The United States Tour Operators Association (USTOA) recently released the findings of its annual travel trends and forecast of the association’s active tour operator members, affirming a positive outlook for the industry in the year ahead.
According to the survey results, announced at the 2023 USTOA Annual Conference and Marketplace in Los Angeles, December 2-6, nine out of 10 members (92 percent) anticipate growth in sales in 2024. Two-thirds (63 percent) of those respondents are “optimistic,” forecasting a “boom year” with growth anywhere from 7 percent to 10 percent and higher. Similarly, 90 percent of members anticipate growth in passengers next year.
Terry Dale, president and CEO of USTOA said, “Our tour operator members are very positive, if not enthusiastic, about business growth in the coming year, with 86 percent highly confident to confident that guest bookings will increase in 2024. That’s an encouraging sign, showing us that all the post-pandemic built-up demand isn’t slowing down quite yet.”
USTOA’s tour operators also recounted healthy growth for 2023, with 94 percent of respondents reporting improved sales, with the remaining 6 percent reporting that 2023 sales numbers remained flat from 2022. Of those reporting growth, three-fourths said that their sales increased 10 percent or more. Nine out of 10 (94 percent) showed a growth in passengers in 2023, with three-fourths (73 percent) reporting numbers 10 percent or better.
In 2023, close to nine out of 10 members (86 percent) increased their staffing levels. Another 12 percent maintained current staffing levels, meaning only 2 percent cut back on staff this year. Of members who increased staffing, almost half (48 percent) reported an increase of one to 10 positions, while nearly a quarter (22 percent) of those members added between 51 and 100 positions. Roughly 18 percent increased positions by 26 to 50 employees, while the remaining 12 percent added 11 to 25 positions.
Looking ahead, two-thirds (63 percent) of USTOA tour operator members plan to increase staffing levels in 2024, while roughly a third (35 percent) plan to maintain staffing levels. Of those planning to add jobs next year, more than half (59 percent) are planning to increase their headcount by 1 to 10 positions, while a quarter (27 percent) plan to increase staffing by 11 to 25 positions. Another 7 percent plan to add 26 to 50 positions and the remaining 7 percent anticipate adding 51 to 100 positions in 2024.
Travel Advisors
Reinforcing the significant contribution travel advisors make overall to USTOA members’ businesses, 88 percent of responding members plan to utilize travel advisors to generate sales in 2024. Eight out of 10 USTOA tour operator members (80 percent) say that travel advisors will play a very important to important role in their business in 2024. For the year ahead, nearly all members (98 percent) anticipate business booked through travel advisors to increase or remain the same in 2024.
Global Risks
While the active members of USTOA view the upcoming year with optimism, they also addressed the potential threats to travel confidence in 2024. Economic uncertainty, which also includes global financial instability and the strength of the dollar, topped the list of biggest threats for next year. The cost of living followed in second, moving down one spot from last year’s survey when members were asked a similar question. Terrorism followed in third. Dale added, “Given recent world events, it is not surprising that financial considerations and terrorism top the list of global concerns for our tour operator members.”
Travel Trends
Italy was named the most popular international destination for travelers in 2024, followed by France, then the United Kingdom and Spain tied at third. Domestically, California was named the most popular U.S. destination that travelers are booking for 2024. Alaska came in second with New York rounding out the top three list.
When asked which products have the strongest passenger growth trajectory for 2024, small-group tours topped the list. Dale stated, “Our members have been reporting small-group tours as an emerging trend since prior to the pandemic. This only reinforces it’s continued popularity.” Private groups ranked second, followed by FIT, classic group tours, river cruising, small ship cruising, solo travel and ocean cruising.
USTOA also asked its members what the strongest influence on consumers will be in choosing where to go in 2024. Value ranked the highest. Dale explained: “This certainly complements the leading threat of economic uncertainty our members identified, as, clearly, consumers are going to be paying stronger attention to value as it relates to any large purchase including travel.” Distance or ease of travel to and from a destination was named fourth, followed by sustainable tourism practices and potential overcrowding in sixth.
Artificial intelligence (AI) continues to be a growing topic among the travel and tour industry. More than half (55 percent) of USTOA tour operator members view AI as an opportunity for their business, while the remaining 45 percent are not sure yet. A quarter (28 percent) of members are currently using AI as part of their business practices, while a third (39 percent) plan to use it in the future. Of those active members that said they are currently using AI in business practices, a majority are using it for marketing and social media. Custom service and data/analytics/business intelligence tied at second highest use, followed by content and image creation in third.
This survey was conducted between October 5 and November 6, 2023, with a 94 percent participation rate. For more information on USTOA, visit www.ustoa.com.
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