Rising prices for travel yet to curb wanderlust
The post-pandemic travel boom and the high ticket prices that come with it show no signs of slowing well into next year, despite economic uncertainty and dwindling household savings.
While questions linger about how much longer consumers will continue to indulge, airlines, hotels and analysts say travel has remained a top priority instead of the "nice to have" purchase as in years past.
International travel reached around 90% of pre-pandemic levels this year, according to the International Air Transport Association. The rebound was led by visitors to Southern Europe from cooler climates despite soaring temperatures and included swaths of American tourists flying overseas.
TUI (TUI1n.DE), one of the world's biggest holiday firms, on Wednesday reported its first post-pandemic net profit on the back of robust bookings and travel demand in the three months to the end of June.
"In the wake of the pandemic, a number of folks have reset their priorities and have focused on splurging on travel," said Dan McKone, a senior partner at strategy consultancy L.E.K. Consulting.
That desire may even strengthen next year, according to travel tech firm Amadeus, whose recent survey showed that 47% of respondents said international travel was a high-priority discretionary spending category for 2023 and 2024, compared with 42% who ranked it as such the previous year. Amadeus sampled travelers from Britain, France, the United States, Germany and Singapore.
Those trends lifted quarterly earnings of travel companies, with cruise operators like Royal Caribbean (RCL.N) reporting record results in recent weeks. Travel operators Booking Holdings (BKNG.O) and Airbnb (ABNB.O) said revenue was up 27% and 18%, respectively, and air carrier Delta (DAL.N) and hotel giant Marriott International (MAR.O) forecast strong future demand.
