Studies see possible muted fall, return of holiday travel

Following a “red-hot” summer, a new report by digital intelligence platform Similarweb paints a “mixed picture” of travel trends, according to Similarweb senior insights manager Jim Corridore.

The report uses data from three of the biggest online travel agencies: Expedia, Airbnb and Booking.com. Similarweb’s study primarily looks at global web traffic and U.S. conversions.

The summer of “revenge travel” - in which consumers spent their discretionary income on travel despite the wavering economy and higher inflation - has given way to a muted fall and winter travel outlook, the study reveals.

Web traffic for Expedia , Airbnb and Booking.com dropped slightly from August to September, and again from September to October, Similarweb’s analysis shows.

“The decline is not anything to be concerned about. It’s in line with historical travel trends,” Corridore says. “I think what we are starting to see now in the numbers is that that trend is starting to return to more seasonal patterns.

“Over the summer, we had a really hot period of time, and that was unsustainable.”

All three of the companies saw a decline in web traffic in the third quarter ending Sept. 30, 2022, “both versus Q2 and versus the prior year,” Corridore says.

• Year-over-year, Airbnb’s web traffic rose 11% for October and fell 20% for Q3.
• Year-over-year, Expedia’s web traffic climbed 19% for October and dropped 19% for Q3.
• Year-over-year, Booking.com’s web traffic increased 12% for October and declined 21% for Q3.

“The recent [quarterly] drop year-over-year could indicate a potential drop in travel demand beyond normal seasonal patterns,” Corridore says. Possible causes include the recent decline in consumer confidence amid high inflation and higher interest rates.

When people are spending more time on OTAs’ websites, it means they’re looking for a deal, according to Corridore. Consumers are shifting from vacation rental brands to OTAs, indicating more price sensitivity and potential trouble for companies like Airbnb and Vrbo, he adds. Airbnb recently announced it was increasing price transparency .

“People are very concerned about how high fares have risen, so that’s showing up in more OTA bookings rather than direct bookings at hotels and vacation rental companies,” Corridore says.

“Even though the numbers are only dropping in line with seasonal trends, I think that consumers are clearly concerned about fares and about the economy.”

Traffic conversions - web visits that end in a purchase - rose 10% for September compared to the same month last year and climbed 10% for Q3 year-over-year for Booking.com, Airbnb and Expedia, Similarweb’s report shows.

However, conversations have declined gradually since the summer.

“Converted traffic seems to be returning to historical fall traffic patterns, but the rate of decline is accelerating, with September down 18% from August, with August down 2% from July, and July down only fractionally from June,” Corridore says.

Conversions “are still above pre-pandemic levels, and they are above 2021,” he explains. “But the rate of descent is a little concerning, and it’s happening in concert for all three companies that we tracked, so it’s clearly a trend.”

Based on new data from airlines and cruises, “airlines are also in line with hotel and vacation rentals and are seeing a seasonal dip.

“But cruise demand remains red hot … because cruises were actually completely off the table for a while, so there seems to still be pent up demand for cruising,” Corridore says.

Consumers demand secure digital pay

Visa is seeing the travel recovery continue: Cross-border travel now exceeds 2019 levels by 16%, excluding intra-Europe, according to Jeni Mundy, Visa’s global head of merchant sales and acquiring.

A recent Visa survey conducted by Morning Consult finds that 41% of U.S. travelers plan to travel this holiday season - up 13% from last year. Ninety percent plan to travel domestically versus internationally (10%). Nearly three-quarters of people plan to travel to their holiday destinations by car.

Nearly three years after COVID first impacted travel, 38% are traveling as they normally would, while 40% have changed travel behaviors, the survey shows.

One change is a rising demand for digital payments. Visa says the global adoption of tap-to-pay grew 10%, to 54% of face-to-face transactions, excluding Russia.

“The accelerated adoption of digital technologies since the pandemic began has redefined customer experience,” Mundy says.

“To ensure a seamless journey as travelers bring a new set of expectations,” she explains, “businesses must take advantage of the technologies that enable this new world.”

Rising cross-border transactions add a layer of complexity to digital payments. Relying on outdated payments infrastructure could prove costly for a business, according to Mundy.

“It’s about the experience that consumers have come to expect whenever they make a purchase: They want it to be simple, seamless and secure, and they want choice in how they pay. From pre-payment to the end of their journey, travelers will continue to adopt and use tools that reduce complexity.”

Paris and London vie for top slot

In terms of destinations, Paris topped the global list for 2022, followed by London, according to eDreams ODIGEO ’s Year in Travel report .

London was number one for travel searches for 2022, followed by Paris, Istanbul, New York City and Barcelona.

The report reveals that 41% of all bookings globally were for trips lasting seven days or more. A quarter of all bookings were for trips of seven to 13 days, while 8% of all bookings were for journeys lasting three weeks or more.

Globally, travelers are waiting longer to book, with 45% of all bookings made relatively last minute - within two weeks or less of departure, compared to 36% in 2021 - an increase of 25%.

EDreams notes that in 2022 other key habits included increased interest in blending work trips with vacations and a rise in digital nomadism.

Looking ahead to 2023, the report predicts that Paris will again top the list of global bookings, followed by London, with Barcelona, Bangkok and Madrid. Bangkok is predicted to top the list of global searches next year, with London, Paris, New York City and Tokyo rounding out the top five.

Dana Dunne, CEO of eDreams ODIGEO, says: “Our bookings data shows short breaks are currently the most prominent, revealing that consumers are looking to squeeze in holidays wherever possible, with almost a third of trips lasting for just three to four days.

“Our findings also reveal that travelers have been spontaneous with their bookings. ... This underpins consumers’ desire to seize the day after being restricted on their travel plans for so long,” Dunne says.

The report covers the period from Jan. 1 to Oct. 31, 2022, and draws from data from major European markets and the United States.