After years of uncertainty, travel is finally back in business! According to the UNWTO, international tourism arrivals could reach 80-95% of pre-pandemic levels this year. This means that all regions of the world are finally bouncing back, including Asia and the Pacific, which had longer lockdowns and COVID restrictions than most other locations. While these figures look extremely promising, it is really important that tour operators understand the tourism trends of 2023 so that they can capitalize on this increase in visitors.
This may be especially important in a year with potentially unprecedented inflation levels pushing consumer prices higher, combined with the ongoing pain of the Great Resignation, which has left airlines and hotels woefully understaffed. To help you make sense of it all and what it means for your business, we have compiled a list of the biggest tourism trends expected in 2023 and how they may impact you as a tour operator.
Tourism Trends 2023: The Impact of Price-Driven Travel
One of the biggest forces impacting the travel industry this year is the economy. Global inflation rates are expected to remain higher than usual, and fears of an impending recession and cost-of-living crisis are already affecting people in many countries in Europe and the Americas. This means that most customers are pulling back on the amount of money they would normally spend, and price-driven travel is likely to be the most significant trend in 2023.
Although the impact of inflation on tourism is obvious, the good news is that while people are looking for ways to reduce their travel spend, it doesn’t necessarily mean that people are planning on going on fewer holidays. According to Skyscanner’s 2023 Tourism Trends report, around 46% of tourists plan to take the same number of vacations in 2023 as they did in 2022, and around ⅓ of people desire to take even more trips next year. However, rising costs and inflation are impacting where and how they spend their money, and most respondents said they are looking to visit cheaper locations compared to the past.
This trend is in line with a recent survey we conducted among tour operators to understand their hopes and fears for 2023. We found that 66% of respondents believe inflation will have a noticeable but not disruptive impact on their business, while 19% think it will have a profound effect. Fortunately, we’ve compiled a long list of things professionals in the travel industry can do to sell more during a recession.With our suggestions, you will be able to keep profits up and costs down.
Tourism Trends 2023: Changes in Traveler Demographics
In 2022, we saw the rise of “revenge travel,” where people made up for not being able to go on a vacation for a few years, causing everything from airfares to hotel rates to skyrocket. Tourism trends in 2023 point more toward a shift to conscious travel, where tourists look at their trips in a more holistic way. This includes traveling during off-peak seasons or to emerging destinations, making informed decisions about the businesses they support while traveling, and finding sustainable transportation methods.
The digital nomads and remote workers who helped support struggling tourism industry in destinations around the world during the COVID pandemic will continue to demand longer-term accommodations. This trend is expected to continue in the coming years as people continue to enjoy the benefits of remote work and countries around the world begin to offer digital nomad visas.
Meanwhile, the number of young, affluent travelers seeking unique experiences and embracing luxury as a lifestyle is expected to increase, as is the number of “solo and self-focused” travelers seeking experiences centered on wellness and mental health. Many of these solo travelers are women over the age of 55, and a large percentage of them choose to join a tour when traveling to countries they don’t feel comfortable visiting on their own.
Most importantly, travel has continued to become more inclusive, with a growing number of LGBTQ and POC travelers. Unfortunately, the fear of discrimination still exists. Creating a marketing campaign that includes marginalized travelers as well as a welcoming environment for all is the best way to target these audiences.
Across all these demographics, many people no longer view travel as a discretionary expense, but rather as an essential part of their lives. These types of tourists represent a noticeable shift from traditional tourist segments in the way they use their money, the amount of time they spend in a destination, and the expectations they have for the overall experience.
If you want to tap into these markets, it is imperative that you take steps to welcome and accommodate their unique needs. One way to do this is by offering a buy now, pay later payment (BNPL) method that allows guests to make purchases in equal installments. There are currently 360 million BNPL users worldwide, which are expected to grow to 900 million by the end of 2027. This payment method is popular with younger tourists and can be highly beneficial to travel companies, making high-value products more accessible to a broader demographic and encouraging them to book vacations they might not otherwise be able to afford.
The Rise of Emerging Destinations and Changing Travel Styles
In 2023, people are looking for destinations where they can stay longer while spending less than in the past. As travel styles change and people seek authentic and sustainable experiences at a more competitive price, they are increasingly turning to emerging destinations.
