Hotel performance data shows that tourism is largely ramping up globally due to eased travel restrictions, improved COVID-19 perceptions and strong underlying demand for travel. This trend is corroborated when assessing the latest consumer research findings gathered by STR in May 2022 among a sample of some 1,300 global travelers.
But how much have impressions of COVID-19 shifted in recent months and how do consumers cogitate on travel with challenges such as growing financial pressures and geopolitical uncertainty?
COVID-19 Concerns Are Shrinking but They Haven’t Gone Away
During the pandemic, STR has monitored the influence of COVID-19 as a reason for not booking or undertaking travel.
The latest data shows a continuation of the existing trend as consumers who had not booked travel in recent months apportioned less significance to COVID-19. The average influence score was 3.36 out of 5 compared with 3.64 in February 2022 and scores of above 4 out of 5 in previous research. These findings signal improved perceptions regarding the impact of the virus on travel. However, the average score of 3 out of 5 indicates that COVID-19 remains a noteworthy barrier for planning and undertaking travel among some consumers.
Travel Sentiment Has Improved Significantly
Propensity to travel in the current COVID-19 climate, defined as the likelihood to travel now compared with before the pandemic, remained in negative territory as consumers continue to perceive travel as less appealing overall in an era adapting to COVID-19.
However, compared with February 2022 findings, there was a marked uptick in sentiment. Net propensity to travel domestically was down 4% — versus down 20% in February — and net propensity to travel internationally was down 31% — versus down 56% in February.
These results underline continued struggles for the industry due to COVID-19. However, they also highlight a potential tipping point as the tide of opinion appears to have changed significantly compared with earlier in the year.
Rising Costs Are the Biggest Barrier to Travel Now
As global economies grapple with increasing inflationary pressures, which are contributing to erode real incomes, it is perhaps not surprising to see pronounced cost sensitivities among consumers.
The cost of travel was considered the highest barrier to travel overall in the next 12 months, mentioned by nearly 60% of all respondents. Among U.K. consumers, the pinch of increasing household costs — at a time of soaring energy and fuel prices and concerns regarding personal finances — particularly stood out. Meanwhile, for North Americans, perceived barriers related to COVID-19 were slightly more prominent — with 46% of those surveyed listing it as a travel concern, compared with 40% among Brits and Europeans. That is likely linked to continued testing requirements for inbound flights to the U.S., though that requirement was lifted June 12.
Financial considerations dominated the list of barriers. Uncertainty about the future economic situation also figured in the top seven barriers evaluated, mentioned by 30% of respondents overall and slightly fewer North Americans (26%). In addition to financial barriers and COVID-19 challenges, concerns about the war in Ukraine were cited by 38% of Europeans, 35% of North Americans and 31% of Brits, and could affect travel decisions in the next 12 months.
In the short to medium term, there could be a clash of conflicting forces as pent-up demand and improved sentiment toward travel meet global factors, particularly changing economic situations. The growth path for tourism could be dictated by the extent to which financial pressures tighten or loosen in the coming months. Strong underlying demand for travel is likely to continue among many, especially higher-earning consumers. However, travel demand may be displaced among others who are more sensitive to economic uncertainty and depreciation in real income.
Sean Morgan is director of product analytics and insights for STR, CoStar Group's hospitality analytics division.
This article represents an interpretation of data collected by STR, parent company of HNN. Please feel free to contact an editor with any questions or concerns. For more analysis of STR data, visit the data insights blog on STR.com.