Five Takeaways From the Year-End USTOA Conference

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Tour companies at the U.S. Tour Operators Association’s (USTOA) annual conference in Austin, Texas earlier this month expressed a positive outlook regarding leisure travel’s 2022 performance and the prospects for future growth in 2023.

Still, nearly all said significant risks have them cautious, as diverse variables, from economic uncertainty to global pandemics to severe weather, loom as potential roadblocks to growth. Here are five takeaways from the 2022 USTOA gathering.

Optimistic Outlook for 2023

A PricewaterhouseCoopers survey commissioned by USTOA found members are positive regarding their business prospects in 2023. Eight out of 10 operators anticipate “optimistic to significant” sales and passenger growth, predicting from 7 percent to more than 10 percent increases in both sales and passengers next year.

Members also re-built staffing levels, even as firms continue to face challenges recruiting workers. USTOA members project employing 11,650 people in the U.S. by end of 2022, down 14 percent from the 13,620 individuals members employed in 2019.

Global Risk Concerns Persist

USTOA’s survey found its members remain concerned over future global risks, including global pandemics, economic recession and extreme weather, which they believe may impact leisure travel in the next three years.

Most members (67 percent) were “very to extremely concerned” over cost-of-living increases, which was down one spot on the list from the 2021 trend survey. Meanwhile, 49 percent of USTOA operators are “very to extremely concerned” about pandemics and other health crises.

“This shows that members are not fully passed the worry and challenges brought on by COVID,” said Terry Dale, USTOA’s president and CEO.

Italy is the number one travel destination among Americans according to a USTOA survey. At Crotone, Italy’s Castle of Charles V. (Photo by Brian Major)

Sales Down, Revenue Up in 2022

While USTOA members did not sell as many tours in 2022 as during the last pre-pandemic year, they project to earn more from their sales this year, the PricewaterhouseCoopers survey found.

Member tour companies project to sell 3 million packages in 2022, down 22.6 percent from the 3.8 million packages sold in 2019. Yet revenue gained per traveler projects to increase by 8.9 percent, with revenue per package up by 11.8 percent in 2022 versus 2019.

Additionally, more than half (57 percent) of USTOA members report the cost of travel packages increased between 10 and 24 percent, while 29 percent report an increase between 1 and 9 percent.

Sales Success

Overall, USTOA companies generated sales reaching $15.9 billion dollars in 2022, representing 6 million individual travelers, said association officials.

While the figures were down from the $18.4 billion tour operators generated in 2019 (and that year’s 7.6 million individual travelers), the 2022 activity represents a strong rebound considering the challenges posed by the pandemic.

“By the close of 2022, USTOA tour operator members report a recovery in sales of 87 percent from 2019, which is remarkable,” said Dale.

“Given the unprecedented challenges of the past two years, the numbers align with the reality of what the global travel industry is facing,” Dale added. “The tour segment as represented by our members seems to be pacing ahead of the industry at large.”

“The biggest takeaway is that we’re at 87 percent of pre-pandemic level [sales], which is really impressive considering the impact of omicron,” said Scott Wiseman, senior vice president and general manager at Apple Leisure Group. “While technically we’re not back to [2019] levels, it’s hard to argue that it is not much of a stretch from where we thought we would be.”

Santuario de Fauna y Flora Los Flamencos
Colombia is among the countries USTOA members identified as an emerging travel destinations for 2023. (Photo by Brian Major)

Europe, Africa Headline Popular and Emerging Destinations

USTOA members include some familiar favorites among the destinations they identified as most popular with travelers booking 2023 leisure travel. Italy topped the list, followed by Greece, France, U.K., Iceland, Egypt, Spain, Portugal, Jordan, Japan, Maldives and Ireland.

Members listed Iceland as the most popular “emerging” destination for 2023, followed by Egypt, Croatia, Colombia, Norway, Antarctica, Portugal, Morocco, Saudi Arabia, Turkey, Jordan and South Africa.

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Source: TravelPulse

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