This summer will witness the clash of two major forces that affect the travel industry: post-lockdown “revenge traveling” and record inflation, which will force households to plan more carefully. The desire to go on a summer vacation is going to win, but inflation will impact what summer travel looks like.

These are the truths, and not lies, about the 2022 summer vacation season.

Truth #1: People will travel

People are happy to vacation again after more than two years without travel restrictions. The research into consumers’ vacation plans and priorities found that 88% of consumers intend to travel sometime in 2022. It may come as no surprise that vacations are attractive escapes from stressors like the economy and pandemic. Relaxation is key. 65% of the year’s travellers cite relaxation as their main reason for traveling. Travel providers must offer seamless and relaxing experiences that are worth the higher cost, given the inflationary pressures.

Truth #2: Travelers will spend

It is up to you to decide what. We asked travelers in September 2021 about their vacation spending plans. Nearly half of them said that they expected to spend more on vacations in 2022 than the previous pandemic. Because travel is more expensive, this number will likely rise. Some sectors could lose out. This means that people will spend more on travel but it won’t go towards extravagant spending. It’s going towards simply getting out there in the first place.

While travel companies recognize that travelers will reduce costs, each sector of the industry believes that this will not be at their expense. According to airlines, travelers will cut back on lodging. Hoteliers believe that guests will eat less at restaurants, while activity providers claim that people will choose to drive to local attractions rather than fly to distant destinations. All of them are likely to be right. It is likely that travelers will choose to avoid the most expensive travel costs and cut back elsewhere. They will choose cheaper lodging if they must fly. They may choose to drive to a resort if they are set on it. Companies will need to clearly explain how their service enhances a trip (like being more relaxing), so that less money goes towards them.

Truth #3: Low airfares are back in focus

Pandemics gave passengers the opportunity to evaluate air travel holistically. This was a departure from the race to find the lowest airfare, which was the norm in the past. Mintel research shows that only half of passengers choose fare prices as their top three criteria for choosing a carrier. Travelers who want to fly this summer are likely to choose Ultra Low-Cost Carriers and basic economy fares, and turn in their loyalty points. While airlines can still enjoy the popularity right now, it is important to remember that once inflation has subsided, things such as schedule flexibility and comfort in flight will be back in consideration.

Truth #4: Road trips will look not like they did during pandemic

Road trips are still possible, but they will not look like the pandemic-era trips. They’re likely to be short. According to Mintel, 66% of recent road trips were to destinations between 500 and 1,000 miles. Attractions looking to attract travelers’ attention will have a difficult time as 38% of pandemic-related road trips stopped at their final destination (save gas and potty breaks). Leisure stops will be harder to find this summer, as inflation is tightening our budgets.

The fact that RV sales soared during the pandemic is also at play. Most of these new owners still own their vehicles and are willing to pay less in the long-term. The increase in road trips to campgrounds, state and national parks, outdoor recreational areas, and camping sites that we witnessed in 2020-21 is likely to continue this summer. If a travel agency did well with road trippers over the past two years they are likely to do well again this summer.

Truth #5: Hoteliers should expect to book more short-term reservations

Did you catch the part about travelers trying to save money? Travelers will be searching for ways to save money, as fuel is an expensive option. Smart travelers will wait for hotels to lower rates in order to sell rooms. They can also use apps such as HotelTonight to search for last-minute deals. This is a continuation of the pattern that was seen during the pandemic. According to our research on hotel booking, the largest shift in hotel booking windows between 2019-2022 was a five percentage point increase of hotel reservations made within 48 hours of check in (from 9% up to 14% of bookings). This was despite all the precautions travelers took to ensure they were choosing the best lodging. This trend continues, highlighting how flexible hotel booking and reservation systems must be in order to accommodate last-minute travellers.

What we think

People are too busy and too stressed to allow record inflation to stop them from taking vacations. However, they will be creative with their travel budgets and create winners and losers across sectors. The savings potential will last longer than inflation and providers should be prepared to show their value in the future.