April 20, 2022 · Pete DiMaio
Leisure Travel Study: How Gas and Rising Costs Will Impact Leisure Travel
TravelBoom just concluded an extensive survey to frequent travelers to uncover insights into how the rising cost of travel will impact 2022 and beyond. Over 2,000 travelers completed the survey and the data will absolutely impact how hotels adapt to inflation and rising costs. Rising gas prices, and travel costs in general, are a major concern for the travelers we surveyed.
We’ve already seen a giant boom in some markets over the last 6 weeks of people booking hotel rooms. Some properties are seeing more than double the revenue booked online compared to 2019. The data in this survey shows that people are ready NOW to research, book, and travel in the very near future. A few key points are below:
- 30% of respondents state their vacation plans will change this year due to rising costs.
- 80% will be driving to their vacation destination, 15% will be flying, with the remaining 5% taking alternate forms of travel (rental car, train, etc).
- Nearly 61% will take fewer leisure trips compared to 2021.
- Rising gas prices will either moderately or significantly impact 65% of travelers.
- Completely cancelling a booked vacation is not out of the question for 1/5 of leisure travelers. The room nights a hotel has on the books are not necessarily guaranteed.
- There are tactics to ensure guests who have booked or are planning to book follow through on their trip. Free gas cards/credits, room discounts, and added value can help drive bookings.
- COVID still pays a role in the travel decision process. In 2020 and 2021 TravelBoom conducted 14 COVID Traveler Sentiment Studies and continually gauged if travelers felt safe vacationing. While the number of travelers concerned with COVID has dropped significantly, nearly 30% of travelers consider it a major concern.
- The order of questions in this summary differ from actual survey. Actual survey order noted on each question below.
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What is the first word that you think of when considering travel right now?
Pandemic-era concerns are largely relegated to secondary concerns for most travelers, however the new fear is clearly skyrocketing costs.
Key Observation: Expense, expensive, cost, budget, prices, and money are driving factors in traveler concern.
Opportunity: Costs will continue to rise and hoteliers may not be able to control prices, however adding value to a vacation can bring the perceived expense down.
Survey Question #1
When will you likely BEGIN BOOKING your next trip?
We asked travelers when they were planning to start planning, start booking, and actually travel for their next vacation.
- Nearly half (46%) of travelers have begun planning their vacation in or before April 2022.
- 23% have already booked
- Our survey audience is primarily a leisure traveler and not surprisingly over half of travel will be consumed in the summer months.
Opportunity: Planning season is now and 3/4th of vacationers have not yet booked. It’s time to make your case and lock in your summer bookings.
Survey Questions #2-4
In 2022, do you expect to take more, fewer, or the same number of trips than you took in 2021?
Fewer trips is the common response across a variety of questions and across a variety of demographic groups. The one group where we see significant shifts in this pattern is in the Canadian market, particularly as it relates to travel to the US. Just over 50% of Canadians are planning more vacations this year than in 2021. This is not surprising, since the Canadian/US border was largely closed last year.
Opportunity: While prices are increasing worldwide, new markets are now open. Canadian and international travel may be poised for a comeback. If you have previously been suppressing your Canadian marketing spend, it may be time to reevaluate your strategy.
Survey Question #6
In 2022, are you planning on spending more, less, or about the same on your leisure travel?
Similar to the question above, we asked about the overall spend for leisure travel in 2022. What we found is a majority, approximately 60%, are planning on spending the same or more this year than in years past. The drawback… with ADR up 30+% the increased spend will likely not result in additional room nights.
Opportunity: Value brands and properties may have a big opportunity to attract new guests. Travelers clearly “want” to travel, but the budget concerns are significant. Higher ADR properties will absolutely need to find a way to create value to back up their higher nightly costs.
Survey Question #7
The cost of travel has risen recently. How will the following impact your travel decisions?
We asked travelers to weight the impact of various costs associated with leisure travel. 64.6% felt that gas prices would either moderately or significantly impact their travel plans. 68.3% responded that the accommodations price would be the biggest impact on their vacation plans.
