Summer Travel Will Look Different This Year. How So? | Behind the Numbers
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Hey gang, it's Monday, June 16th. Jenny, Rachel and listeners, welcome to Behind the Numbers, the marketing video podcast made possible by Synth. This is the show that helps you stay up to date with the worlds of media, marketing and technology in about 20 minutes every Monday and Friday. Thank you for joining us. I'm Marcus and today I'm joined by two folks, both calling New York home. We have our VP of all research, Jennifer Pearson. Thanks for having me. Of course. And we have one of our briefings analysts, Rachel Wolfe. Hey,

Hey Marcus, great to be here. Hello. Today's fact. So I quickly, I'd mentioned this one on a previous episode. I'm not recycling material, but I did quickly mention this in passing, but I dug a bit more into this. So a single teaspoon of honey represents the life work of 12 bees.

I know Jenny's face says it all. Rachel's like, yeah, that sounds about right. The life work, Rachel. Have some sympathy. I was just thinking how many bees, like the output of bees have I consumed in my lifetime? Exactly. Yeah. Millions of bees. Yep. Bees need to visit 2000 flowers to make just one teaspoon of honey.

Hard workers. They are. Unlike people. Here's another fact, though. According to the World Wildlife Fund, close to 90%, so all wild plants, and 75% of leading global crops depend on animal pollination. One in every three mouthfuls of food, one in three depends on pollinators such as bees. Crops that depend on pollination are five times more valuable than those that do not pollinate.

Also, the Bee Movie was a great film. I really want to talk about. We don't have time though. Today's real topic: The most interesting ways summer travel will be different in 2025. From last year. It's gonna be very different from 200 years ago. Okay? Not really. Rachel, six months ago you were writing headlines like "Record travel demand expected in 2025 as consumers prioritize experiences."

how times have changed. You just put out a piece titled "U.S. Consumers Rethink Travel Plans Amid Uncertainty." Things had been going well. You know that U.S. passenger volumes were at record highs in 2024, up 17% from two years before that, according to the TSA. But in one of your recent articles, you were noting that just over half of Americans said current economic conditions, tariffs, rising prices, etc., have affected their travel plans

for the year according to recent Harris poll survey for the points guy. So I thought we could put together a list, a consensus list of the three most interesting ways summer travel will be different in 2025. So Rachel and Jenny are going to try to convince myself and the listeners that their reasons should be on the consensus list. So Jenny, you can go first. What is one way that summer travel will be different this year that has to make the list?

has to make the list, I think, is the uncertainty. So I don't want to steal Rachel's thunder with the article she just wrote. But I do think that a lot of the surveys we've been seeing are that US adults are just not certain what they're going to do this summer. And so we have a bank rate survey, for example,

where every year they ask, are you going to travel? And that percent fluctuates every summer. And even within many surveys, we're seeing 60% will travel, 40% will travel, 50 kind of hovers around there. But in the bank rate survey this year, 23% were uncertain if they were going to travel at all versus 18% last year. And that's kind of the biggest jump year on year, I think,

everyone's just not sure what the future will hold and what their finances will dictate that they can do. Yeah. I mean, I think it's the Marriott CEO. He was saying pretty much the same thing, right? That people are literally waiting as long as they can to make those decisions. So he said the booking window right now for both leisure and business travel is at 21 days. Which if you think about it, like if you're planning your summer vacation, that is not

very long time especially if you have kids and there's a lot of you know planning that has to go into it yeah so you know for the time being people are choosing to push through and choosing to go through with those plans but the fact that the booking window is so short means that it could change at any moment yeah yeah so this is a good point it's generally so uncertainty

Is that what you want to be on the list? Yep. Okay. That's my consensus. I think it's a fair one. Rachel, you'd written that folks are taking a wait and see, which I thought was a good way of putting it, a wait and see approach to travel. Same survey or same surveyor, 46% of Americans had definite plans to travel this summer, down from 53% the year before.

before and then some other data as well I think it was from another one of your articles in February the share of Americans planning to take a vacation in the next six months dipped below 40% for the first time since the pandemic according to the conference board so I think uncertainty is a fair one Rachel what would you like to add? So my

is kind of along the same lines, but it's a little bit more specific, which is to say that cost is going to be king this year. Because of the uncertainty, people are really going to look for deals wherever possible. And at the same time, because demand is so uncertain, a lot of these airlines, for example, are leaning into discounts to try and get people to buy a ticket.

