With the most difficult moments of the COVID-19 pandemic behind us, the tourism industry has made impressive strides in 2022. But new challenges, including labor and supply shortage, high fuel costs and soaring inflation, continue to complicate the tourism business and slow the industry’s recovery. The Group Travel Leader spoke with the heads of four tourism industry associations to get their perspectives on tourism’s recovery prospects, attracting new talent, grappling with inflation and meeting changing customer expectations.
Carylann Assante, CEO, Student and Youth Travel Association (SYTA)
Terry Dale, President and CEO, United States Tour Operators Association (USTOA)
Catherine Prather, President, NTA
Peter Pantuso, President and CEO, American Bus Association (ABA)
Do you expect your members to reach a full recovery from the pandemic in 2023? What indicators lead you to this conclusion?
Dale: We’re hopeful that 2023 will take us back to where we were in 2019. I will couch that by saying we were hopeful for 2022, and clearly that didn’t materialize. But there is a real sense of optimism about next year. Advance sales are strong and calls expressing interest in travel are high. All those variables coming together give us this hope that 2023 will be the year recovery happens.
Prather: I wish I could say yes. Talking collectively about our tour operator members, a full recovery in 2023 is overly optimistic. I hear from some that 2022 has been one of their best years, and they’ve seen incredible demand and strong bookings. Two different operators told me last week they had surpassed 2019 levels. Then I talked to others who continue to struggle. It depends on where they’re located, the types of tours they offer and the demographics of their customers.
Pantuso: It depends on which segments of members we look at. We actually don’t see full recovery until 2024.
The charter and tour market had a very busy spring in terms of activity. The prices that operators are getting from charters on average seems to be much higher. But it’s a supply-and-demand issue. The demand is there, but some of the supply has gone, so prices went up, and the overall volume of travelers was much lighter than it would typically be.
I think we’re going to see a much more robust recovery for that segment in 2023. But I think the overall numbers will continue to be lower because of the supply — there are not as many buses and not enough drivers.
Assante: The majority of operators are saying they’re at 65-70% of 2019. They’re predicting that in 2023, they’ll be at 90% of 2023. But a handful of operators have hit 2019 numbers or more.
Where your clients were geographically and where they wanted to travel made all the difference. You could travel to Florida and Texas and some of the Southern states. If you were based mostly in the U.S. and in a geographic area that was open, those tour operators did well and picked up additional business. For those working with New England schools, those schools were less likely to approve travel.
But overall, with all the bumps and hurdles, it was a really positive travel season, and we have a good amount of business booked for the fall. Net year looks strong if everything stays steady.
There’s a deep need for new talent at all levels of the tourism and hospitality sectors. What should forward-thinking companies be doing to identify and recruit promising individuals for work in our industry?
Prather: There is an incredible need for more people working in our industry. New talent means younger people entering the workforce, as well as those seasoned professionals in other industries looking for a change and people who in the past haven’t had opportunities in travel and tourism.
I think people could get involved with area colleges, universities and vocational schools with a focus on tourism and hospitality. Many have boards and advisory councils on which someone could serve just for the networking.
We know our industry is also lacking in good quality, full-time, fully compensated, career-path positions for people in underrepresented communities. You may not know where to start in welcoming more diverse members to your team, but it starts with learning and understanding. You can get involved with organizations such as Tourism Cares or Travel Unity or the Blacks in Travel and Tourism Community.
Assante: I believe that all tour companies will have to adjust to employees working virtually to find the talent they want, because it’s very challenging to find people that live in the same ZIP code as your office. If you’re based in an expensive area, you have to pay a high salary, but if you can work with someone in a different area, you can pay a competitive salary and find good talent.
We’ve also been looking at this from a diversity, equity and inclusion perspective. Where do we do our job search to really find candidates of color? You may not be able to use traditional search methods like LinkedIn or Indeed. If companies want to build a culture of inclusion, they need to use other means to find those workers.
dale: This is probably the No. 1 issue facing our industry today, but I think the way we approach it can actually be an opportunity.
We aren’t the most diverse industry, even though we take our customers to every corner of the world. That’s not necessarily reflected in the composition of our talent. So it’s a priority for me and USTOA to help our members address this labor shortage and, more long term, address getting more diversity into our organization.
There is no silver bullet. This is a long-term challenge and opportunity. We’re looking at how we can build relationships with historically Black colleges and universities and other entities of that nature to start telling our story and hopefully inspire young people with a career.
