Growth in the travel industry is continuing to slow, but there’s no reason to panic, Steve Cohen, SVP of travel insights at travel marketing firm MMGY Global, told Travel Agent at a launch event for the company’s latest Portrait of American Travelers study. The nationally representative survey samples 2,902 U.S. adults who have taken at least one overnight trip of 75 miles or more from home during the past 12 months and who have an annual household income of at least $50,000.
“We are starting to see a bit of a slowdown,” Cohen said. After a record-setting year for leisure travel in 2016, 2018 – like 2017 before it – will be relatively flat in terms of travel spending. The overall number of trips will decline as 30 percent of travelers plan to take fewer vacations; however, spending on individual vacations could grow as customers take longer getaways, leading to a flat spending picture overall.
“Every year since 2007 we’ve seen positive vacation intention,” Cohen said. In 2018, however, the number of trips travelers say they intend to take over the next 12 months declined by nine points. At the same time, Cohen says that, as yet, “I wouldn’t say we raise any red flags.”
Usage of travel agents, too, looks to be flat this year, after growing for the past few years.
“There’s no cause for alarm,” Cohen said, “it’s just not growing at the same rate.”
Cohen attributed the slowdown in travel agent growth to a lack of recognizable travel agent brands.
“No one owns the travel agent space right now,” Cohen said. “Once someone owns it, we expect the use will go up. Agents need that brand promise behind them.” That, Cohen said, could help to convert more people who haven’t considered using a travel agent into those who do.
Additionally, despite the flat forecast for the year overall, summer travel is shaping up to remain strong.
"While we're forecasting a soft year for travel, the second quarter remains incredibly strong," Cohen said. The number of travelers who intend to take a summer vacation stands at 67 percent in this year's survey, up from 60 percent the prior year.
Other trends to watch? Millennial families will continue to be a growth market in 2018 – and it’s important not to lump this category in with other Millennial travelers.
“The oldest Millennial right now is 38, and the youngest is 18,” Cohen said. “If you look at the difference in how you consume travel, or anything, between 18 and 38, I’d argue that it’s not nearly the same.”
According to this year’s report, Millennial families are the only life stage among that demographic that intends to spend more on vacations in the coming year than in the previous year. They are larger than other Millennial life stages – representing 16 percent of all American leisure travelers, as opposed to couples and singles, who each represent only 8 percent – and Millennial families intend to spend 16 percent more than couples and 31 percent more than singles.
Wellness travel will continue to be another growing trend this year. The worldwide wellness travel market increased to $678.5 billion last year, and it’s forecast to grow another 15 percent this year.
Cohen’s main takeaway for travel agents? While growth has flattened this year, it’s too early to call it a trend.
“Don’t panic,” Cohen said. “The numbers are a little bit down, but that doesn’t mean that the bottom is dropping out.”
Visit mmgyglobal.com for more on the Portrait of American Travelers.