When Covid-19 travel restrictions started being lifted around the world, a new phenomenon appeared in the travel and tourism industry – revenge travel. After having minimum spending for almost three years during the pandemic and not really enjoying any “proper” holidays, the immediate effect of countries reopening birders has been people travelling more and spending more on holidays than before the lockdowns to make up for lost time.
The pent-up demand combined with the global inflation brought on by skyrocketing gas prices after Russia’s invasion of Ukraine have led to pricier holidays around the world. Despite the cost, revenge travel seemed to remain strong.
In August 2022, 68% of Brits were determined to travel despite inflation and rising fuel costs, a sentiment which continued into this year, Nationwide Building Society’s Spending Report showing in March that travelling was prioritised over other spending sectors. More recently, in July, an Accenture Consumer Pulse Survey showed that, despite economic uncertainty, consumers were not only planning leisure trips but intended to increase their holiday budget, as travel was seen as “an essential part of life“.
At the same time, the first signs of financial pressures hindering travel plans were starting to show, a study from the European Travel Commission showing that intent to travel in the second half of the year decreased 4% in 2023 compared to 2022.
“By all accounts, 2023 has been a strong year for the travel industry, with leisure travel returning to pre-pandemic levels over the busy summer months. But while travellers were willing to splurge a bit to take their beloved summer vacations, high prices threaten to bring about a slower-than usual shoulder season”, reads a recent report by Morning Consult.
That’s not to say that travel will decline significantly again, but … in short, the majority of those who were waiting to take their ‘revenge trips’ have already done so.Lindsey Roeschke, Lead Travel & Hospitality Analyst at Morning Consult
The State of Travel & Hospitality report follows the evolution of intention to travel by combining data from surveys conducted from October 2021 to August 2023 among roughly 2,200 US adults per month with surveys conducted between January 2021 and July 2023 among approximately 14,000 total adults in Argentina, Australia, Brazil, Canada, China, Colombia, France, Germany, India, Italy, Japan, Mexico, Russia, South Korea, Spain, the UK and the US.
The report reveals that intent to travel has decreased the most in Europe, while, on the other hand, it has slightly increased in China, Mexico and Japan. However, despite the overall increase in intent to travel in China, the report notes that sharp decreases were noticed to specific destinations, like North America (23% less than in 2022), South Korea (-12%) and Japan (-9%).
“The drop in China is particularly concerning”, the report states. “While reasons are a mix of logistical (flight are scarce and expensive) and geopolitical (tensions are high between the US and Chinese governments), the decline is a blow to destinations that were hoping for a more robust recovery.”
Travel is for the most part a luxury good and among the first thing to be cut back when times get tougher.Oxford Economics
Moreover, although Chinese consumers arrived later to the revenge travel trend as restrictions only eased up at the beginning of this year, a recent report by Oxford Economics says Chinese travellers are also “rapidly losing their gusto after the initial reopening spending spurt. High unemployment, negative wealth effects from the troubled property sector and weak wage growth do not make a strong backdrop for splashing out on foreign holidays.”
“The boost purely from pent-up demand may soon run its course”, Oxford Economics adds. “Consumers in advanced economies, particularly the US, will likely moderate their spending plans in the face of an uncertain economic environment. Others may follow as their home economies catch a cold. (…) We are sticking with our call that the US will enter recession around the turn of the year.”
“Travel is for the most part a luxury good and among the first thing to be cut back when times get tougher”, Oxford Economics concludes.