Phocuswright Research Roundup 2Q24
An overview of the research reports published in 2Q24.
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The second quarter of 2024 might be a record: nearly 20 publications and the execution of our European event in Barcelona, Phocuswright Europe which took place June 10-12. (You can read the wrap up of the event here). April - June saw another massive collection of insights and news that powers the travel industry.
Here's a recap. (Click on each report title to access the report).
U.S. Reports
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Scroll, Heart, Fly: Social Media’s Impact on Travel 2024
Almost 17 years after Facebook first introduced advertising, social commerce’s star continues to rise. Marketers have flocked to social media fiercely strategizing to pull prospective and existing customers into their funnel. But in many cases, companies struggle to measure the true impact of their social strategies, and their understanding is clouded by the length of conversion periods, circuitous digital routes to booking, and lack of accurate attribution methods for social channels.
Phocuswright’s Scroll, Heart, Fly: Social Media’s Impact on Travel 2024 is a comprehensive consumer research study delving into the specifics of how social media platforms are used for travel planning and sharing. Key questions addressed include:
- In which scenarios is social marketing most effective? How can UGC play a role in turning scrolling into sales?
- What platforms are being used for specific components of the trip and how do travelers think about which account types and platforms offer them the best information?
- What travelers are looking for when they follow travel-themed or branded accounts, “like” content, post their own experiences, or even give formal tags and mentions to travel brands?
- Are there particular factors that promote conversion? How do they differ, based on trip type and who is doing the planning?
- Do distinct demographic groups engage differently with the platforms? With influencers? If so, what are the differences?
- How do travelers perceive creator content? What degree of transparency do they expect and prefer from these influencers?
- Can travel businesses determine which forms of creator content is most effective for their goals?
Social Media Usage Approach in Travel
Social commerce’s star continues to rise, with plenty of market share yet left to be captured. Marketers have flocked to social media, fiercely strategizing to pull prospective and existing customers into their funnel. Various consumer-oriented industries have found tremendous success in their social marketing. For travel, the waters remain murky. On the one hand, engagement with social content has played a clear role in driving destination growth – sometimes even directly propagating overtourism. But in many cases, companies struggle to measure the true impact of their social strategies and fail to comprehensively capture consumer interactions with their content.
Phocuswright’s Social Media Usage Approach in Travel is part of a comprehensive consumer research study delving into the specifics of how social media platforms are used for travel. Key questions addressed include:
- What platforms are being used for specific components of the trip and how do travelers think about which account types and platforms offer them the best information?
- What are travelers seeking when they follow branded accounts, “like” content, post their own experiences, or even give formal tags and mentions to travel brands?
- Do distinct demographic groups engage differently with the platforms? If so, how, and what may drive that separation?
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U.S. Hotel & Lodging Market Report 2023-2027
Amid a landscape of shifting sands, the U.S. hotel and lodging sector marked 2023 with record-breaking revenue, buoyed by high demand and surging average daily rates. The industry, adapting to post-pandemic norms, anticipates moderated growth in 2024, against a backdrop of a challenging economy and changing consumer preferences towards value and digital engagement. Challenges persist, from labor shortages to the competition posed by short-term rentals. Overall, this will push major chains to evolve with new brands and enhanced online experiences, catering to a generation of travelers seeking both deals and unique stays.
This report is part of the U.S. Travel Market Report 2023-2027 series, which features an overview of the U.S. travel market, along with detailed data and analysis of five key segments: airline, hotel & lodging, car rental, cruise and packaged travel. A standalone report dedicated to online travel agencies rounds out the coverage. Collectively, the series provides comprehensive market sizing, projections and analysis for the U.S. travel industry from 2021-2027.