So I think, you know, that's going to manifest itself in a few different ways. One, it means fewer international trips, more domestic trips. It's going to mean more road trips and fewer flights, maybe shorter stays over week-long excursions. So all of these things are really going to play into people's travel plans this summer. Looking at this chart, U.S. consumers rethink travel plans amid economic uncertainty, you can really see that

lot of people are planning to scale back their trips. You've got 20% who have or will travel less than they planned, another 19% who plan to shorten their trips, 14% who are changing where they're going, and this is all coming from a Harris Poll survey conducted for the points guy. So you know there are clearly a few different ways that people are looking to save money on travel this summer. Yeah.

Yeah, and it seems as though there's a bit of a bonification happening. I think you've written about this as well. There's fewer lower middle income folks traveling, right? You've got households making less than $50,000 now making about 18% of travelers this summer according to Deloitte. That's down from 31% two years ago. So from 31% down to 18%.

And Rachel, you said that airlines, they know this is happening and they're actually playing into this. The Delta, you were saying they have a most of their capacity is going to be for premium seating.

I think that's the goal for them is they're really refitting all of their plans to accommodate what's still pretty solid demand from upper high income consumers. But what I thought was really interesting was there's some data from Bank of America looking at how spending is broken out between demographics. And the one segment that is strong across all income levels is cruises.

That is the one area where lower income households are actually going to be spending more this year than last year. So I think, you know, again, it's the search for value, right? There's this perception that cruises are a more affordable way of vacationing. And so, you know, it's things like that that are really going to see a surge in demand this year. Yeah, it's so shocking. We'd written their obituary. Yeah.

Right. Pandemic. Yeah. They come back with a vengeance. Yeah. I think also where there's so much in the news about airlines and problems at airports and, and air travel. And so I think cruise is a good example where people are turning. We also see a lot of data that road trips, you had mentioned Rachel road trips are really high on the list of types of travel that especially in the summer, summer road trip is,

a pretty common and i think that's true across the income too that uh we're looking at that bank of america study or deloitte marcus yeah yeah um so cost cost is king jenny there's one more spot on the list so i have to make it onto the list or maybe bump something off um what are you trying to add i do think ai i i can't uh talk about uh

travel plans without mentioning that travelers and planners are looking at AI more this summer than previous summers. And that's going to be true, I think, each year, subsequent year here. Generative AI usage and trip planning among US travelers, it comes from a survey from Deloitte. And

And it's showing an increase. It looks at last year and it looks at this year. An increasing number of travel planners are using Gen AI for their trip planning. So especially younger age groups like Gen Z and millennials, like 23 percent this year. So what you want to go on the list is using AI to plan trips? Yes. Okay.

I'm going to push back here a little bit. So it's gone from 10% to 15% in terms of total. Obviously, young people doing it more, old people doing it less, but from 10% to 15%. So it's not a ton of people, but it's not nothing.

Also, what do you think they're doing? Is this just discovery? I imagine they're not doing much of their booking using AI yet. Right. It's really planning. Like you said, discovery, it looks like, at least from some of the surveys we're seeing, getting dining recommendations, getting excursion or kind of day trip activity recommendations. It seems to be popular for that. Okay. But you're right. Yeah.

