Late-season challenges in 2023 that are threatening the strength of first-quarter bookings for 2024 will not dampen the optimism tour operators have about travel's outlook for next year.
Staffing levels have been rebounding; many suppliers saw growth in sales and passenger volume; and the strength of further-out bookings are signaling to tour operators that travel overall is expected to thrive in 2024.
"We've had our best advanced year in the history of the company," said Jennifer Tombaugh, president of Tauck. "We're seeing demand already into 2025. Our overall staffing levels, both internally and with our partners, are not quite back to 2019 levels but getting there. So we're seeing all signs point in the right direction."
Both the USTOA and the National Tour Association (NTA) said that staffing levels, a pain point for many suppliers at the beginning of 2023 and since the pandemic, are rebounding industrywide. An NTA survey showed that 43% of operators report having 100% or more of the employees they had in 2019, while 63% of USTOA members plan to increase staffing levels in 2024, coming off a year in which 86% of members added employees.
Still, the impact of the Israel-Hamas war on bookings and the ripple effect it's having on a range of destinations is already proving to be of slightly greater concern to suppliers than other challenges facing travel in 2024, such as clients' financial instability and increased cost of living, at least for the time being.
Bookings are in sharp decline for Egypt and Jordan through at least the first quarter of 2024, suppliers say, with some reporting the decline stretching further into the year.
The war between Israel and Hamas has been suppressing bookings to destinations like Egypt in 2024. Photo Credit: Nicole Edenedo
Intrepid, Globus, Alexander + Roberts, TTC Tour Brands, Tauck, Collette and Pleasant Holidays have also all reported some kind of impact from the Israel-Hamas war -- be it softened demand or increased cancellations for trips to Egypt, Jordan and other regional destinations, such as Morocco, Turkiye and even, to a lesser extent, parts of Europe.
Despite the fallout, most suppliers say many travelers with trips booked to these destinations in 2024 are pushing their dates, which is a sign that people are still determined to go -- at some point.
Positive areas of growth
There are plenty of bright spots on the horizon for travel in 2024 among the tour operator set.
While city trips are expected to continue their strong return in 2024, travelers still seem to favor beach vacations, primarily in destinations like Mexico and the Caribbean, the latter of which saw record growth in 2023.
"We expect the Caribbean to have a record year in 2024 and exceed 2022 and 2023; we are already seeing it up in the high double-digits for 2024," said Jack Richards, CEO of Pleasant Holidays. "Carriers are adding lift. Airlines are putting additional flights in the Caribbean for 2024, which is good news."
Europe, unsurprisingly, is projected to remain a strong destination for travelers industrywide, according to this year's USTOA annual survey of active members. Italy, France, the U.K. and Spain were all highlighted as the European destinations most in demand among travelers for 2024.
Demand is also high for Asia, with destinations like Japan, South Korea, Vietnam and Thailand doing exceptionally well for a number of suppliers, including Pleasant Holidays, which said it is seeing triple-digit growth there as well as in Australia and New Zealand.
And family travel, primarily multigenerational travel, along with small groups, are some of the most popular trip types that suppliers say saw high demand in 2023 and are expected to continue strongly in 2024, with an even greater emphasis on customization.
"We see 2024 as being the year family travel becomes all about hyper-personalization, really getting to know clients and their intent ... to plan something no other family will experience," said Geordie Mackay-Lewis, co-founder of Pelorus.
"Time off is precious, and it needs to be spent on experiences and memories that will be treasured for a lifetime."