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U.S. Airline Market Report 2023-2027
Demand remains high for the U.S. airline industry, as it witnessed passenger numbers surpass pre-pandemic levels in 2023, with over 855 million passengers traveling through U.S. airports. Airline gross bookings continued their double-digit ascent for the third consecutive year, buoyed by high airfares and robust demand, clocking in at 13% year-over-year growth. Direct distribution channels dominate airline sales, as suppliers embrace technological developments aimed to streamline the booking process and travel experience. While the industry navigates new challenges and the lingering effects of previous disruptions, namely on the price, sustainability and safety fronts, growth will also moderate as the market restabilizes towards an equilibrium point.
This report is part of the U.S. Travel Market Report 2023-2027 series, which features an overview of the U.S. travel market, along with detailed data and analysis of five key segments: airline, hotel & lodging, car rental, cruise and packaged travel. A standalone report dedicated to online travel agencies rounds out the coverage. Collectively, the series provides comprehensive market sizing, projections and analysis for the U.S. travel industry from 2021-2027.
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U.S. Online Travel Agency Market Report 2023-2027
As the digital landscape evolves, U.S. online travel agencies (OTAs) continue growing, with 2023 witnessing a solid yet decelerated 14% expansion in response to a stabilizing consumer demand post-pandemic. Hotels retain their leading position for the channel, constituting the majority of OTA gross bookings. Consequently, despite anticipated longer-term stagnation, these platforms have cemented their role in the U.S. travel industry, representing one-fifth of the total market’s and half of the online sector’s bookings. Nevertheless, the channel faces customer retention challenges. They aim to address them with technological innovation, including leveraging generative AI to gain operational efficiency. Overall, the stage is set for future developments in an increasingly competitive landscape.
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U.S. Cruise Market Report 2023-2027
The U.S. cruise industry has not only rebounded from the pandemic but has also soared to new heights in 2023, with gross bookings rising an impressive 122% over the previous year, surpassing previous peaks. This resurgence is underpinned by robust growth in new and younger cruiser demographics, coupled with a significant increase in both onboard and pre-cruise spending. In a dynamic travel market, cruises represent 5% of the U.S. total, highlighting not only recovery but also an optimistic trajectory for future growth and sustainability initiatives. Looking ahead, the cruise sector is poised to tackle emerging challenges such as port capacity and environmental impact, with innovative uses of AI enhancing everything from passenger experience to operational efficiency.
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U.S. Packaged Travel Market Report 2023-2027
In 2023, the U.S. packaged travel market recorded a healthy 23% increase as travelers enthusiastically returned to pre-pandemic spending habits. Traditional vacation packagers led this surge, driven primarily by a strong demand for unique and customizable travel experiences. Despite this resurgence, projections suggest restabilization, with growth expected to moderate through 2027. As travel agents reclaimed their pivotal role, contributing significantly to the offline market's growth, the industry nonetheless faces the dual challenge of adapting to direct booking trends and intensifying competition. In this dynamic landscape, travel package providers must innovate and evolve to meet the changing preferences of today’s traveler.
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These reports are part of the U.S. Travel Market Report 2023-2027 series, which features an overview of the U.S. travel market, along with detailed data and analysis of five key segments: airline, hotel & lodging, car rental, cruise and packaged travel. A standalone report dedicated to online travel agencies rounds out the coverage. Collectively, the series provides comprehensive market sizing, projections and analysis for the U.S. travel industry from 2021-2027.
Other reports in the U.S. Travel Market Report 2023-2027 series include: (available now or publishing soon):
- U.S. Travel Market Report 2023-2027
- U.S. Airline Market Report 2023-2027
- U.S. Car Rental Market Report 2023-2027
- U.S. Hotel & Lodging Market Report 2023-2027
- U.S. Online Travel Agency Market Report 2023-2027
- U.S. Packaged Travel Market Report 2023-2027
- U.S. Travel Market Data Sheet 2023-2027 (subscriber only)
Europe Reports
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Spain Travel Market Report 2023-2027
Spain's travel market completed its recovery in 2023, with gross bookings rising 36% to €34.6 billion, positioning it as one of the fastest-growing travel markets in Europe. Online transactions led this growth, advancing to record levels as travelers increasingly embraced digital platforms. The shift towards mobile also gained momentum, reflecting growing consumer confidence, particularly with simpler-to-book segments. Hotel bookings, constituting the lion's share of the market, surpassed pre-pandemic levels significantly. Looking ahead, the Spanish travel market is poised for sustained albeit moderated growth, buoyed by ongoing digital and mobile advancements and challenged by economic concerns.
