The travel industry has experienced a remarkable year, with soaring leisure volume, packed airplanes, and high hotel bookings, according to a report titled “2023 Holiday Travel Trends” by Morning Consult. However, as the year-end peak travel season approaches, consumers are displaying increased price sensitivity towards flight, hotel, and vacation rental bookings.
The report reveals that more people are utilizing rewards and points earned from hotels, airlines, and credit cards to subsidize their trips, compared to the previous year’s holiday travel. This change indicates a shift towards cost-conscious decision-making by travelers. Tim Hentschel, the CEO of HotelPlanner, emphasizes that despite the industry’s overall health and record revenues in airlines and hotels, luxury travel is particularly booming due to high net worth individuals having more disposable income. Consequently, the five-star market is expanding rapidly, while demand for one- and two-star hotels has decreased.
Hentschel advises travelers to consider visiting secondary spots, which not only adds excitement to their vacations but also leads to substantial savings. These hidden gems offer unique experiences and often have lower prices compared to mainstream destinations. As an example, Hentschel mentions Trisul, Norway, a ski vacation destination that is less renowned than the Alps but gaining popularity. He humorously adds that disclosing the name on TV might attract more visitors, compelling him to find another secondary ski destination.
American travelers are planning to travel more this winter than in 2022, but budgeting plays a critical role in their decision-making. A November survey by Vacasa reveals that 88% of travelers have adjusted their travel plans to save money. The most common money-saving strategies include driving instead of flying, keeping an eye out for special deals, and reducing expenses at the destination. The survey also highlights a shift towards rental homes, with nearly one-third of travelers opting for them. The majority believes that rental homes offer better value and more space. Additionally, driving remains the preferred mode of transportation for over two-thirds of travelers.
For those choosing to fly, it is advisable to avoid booking air travel on December 26th. According to the travel app Hopper, this day is expected to be the most expensive for both domestic and international return flights during the Christmas period. Consequently, travelers should explore alternative travel dates to secure better deals on airfare.
Despite the travel industry’s stellar performance throughout the year, the approaching year-end peak travel season highlights consumers’ increased price sensitivity. The utilization of rewards and points earned from hotels, airlines, and credit cards indicates a growing trend of cost-conscious decision-making among travelers. To save money, travelers are advised to explore lesser-known destinations and consider rental homes for better value and more space. Finally, mindful booking practices, such as avoiding peak travel dates, can lead to significant savings. While the industry thrives, adapting to changing consumer preferences and economic circumstances remains crucial for continued success.