Travelers have correctly identified the major cost factors of a vacation. We address the gas question below, however nearly 70% of the respondents were moderately or significantly impacted by accommodation prices. Hoteliers will need to find creative solutions to addressing this concern.
Survey Question #8
Regarding the vacation you have already booked, Would rising gas prices cause you to cancel this trip?
This is the big question we are all asking, and the answer is incredibly concerning for hoteliers and anyone in the travel/hospitality market. Nearly 1/4 of all those who responded to our survey suggest they would cancel the trip they already booked if gas prices continue to rise.
This question was only asked to respondents who indicated they had already booked their 2022 vacation.
The past several years of the pandemic have created a very unusual situation for travel. Cancellation policies have been relaxed and customers have somewhat been trained to consider cancellation a very viable option for travel. What does this mean for travel this year and are the reservations already on the books really that secure?
Opportunity: The opportunity/action item to take away from this question is to plan for how your reservation staff will handle cancellation requests. We know (from responses below) we can save bookings with added value , gas vouchers/cards, and more; therefore make sure your hotel’s staff is prepared to address upcoming-guest concerns and have tactics to save the bookings.
Survey Question #10
Regarding gas prices, at what price per gallon would you reconsider driving to a vacation destination?
What we thought would be an interesting questions, but the results are exactly what you would expect. As the price of fuel increases, the more and more travelers would reconsider driving. Just over 70% of travelers would reconsider driving after gas hits $4 (for them personally). The data does suggest the current gas prices are already a burden on travel.
Survey Question #9
Will your vacation plans change this year due to rising travel costs?
The big takeaway of this survey is that just over 30% of travelers will change their vacation plans due to rising costs. This does not just take into account gas prices, accommodations prices, or entertainment. Cost of living increases are reducing the traveler’s disposable income.
Opportunity: destinations closer to a vacationers home will have a chance to get a traveler that would typically pass them by on the way to other destinations.
Survey Question #5
How will your travel plans change if travel costs continue to increase?
Most travelers have a some contingency plans should prices continue to rise with most travelers opting to either travel closer to home or reduce the number of trips taken.
We dissected this data further to look at respondents with children and while this group is much more likely to continue traveling their travel habits will be much more focused on traveling closer to home, reducing dining costs, and (not surprisingly) staying with family.
Expanding on travelers with children, when looking at the “other” option, where we asked for comments, we received some interesting feedback. Just some of the comments included (from travelers with children):
- “I will probably avoid long trips to USA and no near as many day trips also. I have 4 children so travel and vacation look very bleak”
- “Go camping more, lower overnight cost”
- “Plan staycations “
- “Less trips and/or stay close to home. Only day trips”
- “Cancel trip”
Survey Question #12
Which of the following would most likely persuade you to keep your current vacation plans?
This question is another key takeaway from our rising costs impact on travel study. We asked all respondents to share what would help motivate them to keep their travel plans. Across all demographics gas card/voucher and room discounts were far and above the most persuasive tools to recovering a booking.
In addition to the choices provided we asked for other responses, the most interesting are below:
- No “resort fees”
- Any extra “perks” would be welcomed
- As long as our home/vehicles expenses don’t keep increasing
- Gas and food discounts buy one get one would really help
Opportunity: Hoteliers can save their existing bookings, and drive new reservations, by being attentive to customer demands. Typically hotels always offer a discount of some type and the marketing of that discount should be very prominent. Strikethrough rates on the booking engine, bold home page and accommodation page promotions, and clear calls to action are all effective.
Furthermore, 64% of travelers would be persuaded by a gas card/voucher. This is very important when we put in context the actual increase in the price of gas. For this we will use the Federal Highway Administration’s average of 314 miles (one way) for a vacation drive, which equates to 628 miles total. The average midsize SUV gets approximately 22.5 mpg so the average vacation in the average car uses 28 gallons of gas. This means the increase in fuel for a trip is a tiny fraction of the overall vacation expense and the cost is more “mental” than actual. Therefore a hotel could completely overcome this objection with a $50 or less gas discount per vacation.
As you build out your promotions, find the balance between room night discount and added value/gas card. As a hotelier you can overcome the two big objections to the cost of travel.