I was going to say, it's just not, it isn't a huge percent of the population at this point. Yeah. But I do see it increasing. Sorry, go ahead, Rachel. Oh, no, I was just going to say, I have tried using Gen AI to sort of generate itineraries a couple of times. And it's interesting. I mean,

I guess on the one hand, it sort of depends what you're looking at it for. If you just want a general overview, I feel like it's probably better at those kinds of things. If you try and drill down into specifics like budgets or hotel recommendations and those kinds of things, I feel like it could fall down a little bit. But I think as a starting point, as we've seen with other Gen AI applications, especially in the retail sector, I feel like it's a good place for people to start.

Yeah. All right, we've got a spot open. I'm going to place it third. I've got Uncertainty first, Costas King second, Using AI to Plan Trips third in terms of ways that travel is going to be different this year as compared to last year. Rachel, good luck. Okay. One spot left. Not one spot left, one attempt left to get on the list.

So I would say this is maybe not a huge difference from last year, but I think it will still have a big impact. We can move right to the end of the show. I've already counted myself out. I was hoping you'd knock me out of the room. But I'm very interested in this live tourism trend. So basically the fact that people are...

sort of using these live events as an excuse to travel. And so last year we saw that a lot with the ERAs tour. That was the big event. This year we had that to a certain extent with Beyonce's Cowboy Carter tour, but also sports tourism is definitely on the up. We had the Champions League final earlier this year in Germany. We've got the Club World Cup coming to the US. So I feel like that will be a pretty big driver of

interest especially you know as we said economic uncertainty may be causing people to rethink travel but these events are a great way to convince people to make that leap yeah yeah a lot of people traveling for f1 uh races which is a lot more popular now um that's a good one jenny i'm so sorry it's all right it is a good one ai is right off the list um but i think third i've got two for you

which are obviously going to make the list because I'm in charge of it. But the first one is that 2025, it was supposed to be a banner year for travel. And I think that is a bit of a narrative that, and I think,

You hadn't asked about this, Rachel, one of your many on travel. It seems like you're basically just a travel analyst at this point. I know. We need a travel briefing. It's not. We could have one. A record 5.2 billion people were expected to fly in 2025. That's up 7% according to the International Air Transport Association, IATA. The first time that it would have reached 5 billion, you were saying. And at the start of 2025, Americans had planned to travel more, 56%.

or at least the same amount, 30% according to the IPX 1031. So do we not think that's a bit of a story that this was actually supposed to be a big deal of a year for travel and the fact that now it's not is a bit of a storyline? Yeah, I think...

it will still be a big year, just not as big as companies were expecting. I mean, the IATA also just downgraded their profit forecast for the overall airline industry. I think they cut it by like $600 million. But they also pointed out that it's still going to be a record year in terms of profits, right? So at least, you know,

to a certain extent there are pockets of demand. You've got higher income consumers, international travel is still relatively strong here and there. And from a global perspective, I think demand is pretty high. Whether those travelers are coming to the US is another question. But I think overall, you know, demand is pretty resilient when it comes to travel.

oh it's funny you can look at a survey from february and then you can look at a survey from april and it's two different stories and a lot of it has to do with when when the tariffs news landed and and some of the travel restrictions and whatnot so i think it's fit you know survey respondents are fickle maybe is the right way to put it but i do think we'll see a lot of fluctuation here so i think that is a good

point that may bump out live events. May has done already. All right, let's knock off one of them. Here's my second swing. So you'd alluded to this, Rachel, so I'm hoping that you sign with me and knock off the other thing you tried to put on the list that I asked you to come up with. So our Karen Jacobs is writing about anti-US sentiment

spreading as the administration's tariffs aim to make the country less reliant on foreign products. She was saying global favorability of the U.S. fell 20 points

to what Jenny was saying in a very short period of time from January to March here according to morning consult views from Canada were down 44 points France 33 the UK 31 with more Canadians recommending that you should avoid the US than recommended visiting it according to you gov that's a big deal for a lot of reasons but um uh no one more so than um the fact that

Canada accounted for the largest number of visitors to the US last year at 20 million. Second is Mexico at 17 million. And there's a huge drop off to third place UK sending just not sending them.

