Making Sense of This Recovery

The talking points at Arival Activate in Berlin and IPW in Orlando were all in sync: travel is back and travelers are returning to tours and attractions in droves, but deeper discussions revealed a rebound that’s anything but even and an outlook with an undercurrent of concern

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The simple story is one we all want to hear: everything is getting back to normal. There were plenty of attendees at Arival | Activate who were riding high on travel’s return. 

The opening session set the tone. “Today, basically in all of the major geos that we operate, we are now double to triple our pre-Covid numbers,” said GetYourGuide CEO Johannes Reck

The digital shift to online booking has clearly benefited OTAs, with speakers from Headout and Tiqets both saying that bookings are up well over 2019. Tripadvisor reported that its Experience & Dining division, which includes Viator, is up 15% vs. Q1 2019. 

Many operators are performing well, especially in key destinations such as Greece, Italy and Spain. Leaders from Greek operators Alternative Athens and Key Tours, Spain and Latin America operator Amigo Tours, and multi-destination tour operator City Wonders all indicated bookings were well ahead of pre-pandemic levels. 

Not Everyone’s Up Up Up

The economic benefits of the return of travel have hardly been even, and many operators remain well behind 2019. In a recently completed Arival survey of 250 visitor attractions and tour and activity operators supported by Tiqets, a majority of respondents were either on par with 2019 or above, with an average projected sales gain of 10%. 

However, one in three respondents said 2022 bookings would be below 2019, with an average shortfall of 30%. (Arival will publish the full results from this survey later in June.)

Making Sense of This Recovery Douglas Quinby Arival

This uneven return revealed itself in many private, off-stage discussions. Several attendees — both operators and distribution companies — said their overall business was still short of 2019 levels. 

Krzysztof Balon, CEO and co-founder of AT Cracow in Poland, spoke openly during the general session at Arival | Activate about the challenges facing his market because of the war in Ukraine. He said their business was still at about 25% of 2019.  

And he’s not alone. Destinations are coming back very unevenly. The war is casting a shadow over Eastern Europe, while inflation and rising gas prices are posing a risk to traveler’s spending power. 

The Labor Crunch Is Slowing Growth and Squeezing Profits

Yes travel is back and much of the experiences sector is benefitting, but there’s a catch. Even those who are well up over 2019 are now struggling with fulfilling demand. Several operators speaking at Arival | Activate said hiring and retention is the number one issue, with guides and drivers in high demand. Too many left the industry during the pandemic and not enough have returned. 

Pandemic Winners may Finish Second or Third in the Recovery

Businesses that outperformed during the pandemic — outdoor activities, watersports and attractions in secondary destinations and drive markets — are experiencing a slowdown, or at least a deceleration of the growth they saw over the past two years. 

Some watersports operators in the Southeast U.S., which saw demand skyrocket when travelers couldn’t go to New York, Europe or the Caribbean, are now reporting a slowdown in 2022. They may still be above 2019 booking volumes, but as travel starts to return to more pre-pandemic patterns, the sky-high growth of some industry segments may be coming back down to earth. 


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David West, executive director of destination marketing for Herschend Family Entertainment, which operates several amusement parks, water parks and aquariums, acknowledged as much when speaking at the Arival Attractions Outlook session at IPW last week in Orlando. The pandemic provided an uncharacteristic bump in visitation, and 2022 may fall short of 2021 as travel becomes more “normal”.

West was more concerned about inflation and rising gas prices, which could eat into Americans’ appetite for road trips as well as their willingness to spend on travel and leisure activities. He said they are already making contingency plans for the possibility of a recession in the U.S. 

Travel in 2022 may be Recession Proof, but Not Impervious to Inflation

After two years of little to no travel, it doesn’t seem that travelers are going to let the fear of a recession stop them from clicking the book button. Perhaps the biggest concern among OTAs and operators right now is being able to fulfill all of the demand.

However, rising inflation and interest rates along with the significant drop in global stock markets could put a dent on travelers’ purchasing power. Operators at Arival | Activate Berlin indicated that travelers continued to spend more, and that more expensive, higher-end tours and experiences were booking out faster than mid-market tours.

However, global macroeconomic trends could result in travelers taking fewer or shorter trips, spending less in destination and doing fewer activities. Operators should be prepared for the possibility of a downturn in the second half of 2022.


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