Deloitte's 2024 travel industry outlook

After more than two years of consistent year-over-year gains, leisure travel may have tapped all its pent-up demand from the peak pandemic years

Despite this optimistic outlook, could an economic downturn shift travel behaviors? Travel frequency and certain indulgences may see a decline, but if higher-income groups are relatively insulated from economic headwinds, higher-end travel products could have a better year than budget ones. On the corporate side, many decision-makers in the coming year will seek a delicate balance between conservative budgeting and pursuing the strategic benefits that travel can support.

Key takeaways

• Suppliers find ways to touch up the travel experience. High interest rates and elevated costs of some goods can make it difficult to update, let alone upgrade, hotels. And some of airlines’ biggest challenges have stemmed from weather events and staffing matters not entirely in their control. Still, airlines and hospitality providers know they need to improve the experiences they offer or risk losing travelers’ attention;
• The corporate comeback continues, but gains decelerate. While trips to build client relationships and support team collaboration remain key to business success, costs are a significant concern. Amid these efforts at prudent budgeting, US corporate travel spend is still likely to finally pass the pre-pandemic line within the next year;
• Marketing spend shifts to account for changes in platforms and demographics. As travel demand has returned and shown continued resilience to economic anxiety, the industry’s marketing spend has trended up, and travel providers have ridden a wave of pent-up demand. But as travel growth slows, there will be a greater need for more targeted marketing and for travel providers to build new strategies for a changing landscape;
• Gen AI: Behind the scenes and front and center. Gen AI is already influencing travel, with call center efficiencies the most widely reported benefit. In the coming year, expect it to influence the industry in major ways. More visible applications (new options for discovery, shopping, booking) will garner much of the attention, but less visible applications might actually be more influential. Promising use cases for travel providers include advertising strategy, marketing content, and personalization.

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