We're coming because we want to. If I get out of England, you go over to America. $4 million, according to the International Trade Administration. So I think this one's a big deal, the fact that there's anti-US sentiment that's going to affect travel. One estimate by the World Travel and Tourism Council says the US could lose as much as $12.5 billion in spending from international tourists this year as a result of these anti-US boycotts.

So, yeah, I think that's going to have a huge impact on the domestic hospitality industry. And this one, that day's point is fascinating because you again writing it, but you have to do something else. I know it's not all about travel, Rachel. But in that article that referenced that source, you also said, was it the US was the only country? Yes. That's going to drop?

right is that correct yes the only country where travel demand to that country will be lower than the year before which is yes i mean it's a pretty clear sign 200 countries it was right yes yeah it was shocking um so rachel agrees with me already um i know i just i just kicked myself off the list yeah you're out jenny as if you need any more convincing but i do have a few more data points which i uh thought were great some of these from rachel's articles some of them from um

Karen's pieces. One was saying that research from tourism economics in late February revises outlook projecting a 5% drop in inbound visits to the US this year versus the earlier forecast which had a 9% increase. So expected to go up nine and then that's been revised to negative five and you start to see this play out. There are a ton of data points to suggest this is already happening. The IATA which is

over a few hundred different global airlines it represents. North America saw falls in both domestic and international travel in February. Overseas visits to the U.S. fell 12% in March year over year, according to National Travel and Tourism Office. Fewer international travelers also hurt U.S. carriers, and they said their Q1 profit forecasts were down. They revised them down. And then also in all-important Canada, a ton of data there,

Air Canada said inbound US inbound bookings were down 10% year over year in April. In the April to September peak travel period, the Canadians choosing other places to go instead. The number of people traveling from Canada to the US fell 15% year over year in April, according to US Customs and Border Protection. People going across the border, driving across was down even more.

You know, say more, Jenny, at this point. That's some good data. It's all Rachel's data, right? Ironically, Rachel, you're off the list. I don't know. Are you off the list? Where does this go? So we've got uncertainty, cost is king, and then 2025 was supposed to be a banner year for travel. Where would we put anti-US sentiment is spreading? I think it could even fit under economic uncertainty, right? Because the thing that is driving this anti-US sentiment is

was tariffs and that's the same thing that's causing us consumers to be uncertain. All right. So you're basically saying Jenny said that the beginning Marcus much more eloquently uncertainty. All right. Fair enough. Um, I know this quote, um, from the wall street journal kind of sums up how people feel about travel, um, really well. So I'll just say this to close out the episode. Um, Dan Ruswick, this is the quote, Dan Ruswick, um,

His sister and his mom were planning to take their annual trip to Comic-Con in San Diego at the end of July. They had booked their tickets to the event and a refundable hotel. The family, who live in Illinois, were looking into flights when the stock market started dropping. In mid-April, they canceled the trip, which they estimated would have cost about two and a half grand. The market's rebound and the tariff pause didn't change Mr.

saying, I don't have faith this is going to stay this way. Which I think is how a lot of people are feeling. Just because you might feel good today doesn't mean you're certain that you'll feel good tomorrow.

All right. That's our list. Uncertainty and anti-U.S. sentiment contributing to that. Cost being king is second. And then 2025 was supposed to be a bad year for travel and now will not be, but will still be pretty decent. We think that's all we've got time for for this episode. Thank you so much to my guests. Thank you first to Jenny.

Good to be here. Thanks. And then to Rachel. Thanks, Marcus. That was a lot of fun. And thanks to the whole editing crew and to everyone for listening into Behind the Limits, a new marketed video podcast made possible by Synth. Subscribing and following can sometimes feel too good. And leaving a rating and review is said to be life-changing. So feel free.

Sarah will be here Wednesday taking, uh, nope. She won't be taking anything. Instead, she'll be talking, who knows? Maybe she's taking things. Uh, she'll be talking with a special guest all about what it means to take a DEI or pride stance in retail and how that has affected companies. Is that true? Yes, it is true. Next week's episodes.