Search
Sunday, December 04, 2022

Travel trends of 2022

Editor’s note: Seeking Alpha is proud to welcome ETF Managers Group – ETFMG as a new contributor. It’s easy to become a Search Alpha contributor and earn money for your best investment ideas. Active contributors also get free access to SA Premium. Click here to find out more »

Happy To Travel Again

Pyrosky / E + via Getty Images

Originally Posted on March 10, 2022

The travel and tourism sector has been plagued by concerns about COVID-19, mandatory restrictions and international mobility restrictions. In 2020, the global travel and tourism industry lost $ 4.5 trillion. The sector’s overall contribution to GDP was particularly heavy at 49.1% from 10.4% in 2019 to 5.5% in 2020, compared with a global GDP decline of 3.7%. International visitor spending decreased by 69.4%, while domestic visitor spending decreased by 45%.1

2021 has given us a look at the growth potential that reduced constraints and greater consumer confidence can offer. The US DOT reported that the volume of flights operated in 2021 was approximately 6.2 million. Although certainly higher than 2020 levels, this value represents only 78% of the volume of flights carried out in 2019 pre-pandemic (7.9 million).2 The industry therefore still has more than enough expansion opportunities.

Rising vaccination levels are starting to ease travelers’ worries, and as the travel industry recovers from the pandemic-related battle, travel technology companies are naturally ready to reap the benefits. Consumers are increasingly relying on online travel agencies (OTAs) and ride-sharing technology to access travel-related services in a much more convenient and cost-effective way compared to traditional offline services. The market for online travel booking platforms alone is expected to grow at a CAGR of 4.91% over the period 2022-2026 to reach $ 204.81 billion.3 As for the global ride-sharing market, it is expected to reach USD 61.24 billion by 2026, which will increase at a CAGR of 17.32% from 2021 to 2026.4

The “Work from Wherever” (WFW) Movement

The COVID-19 pandemic has given rise to the era of work from home (WFH), a trend that is expected to continue into the foreseeable future. Among 127 company leaders led by Gartner, Inc. surveyed, 82% plan to allow at least some remote work, and almost half (47%) said they intend to allow employees to work full-time remotely in the future.5 This flexibility provides a unique opportunity for workers to pack up their laptops and mix leisure trips with remote work; we already see how these employees benefit.

Travelers planning to work while away have a unique set of features that define the new wave of WFW. They have above-average spending power and save an average of $ 4,000 annually on spending, which is often associated with office work – commuting, business attire, dining out, and so on.6 In addition, they have greater flexibility over travel dates. To serve this preference, short-term rental companies such as Airbnb (ABNB) and Vrbo (EXPE) have optionally added flexible dates.

Remote work can exacerbate the rise of holiday rentals as a preferred means of accommodation. An important feature of the working holidaymaker is the need for a work-friendly place to stay. Their needs include a quiet and comfortable space to work, as well as fast and reliable Wi-Fi. Short-term rental companies are ready to cater to this need and capitalize on the remote work trend, as they generally offer more workspace than the typical hotel room. These companies have worked to improve their features to accommodate the needs of working holidaymakers. For example, in 2021, Airbnb released a feature that allowed travelers to check the Wi-Fi speed of the listing before booking.7

WFW travelers also have a greater ability to undertake long journeys. Not only did working travelers plan twice as many trips as those planning to fully unwind, but more than half of employee vacationers added 3 or more days to the duration of their longest leisure trip.8 In February 2021, 11% of surveyed remote workers said they had undertaken long journeys due to remote work flexibility; by early October 2021, the number had risen to 23%.9 With more companies allowing flexible remote jobs, we expect to see the travel industry continue this growth due to the WFW trend.

The year of the “BOK”

In addition to those who mix work with leisure, 2022 could see a boom in luxury travel as pent-up international travel demand is unleashed amid the stabilizing health situation and the relaxation of border restrictions. For this reason, Expedia 2022 calls the year the “GOAT” (Greatest of All Trips). In a poll of 12,000 travelers in 12 countries, Expedia found that more than two-thirds of Americans (68%) plan to go big on their next trip, with a view to international destinations such as Rome, Bali, London and Paris. .10 Travelers worldwide are eager to catch up on lost time and go big on their next trip after a long period of canceled trips and delayed celebrations. According to a November report compiled by the WTTC and Trip.com, 70% of leisure travelers across the US, UK, Canada, Japan and Spain expect and plan to spend more money on travel in 2022 than they do in the US. past five. years.11 Looking ahead, the future of the travel industry looks bright, as higher-income households have seen their savings increase, along with rising travel demand.12

Ride

The global ride-sharing industry saw a ~ 17% drop in revenue generation in 2020 from 2019. Restrictions curtailed the need to travel far from home, and consumers remained reluctant to use ride-sharing services even after lifting mandate mandates is. To promote passenger and driver confidence around safety and sanitation, carpooling companies such as Uber (UBER) and Lyft (LYFT) have implemented safety measures aimed at alleviating the concerns of both riders and drivers. Things are starting to look like for the shared mobility market, with an expected CAGR of 16.7% over the period 2021-2030.13

It is driven by several factors. First, many local travelers still feel uncomfortable due to overcrowded public transportation options, which drives the demand for more comfortable intercity ride models. Societal societies have implemented safety protocols to alleviate this concern, by introducing physical barriers between drivers and riders, and requiring masks to be worn during the ride. Second, the rising cost of private vehicle ownership due to rising fuel costs, maintenance and insurance14 has led to a decrease in car ownership levels among individuals aged 18-35 over the past few years.15 Millennials and Gen Xers’ preference for ride-sharing over full car ownership has been linked to the perceived time and cost benefits of shared mobility, as well as their desire for technology and services on demand.16

In their financial results announcement for the third quarter of 2021, Uber reported that gross discussions reached a record high of $ 23.1 billion, an increase of 57% on an annual basis, with revenue rising by 72% over the same period .17 Lyft achieved similar results, with revenue growth of 73% in the 2021 quarter on an annual basis.18 We believe we will continue to see similar growth over the coming years as consumers become more comfortable with the state of public health.

Closure

Over the past decade, travel technology has grown from a niche concept to a primary way of obtaining and booking travel services. Although the COVID-19 pandemic devastated the travel and tourism industry, causing losses of nearly USD 4.5 trillion19, raising vaccination levels and easing government restrictions raises the expectation of a strong return for the industry. As we look to the future of a post-COVID-19 world, we believe that travel technology companies are ready to not only capture the remaining growth, but help propel the industry forward with technological advances aimed at to address shifting consumer preferences.

Capture the pent-up demand for global travel and tourism with the ETFMG Travel Tech ETF (AWAY), the first ETF to offer investors access to top technology companies at the forefront of travel bookings, advice, price comparisons and ride sharing.

Companies mentioned in this article may or may not currently own any of the funds managed by ETF Managers Group LLC. Investments are subject to change without notice.

Sources:

  1. WTTC

US Department of Transportation

3. Business thread

4. Mordor Intelligence

5. Gartner

6. Bending

7. Airbnb

8. Deloitte

9. Move

10. Expedia

11. WTTC

12. PWC

13. GlobalNewswire

14. AAA

15. Markets and markets

16. SpingerLink

17. Uber Investor

18. Elevator

19. WTTC

Original post

Editor’s note: The summary bullets for this article were selected by Seeking Alpha editors.

Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.

Latest News

Related Stories