Pantuso: It’s interesting to see how some companies have adapted in some cases. Some are saying ‘We’re never going to have enough workers, but we’re going to make do with what we’ve got.’
People need to think about hospitality as a career. In many places, it’s an entry point into the workforce. Workers have the ability now to demand a lot more than they did 24-36 months ago. And what they’re demanding is a trajectory to the future. How are you going to help me advance and be in a different position in the future?
How is the current inflationary environment impacting your members? How are they accounting for it in their businesses this year and their plans for next year?
Assante: For the short term, I believe that parents are adjusting — they’re willing to pay the prices we have to pay right now.
What will be harder for 2023 will be that they’ve spent their additional discretionary income. If a trip to D.C. is 50% more, the family, the school or the fundraiser will have to absorb it. Some are adjusting the number of days on the road. Others are traveling even longer to make the most of the trip — doing five days instead of three to really make it worth it.
Pantuso: We see inflation everywhere — in fuel, in the cost of equipment and in supplies. It’s affecting the industry across the board. Are customers going to pull back? Are they starting to feel like we’re in a recession cycle? People are waiting to see whether they’re going to be working and if prices are going to increase, so they might be delaying those travel decisions.
When it comes to businesses, they have to be vigilant about their planning cycles and how much they’re going to be paying and how much they’re charging the customer. They need to figure out what they can take on and what they need to pass on. They need to ask, ‘What can I do better and smarter than I was doing before?’
prather: We just had a call with our buyer network about this because it’s such a challenge for 2023. Our members talked about hotel prices increasing 50-60%, and that’s for hotels that are still working with groups. Many hotels have chosen to exclude groups in favor of transient, families and other customers.
One member said, “You have to work with the people who will work with you, because the situation will turn around eventually.” And conversely, hotels need to not forget their group travel clients. They will need that business in the future. If they burn that bridge now, it’s going to be gone in the future.
Dale: This one is a challenge for a trade association to answer. Inflation means our members’ prices are going up. Pricing is a huge issue. Our members do everything they can to create experiences that are affordable for their customers in light of this landscape. All these variables are shifting as we speak. I empathize with the challenges they face, but I have confidence that somehow they’ll figure it out.
Many people have spent the past two years taking stock of their lives and rethinking their priorities. Has this movement influenced the way people think about travel? Has it changed the way they value travel? Are they asking your members for different kinds of travel experiences as a result?
Pantuso: I have to believe that people want uniqueness they can’t get anywhere else. If they haven’t been on a trip in a few years, they want it to be special. They’re more demanding, and they’re requiring more of the coordinators of the trip, the tour operators, the guides and the bus company.
This industry has a real opportunity, more than ever, to show customers that it’s not about cheap. It’s about something unique, and they’ve got to be able to really instill that value proposition in that customer’s mind. I don’t need $49 rooms — I need something to give the customer that they can’t get anywhere else.
dale: My hope is that through the pandemic experience, we will see customers who have a greater appreciation for meaningful travel. I hope customers will think twice about the footprint they’re leaving and the type of experiences that help get our economic dollars into those neighborhoods and families that can benefit from them.
The responsibility lies with both the consumer saying, ‘We want this kind of experience’ and my members who ultimately create the experience. I hope we will see that shift, because we’ve already seen it happing in our membership.
Assante: I’ve noticed some gradual shifts in itineraries to include more culturally aware activities — things like including a Harlem dance tour or a graffiti tour in Denver. Maybe fewer stops but a more diverse tour. If I can work with a restaurant of color or a Black- or Hispanic-owned business, how can I incorporate those opportunities into our itineraries?
The young people are looking for it. They’re more culturally aware. And they’re questioning why we’re doing things the way we do.
Prather: The operators I’ve spoken with describe a ‘carpe diem’ attitude among their clients: Life is short — travel now. If clients have a bucket list, they want to check off destinations. And older travelers who gave up trips for two years sense the window closing, and they’re making every day count.
Bookings are strong for this year and next, and for many travelers, price is not as important as the destination or experience. And one operator pointed out that travelers are more forgiving when the unexpected happens — and with staffing shortages and supply chain issues, it’s definitely happening. But they’re not tolerant in one aspect: Travelers are definitely judging hotels and restaurants on cleanliness, as we’re hearing from operators.
