In travel, it’s often difficult to see behind popular trends. This year, things seem different. Witness two headlines published almost side by side mid-January:
“US Business Travel Industry in Trouble” and then “International travel spending in the US to reach $198 billion by 2025.”*
How can the two views be reconciled? What does each headline reflect, and what do they mean for the future? They seem to describe two Americas – those who are traveling and those who are not. There’s a mixture of opportunity and caution at home, and the perception of USA as an expensive destination for incoming foreign tourists. How do things play out?
A Tale of Two Travel Trends
On one side, there’s a robust rebound in international travel, for both business and leisure. This surge is fueled by a resilient US economy with good levels of employment, and a strong dollar. And despite a mixed outlook for the dollar in 2024 and 2025, there is plenty of confidence to sustain this momentum in international travel.
Conversely, domestic air travel shows a very different picture. It remains subdued, a lingering effect of the pandemic’s disruptions and evolving consumer preferences. Those who can afford to travel appear to be going international. Others, perhaps harder hit during the last few years, have cut down on vacations within the US or are choosing not to fly. A recent survey by AARP (formerly the American Association of Retired Persons) records that 61% of those surveyed are, when traveling, opting to do so by road. Recent safety concerns about the Boeing 737-9 Max can only add to that picture.
This dichotomy presents a unique opportunity for the travel and financial service industries.
Taking Stock
Foremost, there’s good reason to anticipate that North America’s outbound international travel will continue its robust performance through 2024. According to Future Market Insights*, in 2022 the US outbound travel market was worth approximately $102 billion, increasing to $190 billion in 2023. This recovery signals airlines, tour operators, and cruise lines to adjust accordingly. Increased capacity is likely.
Meanwhile, domestic air travel’s languor necessitates a strategic pivot. For travel retailers, this shift means recalibrating offerings to cater to the international traveler. The focus should be on providing comprehensive, yet personalized services that resonate with the needs of those embarking on journeys overseas.
A Strategic Opportunity with Foreign Exchange Services
Financial service businesses, especially including credit unions, also face a critical juncture. To capitalize on strong demand for international travel it’s imperative to provide what the market needs – like reliable, cost-effective foreign exchange services. By doing so they can serve their existing membership well, while also being in a strong position to grow market share. To do this, the right digital service is essential. Money 4 Travel from Essiell is an excellent example. With smartphone convenience and easy adoption (no system replacements are required!) this efficient and cost-effective service significantly improves foreign exchange operations as well as the member customer experience
This strategic pivot is not just about adapting to current trends; it’s about anticipating future shifts and adapting. As the travel market changes, so too must the services and solutions offered by the travel and financial sectors. By staying attuned and responding proactively, businesses can not only meet their clientele’s expectations, but exceed them too.
By Declan Morton, staff writer at Money 4 Travel and Essiell Ltd.
References:
US Business Travel Industry in Trouble – eTurbo News, January 18, 2024
International travel spending in the US to reach $198 billion by 2025, Travel and Tour World, January 16, 2024
US Outbound Tourist Market Outlook, 2022 to 2032 – Future Market Insights,