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Germany Travel Market Report 2023-2027
Germany's travel market reclaimed its position as Europe's largest in 2023, with an 18% increase in gross bookings reaching €68 billion, signaling a full recovery to pre-pandemic levels. Online transactions continued to dominate, driven by robust growth across all travel segments and a significant shift towards direct online sales by suppliers.
Mobile bookings also made substantial strides, constituting 37% of the online market, underscoring the growing ubiquity of smartphones even among the older demographic. The healthy performance extended to various sectors, benefiting from normalized travel patterns. This resurgence marks a pivotal era of digital transformation and re-stabilization in the German travel industry, set against a backdrop of ongoing challenges like inflation and sector-specific strikes.
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Italy Travel Market Report 2023-2027
The Italian travel market exhibited a healthy upturn in 2023, driven by high prices and migration from offline to digital booking platforms. The overall market reached €27 billion, underpinned by a 42% jump in mobile bookings which now represent a significant portion of online transactions. Looking ahead, the momentum is set to continue with expectations of consistent yet moderated annual growth. Future projections are buoyed by key sectors like airlines and hotels, which have effectively capitalized on rising demand and digital advancements.
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France Travel Market Report 2023-2027
France's travel sector witnessed solid growth in 2023, climbing by 12% to over €55 billion, predominantly driven by the resurgence of international travel alongside strong domestic demand. The digital transformation for the French market is evident, with online bookings reaching their highest total to date and mobile transactions constituting 36% of this online revenue. The 2024 Paris Olympics will temporarily amplify gross bookings on all fronts, particularly benefiting the airline and hotel segments through increased international visitation and higher demand in the Paris region. Looking ahead to 2027, the travel market is anticipated to stabilize, reflected in continued but moderate growth as economic challenges and sustainability developments impact consumer purchasing power.
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Scandinavia Travel Market Report 2023-2027
In 2023, the Scandinavian travel industry signaled a robust recovery, with overall gross bookings growing by 16% year over year, highlighting travelers' renewed enthusiasm and a rebound in air capacity. The industry is poised to outpace pre-pandemic revenue levels in 2024, with online transactions leading the charge. The digital shift is evident, as online bookings now account for 78% of the market, with mobile bookings representing a large share of the online pie and anticipated to grow even further. As in much of Western Europe, economic conditions and sustainability considerations will also play a role in shaping the Scandinavian travel market in the medium term.
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U.K. Travel Market Report 2023-2027
In 2023, the U.K. travel market experienced significant growth, with gross bookings increasing 19%, driven by robust expansion in online bookings, mobile transactions, and key sectors like airlines and car rentals. Online bookings continued their surge, highlighting the further shift towards digital platforms and the U.K.’s high online penetration rate. The airline segment performed particularly well, contributing significantly to the market's overall performance. Though challenges like inflation continue to impact market health, the industry is still on a positive trajectory, with moderate projected growth and technological advancements shaping the future of travel in the U.K. through 2027.
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Europe Travel Market Report 2023-2027
Travel demand remained strong for the European market in 2023. Moving beyond the COVID crisis, the market refocused on meeting expanding consumer demand amidst escalating prices. Achieving an impressive 20% year-over-year growth, the market surpassed 2019 gross bookings, outperforming previous projections. However, persistent inflation and economic uncertainties present continuous challenges, poised to influence growth trajectory significantly. Meanwhile, the embrace of technological innovations and sustainability measures is accelerating, and will profoundly impact the European travel landscape in the years ahead.
