season in Alaska this summer, a move UnCruise’s Blanchard sees as both good and bad.
“On one hand, as an Alaskan, I sit there and go, ‘I’m glad they did something to help revive my economy,’” he explained. “Long-term, I like to describe it to people as if you have a McDonald’s on one corner that is U.S. staffed and U.S. built. And on the other corner, you have a foreign McDonald’s built on foreign costs and not paying taxes and staffed with foreign employees. How could you compete? Essentially, as small, U.S.-flag operators, we’ve been doing that for 30 years.”
Talk of making changes to the PVSA has been a hot topic in Alaska and the cruise industry at large. Blanchard said he still believes a final version of those changes is yet to be decided, but he does expect Murkowski to introduce legislation in 2022 that would make lasting changes to the PVSA maritime law.
It is a bit of an unlevel playing field when you say, ‘Ships of all sizes that are foreign flagged can come in and compete in coast-wise operations.
“It is a bit of an unlevel playing field when you say, ‘Ships of all sizes that are foreign flagged can come in and compete in coast-wise operations,’” Blanchard said. “If this same bill were to be put forth long-term, I would object strongly.”
Trend 10: Sustainable, Authentic Travel Will Appeal to Americans
In research data released by Booking.com on Oct. 19, more than 53% of 1,000 Americans surveyed in an online poll this summer said it’s important that their vacation is beneficial to the local communities they visit.
That same Booking.com survey revealed that 64% of Americans polled want money they spend when traveling to go back to the local community they visit, and 65% of U.S. respondents want to have authentic experiences representative of the local culture they’re visiting.
Keith Sproule, executive director for Abercrombie & Kent (A&K) Philanthropy, said he’s been witnessing firsthand that increased demand for more conscientious vacations, fielding an unprecedented number of requests from travel consultants to include visits to one of A&K’s global philanthropic projects on itineraries.
“It’s a conscious desire to positively impact the destinations where they’re traveling,” Sproule said, offering as an example an American family of four planning to spend a day in Kenya, delivering water filters to schools.
“We partner with an organization called LifeStraw, which makes water filters that remove 99.99% of bacteria and 99.99% of viruses,” Sproule said. “The women who run that activity on behalf of LifeStraw are just terrific animators. People have been sitting at home thinking about what’s important, and as they’re thinking about these bucket-list-type trips, they want to make sure conscious, responsible travel is part of their vacation.”
Trend 11: Racial Diversity in the Travel Industry Must Improve
A&K partnered this summer with the Boys & Girls Clubs of Chicago on a jobs initiative program aimed at introducing inner-city kids to the travel and tourism industry, and Sproule said the project followed internal discussions initiated by A&K leadership, looking to apply the model of some of their overseas philanthropy to domestic issues.
“Historically, the travel industry has not been strong in terms of racial diversity,” Sproule said, noting many in the travel trade have already initiated projects aimed at promoting more gender and racial diversity, and he expects to see many more.
One such effort is the Pathways Project, a Tourism Cares initiative launched in August in partnership with The Travel Corporation, TripSchool and the Media Arts Institute of Alabama to recruit and train historically underrepresented individuals to pursue careers in travel — especially as tour guides.
“Representation matters, and there is not enough of it in our industry,” said Richard Launder, director for The Travel Corporation USA, in a statement. “While this is true at all levels, it is especially so amongst our storytellers, guides, local specialists and travel directors — the faces of travel in this country. We are very proud to work with our other partners on the Pathways Project, an important step toward further change.”
Trend 12: LGBTQ Vacationers Are Still Facing Discrimination
Research data released by Booking.com in August found that 61% of 500 American LGBTQ travelers polled in a June online survey said they’ve experienced some form of discrimination when traveling, and 63% of those respondents said they’ve had less-than-welcoming or uncomfortable experiences at a property where they were staying.
According to those same Booking.com survey results, 70% said they have to consider their safety and well-being as an LGBTQ traveler when picking a destination, and more than 60% believe traveling as part of the LGBTQ community means some destinations are off limits.
Trend 13: Travel Advisors Are Hurting
The American Society of Travel Advisors (ASTA) estimates that prior to the pandemic, there were nearly 15,000 retail travel agency locations in the U.S. employing more than 108,000 people, and another 60,000 self-employed travel advisors working as independent contractors. According to Eben Peck, ASTA’s executive vice president of advocacy, more than 60,000 travel advisors had lost their jobs at the height of the pandemic.
Without any support provided, or pulling back on support that’s already been promised, you’re going to see more experienced, talented people leaving the industry because the business conditions don’t support them having a stable job.
“Some of those folks have been brought back,” Peck said. “But plenty haven’t.”
Recovery has been painfully slow for many travel agencies and advisors, with average revenue levels still down 82% as of July 2021 compared to 2019, according to ASTA member surveys.
“Without any support provided, or pulling back on support that’s already been promised, you’re going to see more experienced, talented people leaving the industry because the business conditions don’t support them having a stable job,” Peck said.
Trend 14: Will the SAVE Act Pass?
ASTA is urging federal lawmakers to pass the Securing Access for Venue Equity (SAVE) Act (H.R. 2120), a bill introduced earlier this year with bipartisan support that would make travel agencies eligible for the Shuttered Venue Operators Grant (SVOG) program, which was established by the Continuing Appropriations Act at the end of 2020.
ASTA is advocating for government support for travel advisors.
Credit: 2021 Lightfield Studios/stock.adobe.comUnder this program, eligible applicants can qualify for grants of up to $10 million, equal to 45% of their 2019 gross revenue, according to Peck.
“We are fully aware the SVOG encountered challenges upon launch earlier this year, that its funding is running low and that the size and scope of future relief legislation is uncertain,” Peck explained. “That said, [the SAVE Act] is the only pending legislation that would provide direct support to travel agencies during our time of need.”
Trend 15: The Fight to Extend the Employee Retention Tax Credit
ASTA has also been busy lobbying lawmakers for an extension of the Employee Retention Tax Credit (ERTC), which provides a refundable tax credit of up to $7,000 per employee, per quarter, for businesses whose revenue has been reduced by at least 20% during the pandemic, as compared to 2019.
Some in Washington, D.C., have, however, been arguing to end the ERTC before its current expiration date of Dec. 31 this year. ASTA, on the other hand, has been urging federal lawmakers to let the ERTC not only run its course through the fourth quarter of 2021, but to also extend the legislation into 2022 and to provide extra benefits on a sliding scale for businesses suffering a 50%-75% loss in 2020 and 2021, according to Peck.
“We did a survey a couple of months ago,” Peck said. “And the question was, ‘If additional support is provided by Congress, I will restore my staffing levels to something close to 2019. Do you agree or disagree?’ The vast majority said they agree.
The sense I get is the workload is there now for agencies and advisors; the bookings are there. It’s just the revenue is not there. Providing a little bit of support to this part of the travel industry now will mean more people back on the payroll and fewer people on unemployment programs.”