Survey Question #13
Has rising transportation costs impacted your interest/consideration of the following?
Lastly, related to travel costs, we asked how rising costs will impact the demand for alternative fuel vehicles. Somewhat surprisingly travelers are largely uninterested in trading in their current gas engine for a hybrid or electric vehicle. Only 10.4% of respondents felt the rising cost of travel would greatly impact their decision to purchase a electric or hybrid. Less expensive or more fuel efficient cars appear to be more desirable than the alternate fuel options.
Opportunity: While the travelers in our data set were not highly motivated to change their vehicle type, a portion of the population is making the switch. Based on our 2,000 responses, 201 travelers appear to be highly motivated to switch to an electric vehicle. Hotels will be rewarded for offering charging stations to guests. This will become an amenity/service that is a deciding factor for a larger and larger percentage of travelers.
Survey Question #15
How much influence does COVID have on your travel plans?
Great news! nearly 3/4th of travelers only see COVID as a minor influence or non-factor. However, this doesn’t mean we ignore the population that is still concerned.
Hotels should continue to promote and adhere to their sanitation standards and guests still demand to know that their room, and vacation in general, will be safe and healthy. The top way hotels can influence travelers to choose their property is provide a deep cleaning between guests. Is this possible for every property? The bigger question is what constitutes a “deep cleaning” in the guest’s mind? Could a property make minor changes to the existing cleaning procedure to be able to make the claim?
Secondarily, little things like sealing a room after it’s been cleaned (yes hotels have always done this), sanitizing and placing the remote in a plastic bag, and offering remote check in are all incredibly easy to do and could be the deciding factor for guests, even those not concerned with COVID anymore.
One interesting note is 42.3% of respondents indicated a proof of vaccination would have no impact on their travel decision. However this question could have been worded to ask if requiring a vaccination proof would be a detriment to booking a stay. This is a polarizing issue and one that hotelier may be wise to avoid.
Survey Questions #17 – 19
Pick the top 3 reasons that would prevent you from staying at a hotel right now.
One question we have been asking travelers for the past several years, “what would prevent you from traveling right now?” As you can expect in the past the top responses were health and COVID related, however now it’s not even close. The good news, COVID is an afterthought. The bad news, budget concerns, travel costs, and a general uneasiness for the economic outlook are the chief reasons travelers are staying in place.
Opportunity: Finding the opportunity in this chart can be difficult. Three of the top four concerns are beyond a hotel’s ability to control. The one positive is the biggest concern is the cost of lodging. There’s two ways a hotelier can overcome this hurdle:
- Reduce Rate: Though you may not want to start cutting rate just yet, the post-pandemic boom of 2021 resulted in skyrocketing ADRs for hotels. The industry knew a reckoning was coming it is possible your ADR has outpaced the value you offer guests. If this is the case, reducing your rate may make sense.
- Improve Perceived Value: Cutting rate is typically the last thing we recommend, the better solution is to improve the value proposition you offer your guests. Deliver on the service promise, surprise and delight, wow the guest; these all lead to higher rates of occupancy and better long-term guest relations.
Survey Question #20
Complete the following sentence: I will travel when:
In closing our survey we asked when they would be traveling. The results were, as usual, across the board, but the big takeaway is customers want to travel but are concerned with not only the price of a vacation, but the price of living in general.
Hoteliers have an uphill battle in 2022 and savvy marketers have an opportunity to find new ways to attract guests, improve service, and reduce operational costs. One thing is clear, with the financial changes anticipated by travelers the lazy hotelier is in for a very bumpy ride.
Survey Question #21
Methodology and Sample Set
TravelBoom conducted the Rising Costs Impact On Travel study at the beginning of April 2022 to avid travelers on Facebook and an email database. The 2,000+ responses represented nearly every US state, Canada, and several additional countries. The highest percentage from any given location was 10.8% from North Carolina. 46% of the audience had children at home and the age breakdown was 2.8% under 26, 19.6% between age 26 and 39, 33.1% between 40 and 55, 40.8% aged 56 to 74 and 3.7% aged 75 or older.
If you would like more information about the survey or would be interested in having TravelBoom segment the data to answer your specific questions, please contact us.