Leisure travel demand: From ‘revenge’ to reprioritization

The travel industry enters 2024 on a wave of strong performance.

Deloitte’s consumer surveys projected that Americans would travel

enthusiastically in 2023, and industry metrics indicate that they did.

From January through November 2023, TSA-reported passenger

throughput was up an average of 12.5% year over year. And in

November, STR and Tourism Economics projected that full-year

revenue per available room would rise 4.8% year over year.1

Leisure travel seems to have put recent historic lows in the rear view

and once again returned to consistent annual gains. But will this last?

Many worry that the unleashing of pent-up demand in the wake of

the pandemic may have run its course. Amid economic challenges,

travel might soon be subject to tighter budgets for consumers and

corporate buyers. And even if economic conditions improve, could

travel spending be due for a correction?

“Revenge travel” was indeed a major driver of demand for two years, as

Americans shook off prolonged restricted movement, health concerns,

and uncertainty. In 2021, nearly half of summer travelers said the need

for an “escape after lockdowns” motivated them to take trips. In 2022

and early 2023, many said they were “making up for trips I didn’t take

due to the pandemic.” But the revenge effect has declined steadily

(figure 1), and by the 2023 holiday season, just 11% said they were

making up for missed trips.