Bring your shades. The future looks bright

Consumers are on the move again, requiring travel providers to think about how best to balance supply with demand in the wake of nuanced consumer considerations: Despite the propensity for price to dominate travel purchase decisions, consumers also have health and safety concerns. 

Higher income households have seen an increase in savings. Combined with increased vaccination rates, this bodes well for travel. In fact, our survey indicates that consumers are willing to spend more money (13%) for nicer accommodations (28%) and for longer periods of time (24%) on future travel. Moreover, with borders starting to open up to vaccinated travelers, more of them are starting to plan international trips: almost 25% are planning trips to Europe or the Caribbean. 

Meanwhile, some consumers remain tentative: 24% told us their leisure travel plans won’t match pre-pandemic levels until at least 2023, and 14% plan to spend less on their next vacation than they did before the pandemic. 

Cruises are not high on travel lists: 80% said they’re neutral or unlikely to take a cruise in the next 12 months, an increase from both our previous surveys in 2020. Exceptions are 18-to-24-year-old deal-seekers and high-income consumers (household income over $250,000).

Once consumers have satisfied the urge to travel with spring and summer trips, will travel slow down again? Consumers may well base holiday travel decisions on their experiences in the coming months.

Key takeaways

To gain market share by appealing to willing travelers, look to eager-to-travel customer segments, as well as how best to target them. Leveraging the right customer tools and insights platforms can help effectively match demand with media spending to optimize ROI.

By a wide margin, travelers who have taken at least one trip since the onset of the pandemic enthusiastically recommend it to others: More than 70% would recommend flying and more than 60% would recommend overnight stays to those who have not yet traveled. Meanwhile, a small group (10%) of those who have already traveled are unwilling to recommend it to others. 

It comes as no surprise, then, that these reluctant travelers rated every type of social gathering as riskier than the travel enthusiasts. They were twice as likely to avoid gatherings of 10 or more people and consistently a year behind the enthusiasts when estimating resumption of pre-pandemic travel habits. A major reason was their first travel experience after the onset of the pandemic; this group was decidedly not any more comfortable traveling after their first flight or overnight stay.

That’s not to say the reluctant travelers won’t catch up soon, now that proven vaccines are available and case counts are down. Those who haven’t traveled at all might well represent even more demand in the months ahead since they’ve been holed up at home for much of the past year.

Key takeaways

Our previous study revealed the importance of the first trip that travelers take after the onset of the pandemic: That first trip alleviated all health concerns for more than 50% of travelers. For many travelers, the first travel experience will determine future patterns, thus amplifying each moment spent engaging with your brand. Empower front-line staff, your most powerful personalization option, to engage with travelers and provide the comfort and reassurance they seek. Employ analytics to uncover and reward customers who are encouraging others to travel.

While consumers are eager to travel, they may not go back to their pre-pandemic providers. When we surveyed consumers last summer, some 40% told us they would likely switch loyalties. That trend is now taking root: One in three travelers followed through when it came to trying a brand other than the one currently holding their highest loyalty program status. 85% of them told us they’re likely to stay with the airline they switched to while 76% said the same about hotels.

Why are these travelers switching brands? 60% of respondents said the most important reason is better pricing, offers or packages.

The data tell a different—and more nuanced—story for top-tier members of loyalty programs: 

• Almost half (46%) of top-tier members say loyalty programs are even more important now than they were before the pandemic—more so by far than all membership tiers.

• Highest-tier loyalty members are also the most likely to switch brands, a trend we first saw in the last installment of our survey. In fact, our current survey revealed that they are all open to switching.

• Contrary to the general traveling public, the highest-tiered loyalty members are switching for other noteworthy reasons, the greatest of which is the opportunity to experience a new brand, their benefits, and experiences.

For loyalty program managers, there is some good news. Loyalty balances have been growing over the past year, with 30% of members planning to redeem those balances on imminent future travel. Some 20% plan to continue saving points or miles to redeem for greater travel rewards later. Meanwhile, roughly a third (30%) say their points don’t provide the appropriate value to redeem at this time and 20% plan to redeem points for non-travel items or transfer them to a partner.

Key takeaways

The opportunity exists: Protect valued loyalty members and entice others away from competing brands. Consumers have told us in no uncertain terms what matters most to them—price. But that’s not all. They also want flexibility and new experiences after a year of having had their lives upended. While revenue recovery has been top of mind for travel brands during post-pandemic recovery, a more robust revenue opportunity lies ahead.