Despite some ominous economic signs on the horizon, the researchers at travel marketing firm MMGY Global are cautiously optimistic about the travel industry in the year ahead. Chris Davidson, EVP, MMGY Travel Intelligence, shared the findings of the organization’s new Portrait of American Travelers 2019-2020 survey with Travel Agent and other media at a recent presentation in New York.
“Overall there’s a lot of optimism about what’s happening in the industry right now, but there’s a little bit of tempering on the horizon,” Davidson says of the findings in the survey, which polled 2,971 U.S. adults who have taken at least one overnight trip of 75 miles or more from home during the previous 12 months and who have a household income of $50,000 or more.
The usage of travel advisors is holding steady, Davidson says.
Approximately 16 percent of respondents in this year’s report had used a travel agent for at least one vacation in the past 12 months, which is about on par with the past few years; since 2015, the usage of travel agents in the Portrait of American Travelers has hovered between 16 and 19 percent.
“It’s been pretty consistent for the past four to five years,” Davidson says.
As in previous years, Millennials are leading the way in travel agent usage, with 24 percent of Millennials having used a travel agent for at least one vacation in the past 12 months. Among Gen Xers, the figure is only 10 percent, and among Baby Boomers, it is 12 percent.
Looking ahead, the overall percentage of those who intend to use a travel agent for a vacation during the next two years is slightly higher, at 19 percent. That rises to 24 percent among Millennials and falls to 15 and 16 percent among Gen Xers and Boomers, respectively.
As part of the report, MMGY surveyed a panel of economists on their view of the odds of an economic recession within the next 12 months. During 2018, those odds spiked, just as they did before the 2001 and 2008 economic recessions.
Recessions are cyclical, Davidson noted. As a result, the question of “Is a recession going to happen?” is largely a matter of timing. “We know there will be a travel recession, the question is when,” Davidson says.
That said, for the year ahead, the report contains many signs for optimism in the travel industry, particularly in terms of average vacation spending. In the 2019 report, respondents indicated that they intend to spend an average of $5,025 on vacations this year, which is about on par with what they actually spent last year: $5,038. At the same time, the amount travelers actually spent last year, $5,038, was significantly higher than what they predicted they would spend, $4,281. That means that this year’s actual spending could turn out to be even higher.
Breaking it down by demographics, the biggest spending growth is forecast among Gen Xers and Baby Boomers. “Millennials are relatively tempered, but Gen X is expected to spend about 20 percent more this year, and Boomers are looking to spend about 30 percent more,” says Davidson.
U.S. consumers are still looking to travel, too, according to the report. The Traveler Sentiment Index, which aims to measure consumers’ intentions to travel, remains at 113, slightly lower than in previous years but still positive.
“So you’re seeing a little bit of softening, but overall the travel economy is still very, very strong,” says Davidson.