USTOA: Optimism but challenges for tour operators in 2023

AUSTIN, Texas — The USTOA said its tour operator members were optimistic about travel demand remaining strong in 2023 as businesses move away from touch-and-go recovery efforts and transition back into growth mode.

But a variety of factors that emerged in 2022 can still pose a threat to travel next year, which is why the organization has a cautiously optimistic stance about travel heading into the new year.

“We’ve heard about ‘travel is back,’ and it is,” said Terry Dale, the CEO of the USTOA, during the organization’s annual conference here. “Fifty-five percent of our members expect double-digit growth next year, which is great, and almost 25% are optimistic, with single-digit growth. So if you combine those two for 2023, it looks good. However, we’ve all been through this dance before, and we get thrown something tomorrow or today and it turns our world upside down.”

Cost-of-living increases, continued public health crises like Covid, staffing shortages and the war in Ukraine were among the top risks that tour operators identified that could threaten travel in the next three years, according to the USTOA’s recent economic impact study, which was conducted between August and the beginning of October.

The study found that 67% of members are “very and extremely concerned” about cost-of-living increases that could make travel for some demographics harder to afford, while a little more than half of members surveyed saw global economic instability as an impediment to travel.

But for consumers who can afford to travel despite global and domestic financial fluctuations, travel economy experts said those factors may not have a significant impact on travel habits.

“We had an economist speak about the recession, and for [USTOA members’] particular segment and demographic profile we have higher income and a slightly older population who have more savings, so they have the means,” Dale said of one of the conference sessions. “He didn’t really see it as going to significantly impact us.”

Widespread staffing shortages are another trend that multiple tour operators at the conference identified as a challenge that will likely cross over into 2023, but more are working to adapt to those conditions.

“While it was difficult in 2022, I think everyone learned the value of staffing and the importance to not be caught behind the ball in the meantime,” said Steve Born, the chief marketing officer for Globus. “So it’s on us to make sure that we are being aggressive with staffing numbers and preparing for what we expect to be good demand in the first quarter. We’ve done that.”

Born says that Globus has added over 60 associates in its call centers over the past few months to stock up for the next wave of travel demand, and that the company is now fully staffed across the board. 

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