Apache is functioning normally

Over the past two years, travelers have packed airports, hotels and destinations with a fervor that earned the post-pandemic trend a label: “revenge travel.”

Demand from leisure travelers soared at hotels in 2022 as travel restrictions subsided. This year, Americans flocked to popular European cities faster than they did in 2019. From June to October 2023, TSA recorded seven of its 10 busiest days ever at U.S. airport checkpoints — and then the all-time single-day record for passenger traffic was set on Nov. 26.

Now, there’s a lingering question as 2024 approaches: Might revenge travel finally end?

Ask 10 people in the travel industry, and you may get 10 different opinions.

At one end of the spectrum, some airlines continue to report that travelers are more than willing to pay for high-end business class seats, especially on long-haul overseas flights.

“Our core customer base is in a healthy financial position,” Ed Bastian, CEO of Delta Air Lines, said during the company’s most recent earnings call (a sentiment United Airlines executives noted on their third-quarter earnings call, too).

Some hotel executives are echoing the optimism. Despite economic uncertainty, “The consumer is still generally holding up well,” said Leeny Oberg, Marriott’s chief financial officer, during the company’s November earnings call.

But other companies are starting to notice some changes.

Some airlines have reported decreased demand in recent months, contributing to financial losses. For instance, Southwest Airlines is pulling back on plans to keep growing its flight schedule in 2024, noting leisure travel trends have looked less strong and more like pre-pandemic times in recent months.

“There is no doubt that there is a slowdown occurring,” says John Grant, chief analyst at travel data firm OAG. “We’re talking about a softening. We’re not talking about a nosedive.”

Though inflation has cooled from its peak in June 2022, many everyday expenses such as groceries and rent remain more expensive than before the pandemic.

Plus, consumers now face high interest rates, resumed student loan repayments and, for many, a smaller pandemic savings cushion, says Cara McDaniel, a professor specializing in macroeconomics at Arizona State University’s W.P. Carey School of Business.

“Life is looking a little less affordable,” McDaniel says. “People, even if they are OK, might not be feeling the urge to splurge. So I imagine that’s going to drag on travel.”

There’s also the theory that a return to more traditional routines is inevitable.

“People traveled more frequently, or spent more on extravagant vacations after being unable to do so during the pandemic. Now, most travelers are reverting to regular travel spending habits,” Emmy Hise, senior director of hospitality analytics at data firm CoStar, said in an email.

She noted that hotels at popular U.S. vacation destinations started seeing demand slide this past spring — though while still outpacing 2019.

According to NerdWallet’s most recent Travel Price Index, the overall cost of travel in October was down about 2% from the same month in 2022, helped primarily by cheaper airfare.

As airlines have hired staff and brought planes back into service, the supply and demand equation is more favorable for consumers than it was a year or two ago.

During this fourth quarter of 2023, the eight largest U.S. carriers are flying with nearly 17% more seats compared with the fourth quarter of 2021, according to airline scheduling data from aviation analytics firm Cirium.

To entice travelers to buy tickets, Southwest executives told analysts they’ve had to offer cheaper tickets on less crowded days like Tuesdays and Wednesdays. Other airlines (particularly low-cost carriers) have offered steep discounts and promotions of late, too.

For travelers, more approachable prices could be reason enough to book another trip.

Several industry leaders have also cited an enduring willingness from consumers to spend on travel and sacrifice other purchases instead.

Michael Daher, vice chair and U.S. transportation and hospitality leader at consulting firm Deloitte, said in an email that his team has tracked an “overall decline in financial well-being” over the last year, including still growing concerns about savings.

But, he added, the company’s survey data also suggests consumers hope to travel nonetheless, perhaps merely electing to fly on a cheaper ticket type, like basic economy.

“We may be moving from ‘revenge travel’ to a period of reprioritization that values travel highly,” Daher said.