In a recent interview with Bloomberg, Expedia CEO Peter Kern predicted that “Summer 2022 will be the busiest travel season ever”. He explains that it is not just the easing of Covid-19 restrictions and opening of borders that will lead to this outcome, but the combination of the availability of travel destinations with people’s will, or indeed need, to travel that has been building up over the past two years.
We’ve been talking about pent-up demand for a long time, but until now there have been too many restrictions in place for people to do too much with it.
Peter Kern, Expedia CEO
He clarifies that savings constitute a big part of pent-up demand. People have been spending their money on home items and after two years of lockdowns they are ready to spend on experiences, either with cash or by using the loyalty points they have accumulated over the pandemic. Furthermore, he says “People are tired of going to national parks. They want to go to New York and go to a Broadway show”, explaining that he expects culturally rich cities like Paris or Florence to face increased demand, despite US authorities advising against travelling to Europe.
He continues saying that the high prices inevitably brought by the high demand will not deter travellers. “Airlines are expecting to be back to historic levels by August”, which combined with the increasing fuel prices will certainly mean plane tickets will get more expensive.
And yes, prices will be high. But at this point, I think people are willing to pay whatever the hell it takes to get away and go to a place they want to go.
Peter Kern, Expedia CEO
His optimistic forecast is shared by other experts in the tourism industry. The World Travel & Tourism Council updated its economic modelling in February, estimating that US travel and tourism would exceed pre-pandemic levels by 6.2%, accounting for almost $2 trillion GDP. Across the pond, the European Travel Commission’s data shows that 77% of Europeans plan to travel this summer. EUROCONTROL also foresees an 84% recovery of pre-pandemic air traffic levels this year. Misty Ewing Belles, vice president of Virtuoso, also told Bloomberg that people have started to book ahead again, with summer reservations being on the rise, as opposed to the last-minute planning trend that was necessary during the pandemic.
Kern insists that destinations that have been completely closed over the past two years, like Australia and India, will see a lot of tourists this year, but also, on the other hand, people are looking to get out of there, data from Expedia showing that almost a third of Australians have planned at least 3 trips for this year.
He also highlights the fact that the new-found flexibility in work locations also allows people to travel more. With a lot of companies keeping their work from home policies even now that the measure is no longer mandatory, employees will be able to travel more: “You could go through that whole thesis about how people are working from anywhere and untethering from the traditional calendar”.
But in the summertime kids are out of school and the weather is good, so everybody goes everywhere – summer will always be summer.
Peter Kern, Expedia CEO
Lastly, he admits that in some areas recovery will be slower, for example in Asia and Latin America where the number of cases is higher and lockdowns are stricter. He also says that cruising businesses will have a harder time recovering than airlines or hotels. And, even though families with children under 5 and people with immunodeficiencies will be more cautious, he says they will just “rent a VRBO (Vacation Rentals by Owner) at the beach instead of going to Paris and walking around. But, you know, people are eager to go somewhere. So I think people will find a way to get around”.
