The other day, after hearing a news story about the problems with the Boeing 737 Max 8, my son asked me what I consider the biggest threat to the travel industry. Basically, he wanted to know what keeps people from traveling.
It’s a tough question. Accidents, computer glitches and other chaos-causing malfunctions can be very disruptive but are often short-lived. Terrorist events, weather-related problems, natural disasters and pandemics certainly affect travel, but they are usually geographically specific.
I think the greatest long-term threat to the travel industry is economic. Major financial downturns, such as the one we experienced in the last decade, can be long-lasting and widespread, as well as have major consequences. People don’t travel when they are unemployed and worried about their mortgage.
Sadly, we don’t need a full financial collapse to see how economics can affect travel. The growing disparity between the rich and the poor in this country is a major threat to our industry. When the top 1 percent in the U.S. makes 40 times more than the bottom 90 percent — and with that gap steadily growing — it’s not hard to understand how the customer base for travel is at risk of shrinking. We can greatly improve business by growing disposable income for more people. I’m not suggesting we discourage the top earners from spending on travel, but in order to grow our industry, we need to add to the number of people who can afford to take a vacation — instead of just focusing on a relatively small pool of super-rich customers.
This issue’s cover story is focused on luxury travel in South America (“South American Splendor,” page 16). While advisors need to have options for their high-end clients, it’s important to look beyond the biggest spenders and reach out to a larger demographic. If we can do more to address the expanding income gap in the U.S., we can prevent our industry from having to rely solely on the whims of a tiny group of travelers.