Locations such as Georgia, Turkey, Colombia, Bulgaria, El Salvador and Guatemala have benefited from this increase in price-conscious tourists. Meanwhile, economically volatile countries like Argentina and Brazil have suddenly become much more affordable, making them attractive to remote workers and digital nomads. Demand for “traditional” Western European destinations remains strong, with countries such as Portugal, Hungary and Croatia gaining in popularity. As we all know, this shift coincides with increased awareness and demand for sustainable tourism and ecotourism products.
Tourism Trends 2023: The Importance of Sustainable Tourism
The tourism industry has undoubtedly had a negative impact on both the natural environment and local communities. However, people are becoming increasingly aware of the impact of their travel decisions. It is becoming more and more important for destinations and businesses to offer sustainable travel options to consumers or risk losing these potential visitors to their competitors.
According to the UNWTO, sustainable tourism is “tourism that takes full account of its current and future economic, social and environmental impacts, addressing the needs of visitors, the industry, the environment, and host communities”. Over the past decade, sustainability has gone from a buzzword that both consumers and providers pay lip service to, but few actually take steps to support, to something that people actively seek and businesses offer.
Sustainable tourism has become an essential part of our industry, and tour operators are at the forefront of this movement. Not only adopting sustainable business practices help protect the environment in which you work and potentially live, but it can also make sense from a business perspective, as being “green” can also attract new customers.
In a recent Expedia survey, 90% of consumers said they look for sustainable options when vacationing. This means there is significant demand for sustainable travel providers. Furthermore, Euromonitor International reports that “73.8% of travel executives see increased interest in sustainability from their customers in 2022.” Perhaps more interestingly for the tour operators themselves, 57.3% of these executives noted that people are often willing to pay more for a tour or activity that they believe follows sustainable practices.
As an added bonus, people who want to travel sustainably are also inclined to visit off-the-beaten-path destinations for a more authentic and sustainable experience, which can be an incredible opportunity for companies operating in emerging destinations.
The Link Between Climate Change and Tourism
All around the world, mass tourism has been linked to environmental degradation, the depletion of natural resources and an increase in pollution. As tourists become more concerned about the impact of travel on both the natural environment and the communities with which they interact, the need for destinations and travel companies to adopt “green” policies is becoming more apparent.
Many destinations have chosen to implement various kinds of taxes to help offset the negative impacts of overtourism, while travel companies and hotels have looked at ways to reduce emissions associated with overnight stays and food consumption. Tour operators can easily do their part by booking direct flights for travelers, incorporating overland options whenever possible, promoting slow travel, and adopting new technologies that help reduce waste.
Tourism Trends 2023: Using Technology to Enhance the Travel Experiences
You’ve probably heard about the many ways technology is transforming the travel industry. Technology companies like Regiondo offer booking systems that make it much easier to market and manage your trips, while ChatGPT, an AI language model that can be used to generate human-like responses to prompts, makes it easier to create content for your website. In addition, the demand for short-term rentals among business travelers, digital nomads and vacationers continues to grow as new distribution platforms enter the market and hotels continue to adopt technologies to offer more contactless services.
All of these changes can open new doors for you to market and sell your tours and activities as travelers become more reliant on travel technology and travel apps at all stages of travel, including planning, booking, and taking their trips. As a result, you can more easily reach your target markets without having to invest heavily in traditional advertising by simply offering your products on a variety of platforms. Although updating multiple apps and websites can be time consuming, Regiondo offers software solutions that can help you connect with leading OTAs, helping you save time and money.
The latest shifts in tourist demographics and the rise of price-driven travel can feel like trying to hit a moving target. However, in many ways, these trends are all interconnected. For this reason, even small changes to your product offerings and price points can have a far-reaching impact on your overall business.
For example, offering a high-value tour focusing on sustainable travel in an emerging destination can help you reach solo adventurers who are looking for environmentally-conscious experiences. Not only competition in that market will be much lower than in other destinations, but your profit margins are likely to be higher. Looking for opportunities like this can help you stand out amongst your competitors and encourages repeat business from satisfied customers.
While these are considered the most recent travel trends, the emphasis on sustainable travel and emerging destinations is unlikely to change as we move into the future. Focusing on these aspects can not only help you gain more customers now but it can also help you build a strong business model moving forward. Similarly, investing in improving your digital infrastructure will help you get more bookings for years to come, not just in 2023. If you want to learn more about Regiondo, the leading booking system for tour operators and activity suppliers, feel free to book a demo with one of our consultants.