Break out the flipflops and sunscreen. We’re going on vacation again this year. Probably.
After more than a year of “will-we-or-won’t-we” travel dreaming, a spate of recent indicators shows pent-up travel demand finally being unleashed in a surge of bookings and new tie-ups.
Marquee news in the travel sector on Monday (April 4) came from Carnival Cruise Line, announcing that March 28-April 3 was the “busiest booking week in the company’s history, showing a double-digit increase from the previous record 7-day booking total.”
The world’s largest cruise line said in a press release that 23 ships are in service, with Carnival Splendor joining the fleet May 2, and adding, “By year-end 2022, Carnival will have more capacity sailing (as measured by ALBDs — available lower berth days) than it was sailing in 2019.”
In 2023, Carnival will put another cruise ship into service, sailing from Galveston, Texas.
The latest Mastercard SpendingPulse™ data released Wednesday (April 6) confirmed the trend, noting that airline spending rose 44.8% in year over year in March, while restaurants and lodging also grew significantly, up 19.1% 46.4% respectively.
The Pandemic Traveler Emerges
COVID-19 continue to make headlines, but PYMNTS research finds consumers’ travel desires outvoting fears about infection last quarter.
“While the omicron variant’s spread continues to pose new health challenges across the U.S., consumers are not waiting to make travel plans,” PYMNTS noted in the Digital Economy Payments 2022 U.S. Edition. “The average amount consumers were spending on travel in January rose 33% from the previous month. Overall, consumers spent a total $23.4 billion on travel purchases.”
Get the study: Digital Economy Payments February 2022 U.S. Edition
High gas prices and inflation will take some wind out of the sales, but early signs are good.
Citing the latest CBRE Hotels Research State of the Union report, travel site Skift reported on Friday (April 8) that “Spring break travel positively impacted March performance data compared to January and February which are less leisure-oriented. CBRE is optimistic about the upcoming leisure-driven summer months.”
“Chain scale performance showed improvement in the upper-priced segments,” while lower-priced hotels may ironically see decreased demand,” per that reporting.
Taxi for Take-Off
Looking to the skies, on Tuesday (April 5) JetBlue confirmed its $3.6 billion all-cash offer to acquire Spirit Airlines. While calling the offer “unsolicited” in its initial reaction that same day, Spirit is reportedly considering it.
Coming months after Spirit and Frontier agreed to merge and create the nation’s fifth-largest airline, USA Today reported on Thursday, “Despite initiating talks with JetBlue, Spirit said its board has ‘made no change’ to its recommendation that Spirit shareholders adopt the merger agreement with Frontier.”
Travel spending and intent are strong enough to rattle some retailer who think a big shift in spending priorities from items to experiences could put a chill on retail sales.
Addressing the JPMorgan Chase Annual Retail Roundup on Thursday, Macy’s Inc. Chief Financial Officer Adrian V. Mitchell called domestic tourism “really healthy. People are traveling, going on spring break, going to see family,” while acknowledging that travel might siphon dollars.
“We do believe that the consumer is going to be spending,” Mitchell said. “But are they going to be spending on discretionary items that we sell? Or are they going to be spending on an airline ticket to Florida or going out to restaurants more? So that level of unpredictability is something we just have to be very measured around.”