(Bloomberg) — Expedia Group Chief Executive Officer Peter Kern believes that 2023 will be the year that we stop predicting a travel recovery and actually start enjoying it.
But before then, he forecasts something bolder: “Summer 2022 will be the busiest travel season ever,” he tells Bloomberg, speaking over Zoom from his home in Wyoming.
“We’ve been talking about pent-up demand for a long time, but until now there have been too many restrictions in place for people to do too much with it,” he explains. With Europe expected to relax restrictions, mask mandates falling even in liberal U.S. states, and borders reopening in parts of the world such as Australia that had not yet welcomed back international tourism, many pandemic-era travel barriers will start to recede.
It’s not just the ease of travel that will portend its comeback; it’s the combination of high volumes and high prices.
“Airlines are expecting to be back to historic levels by August,” Kern continues. “And yes, prices will be high. But at this point, I think people are willing to pay whatever the hell it takes to get away and go to a place they want to go.” After all, he explains, a part of pent-up demand is pent-up savings—people tired of spending on material home goods are ready to shell out for experiences, be it in cash or loyalty points that have been gathering dust since 2020.
As for where they might be going, Kern is looking at cities. “People are tired of going to national parks. They want to go to New York and go to a Broadway show,” he says, adding that cities in Europe with loads of cultural attractions and dining options—think Florence, Paris, London—will also sustain enormous demand.
Bold Claims Across the Industry
Kern isn’t the only one who sees a big summer season. On Feb. 9, the World Travel & Tourism Council (WTTC) updated its economic modeling with predictions that U.S. travel and tourism would exceed pre-pandemic levels by 6.2%, accounting for almost $2 trillion in U.S. gross domestic product. In Europe, the council’s data shows that summer 2022 bookings have already surpassed 2021 levels by at least 80%.
Misty Ewing Belles, vice president of travel agent consortium Virtuoso, has seen that firsthand, telling Bloomberg this week that summer bookings are already accelerating, bucking the trend of last-minute travel that dominated the past two years of pandemic uncertainty. In the U.K., where vaccinated travelers no longer need to provide pre-arrival Covid-19 test results, Ryanair’s Michael O’Leary recently said that he expected summer 2022 to yield 115% of the passenger volumes that the airline recorded pre-pandemic, in 2019.
For parts of the world where movement was more limited in 2021, travelers are especially keen to make up for lost time. According to Expedia data, nearly a third of Australians have at least three trips planned for 2022.
Summer Highs
Kern says that summer is traditionally the busiest and most profitable season for Expedia, as well as for the broader travel industry, by a “meaningful” margin. And while he’s made similar claims in previous pandemic cycles, there are reasons to believe 2022 will be different.
As more governments shift to treating the pandemic as endemic, he says, the rise and fall of restrictions—and changing entry rules—ought to become simpler. As a result, Kern expects that any future wave of infections would hamper tourism less as governments and their citizens become “increasingly numb” to combating the pandemic. “With each wave that comes up, they’re asking, ‘How big of a fight am I going to start this time?’”
Just like last year, when European governments felt the pressure to save their busy summer seasons by reopening borders with testing and vaccine requirements just ahead of Memorial Day in the U.S. (May 30 this year), it’s once again expected that governments will do whatever it takes to ensure that summer travel goes off without a hitch. The European Union’s talks of reducing restrictions in recent weeks, for instance, has had the strategic advantage of help to inspire the confidence of airlines that have yet to reintroduce their long-haul transatlantic routes. Encouraging them to add that capacity before too many travelers set their summer plans in stone could help normalize prices and see international travel rebounding.
And the fact that many workers remain flexible in their schedules—though constrained to their kids’ school vacations—means that taking extended time off during summer holidays should hold wide appeal.
“You could go through that whole thesis about how people are working from anywhere and untethering from the traditional calendar,” Kern says, taking direct aim at his rival, Airbnb’s Brian Chesky. “But in the summertime kids are out of school and the weather is good, so everybody goes everywhere—summer will always be summer.”
The Caveats
Kern is quick to caution that this doesn’t mean the travel industry will recover evenly. The cruise business, for instance, will take longer to recover than hotels or airlines, simply because of how long it has shouldered heavy restrictions from the Centers for Disease Control. Regionally speaking, Asia and Latin America are unlikely to see strong bounce-backs in 2022, because of both tighter lockdowns and higher ongoing caseloads, he says. Business travel is still lagging significantly.
Families with kids under 5 and immunodeficiencies will likely also travel differently, he says: “They’ll make some different decisions, maybe they’ll rent a VRBO at the beach instead of going to Paris and walking around. But, you know, people are eager to go somewhere. So I think people will find a way to get around.”
Asked if there’s anything else that might threaten his vision of a golden summer, Kern sticks to his convictions: “We’re pretty leaned in.”
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