France Consumer Travel Report 2024
The number of French travelers has reached a new high. Travel incidence also grew across all age groups, and there is strong intention to keep up leisure travel among the French populace going forward. While continuing economic challenges may pose some roadblocks, travel and tourism rank highly for discretionary spend. This report, based on a comprehensive survey of France travelers and those who plan to travel in the future, explores consumers’ trip-planning and purchasing behavior, and their attitudes toward travel in 2023 and beyond.
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Germany Consumer Travel Report 2024
Travelers in Germany rank travel at the top of their discretionary spend priorities. Despite economic challenges, the number of German travelers in 2023 has officially exceeded pre-pandemic levels, and travel incidence continues its upward trajectory. Akin to other Europeans, younger German travelers lead the way with embracing various travel trends, and often showcase the most flexibility. This report, based on a comprehensive survey of Germany travelers and those who plan to travel in the future, explores consumers’ trip-planning and purchasing behavior, and their attitudes toward travel in 2023 and beyond.
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Spain Consumer Travel Report 2024
Younger travelers in Spain are back at it. Both absolute travel spend and percentage of the online population that travel increased in 2023. Though price challenges persist, overall outlook towards future travel also remains largely positive for Spain's travelers. This report, based on a survey of Spanish leisure travelers, provides a comprehensive range of data and analysis on the trip lifecycle for consumers in Spain.
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U.K. Consumer Travel Report 2024
Traveler demand in the U.K. hit an all-time high in 2023. Across all age groups, travel incidence increased and travel spend remains a top priority for Britons. While some economic challenges persist, overall outlook towards future travel also remains largely positive. This report, based on a survey of British leisure travelers, provides a comprehensive range of data and analysis on the trip lifecycle for consumers in the U.K.
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Italy Consumer Travel Report 2024 coming soon
Europe Consumer Travel Report 2024 (Series)
Insights into traveler behavior can help companies keep their pulse on shifts in consumer behavior, identify ways to differentiate themselves and effectively market to various segments. Phocuswright’s Europe Consumer Travel Report 2024 series provides a snapshot of Europeans’ recent travel behavior and sentiment regarding travel. Based on a survey of European (French, German, Italian, Spanish, British) leisure travelers, this collection of reports provides a comprehensive range of data and analysis on the trip lifecycle of consumers in key European markets.
Key questions answered in this report series include:
- What does the average traveler look like? How many trips do they take per year, where do they go, with whom, for how long, and how much do they spend
- What resources - online and offline - do European travelers use to research, plan and book their trips
- How do preferences differ across age groups?
- How do travelers make decisions about various elements (e.g., air, hotel and activities) of their trips
- What role does social media play in European consumers’ travel planning activities?
- What is the sentiment towards future travel? What changes, if any, do European travelers intend to make regarding their future travel?
Travel Innovation and Technology Trends 2024 series
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Each year, Phocuswright's expert analysts identify the technology and innovation trends that will influence travel significantly in the coming year and beyond. In 2024, we’re giving generative AI the attention it deserves. But we’re also bubbling up underappreciated technologies, preparing for a future of digital identities and currencies, and keeping the focus on sustainability.
Here are the six individual reports:
- At a Crossroads: Underappreciated Tech in Travel
- Who Owns the Customer Profile? How About the Customer?!
- Green Dilemma: How Cutting Emissions Cuts Into Corporate Travel
- From Buzzword to Bottom Line: Keeping Pace With Gen AI in Travel
- True Automated AI in Travel Is Coming
- CBDCs Are Coming: Is the Travel Industry (and the World) Ready?
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From Buzzword to Bottom Line: Keeping Pace With Gen AI in Travel
In 2023, generative AI (GenAI) took center stage in the travel industry, driving efforts to optimize everything from customer interfaces to back-end operations. Leading companies including OpenAI, Google, and Amazon, accelerated the development of more advanced language models, influencing travel companies to invest in and experiment with GenAI to address their service and efficiency needs. Despite these advancements, the industry continues to navigate the practical application of GenAI, aiming to maximize return on investment. Consumer acceptance is still mixed, with usage remaining relatively low for the time being. As GenAI technologies evolve, the travel sector is poised to see significant changes in how services are marketed, sold, and managed, making it crucial for companies to stay informed and adaptive to maintain competitiveness.
This article answers the following key questions regarding industry interest in GenAI:
- How has GenAI impacted the travel landscape since its launch?
- What are the most impactful developments of the past 18 months?
- What lessons have travel companies learned in this time period?
- What are the key areas of GenAI to watch in the near term?
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CBDCs Are Coming: Is the Travel Industry (and the World) Ready?
As Bitcoin reclaims its zenith and the buzz around cryptocurrencies resurfaces, the travel industry and global economies face a significant shift with the emergence of Central Bank Digital Currencies (CBDCs). These state-controlled digital currencies aim to meld the efficiency of cryptocurrencies with the stability of traditional banking, presenting a paradox of innovation and control. Amid fluctuating crypto valuations and stringent regulations, CBDCs carve a path toward modernizing payments without relinquishing governmental oversight. Yet, as nations from China to the Eurozone accelerate their CBDC initiatives, questions about digital wallet security, privacy, government overreach and the broad acceptance of such currencies linger. The travel industry, slow to adopt digital payments, now faces the imperative to integrate these developments, which could redefine financial transactions. As CBDCs promise to streamline payments and expand digital inclusivity, the real test will be their integration into the global payment landscape without compromising personal freedom and security.
This article answers the following key questions regarding the development of Central Bank Digital Currencies:
- What are CBDCs, and how are they different from cryptocurrencies and stablecoins?
- What are the benefits and drawbacks around CBDC implementation?
- What’s the status of CBDC programs globally?
- What will the likely impact of CBDCs be on the travel industry, and how can travel companies prepare for them?
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True Automated AI in Travel Is Coming
The landscape of generative artificial intelligence (GenAI) has profoundly shifted since the debut of ChatGPT in November 2022, introducing a new era marked by innovations such as autonomous agents. These agents, capable of performing complex tasks autonomously, signify evolution from traditional AI by eliminating the need for constant human oversight. This advancement poses both opportunities and challenges for the travel industry, where GenAI has begun to reshape everything from itinerary planning to customer service. Nevertheless, scrutiny surrounding these technologies remain, due to the potential for displacement of traditional roles. As GenAI continues to develop, its integration into daily operations and consumer interactions will likely dictate new paradigms in both technology usage and industry standards, promising a future where autonomous digital agents could become as commonplace as personal computers.
This article answers the following key questions regarding industry interest in GenAI:
- How will GenAI-powered automation impact the travel landscape in the coming years?
- What’s the relevance of autonomous agents to travel?
- How will autonomous agents carry out service tasks, in comparison with human agents?
- Who will own the autonomous agents of the future?
- How will automation impact the travel workforce?
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Green Dilemma: How Cutting Emissions Cuts Into Corporate Travel
Corporate travel is still struggling to reach pre-2019 expenditure levels and today's landscape is markedly different, shaped by technological advancements aimed at optimization. Amidst this evolution, sustainability has become a cornerstone, with major companies integrating green practices into their travel policies, reflecting a broader shift towards environmental responsibility. However, this commitment has raised some questions about its genuineness, when considering the range and depth of corporate emission reduction targets, and their impact on the bottom line. In 2024 and beyond, the future of corporate travel will not only hinge on financial recovery but also on the successful integration of sustainable practices, reshaping its framework in an increasingly eco-conscious world.
This article answers the following key questions regarding sustainability developments within the corporate travel sphere:
- How are corporate sustainability measures affecting travel volume and spend?
- What impact does the commitment to reducing Scope 3 emissions have on corporate travel policies and practices?
- What role will regulation play in shaping the future of sustainable corporate travel?
- Are corporations truly committed to their sustainability pledges, and what are the implications for the future of business travel?
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Upcoming Publications
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