Impact of inflation on travel and tourism industries across the world
The travel price index (TPI) published by the U.S. Travel Association gives an overview of the monthly price changes across different travel and tourism industries in the United States. According to the July 2022 TPI, the transportation segment was the main driver of inflation for the U.S. travel and tourism sector, with the price index of airline fares rising by 27.7 percent over the previous year. In contrast, lodging experienced a moderate year-over-year increase, with the price index growing by just 1.3 percent. Meanwhile, the inflation rate of hotels, motels, and similar accommodation establishments in European Union member countries peaked in June 2022, growing by 22.4 percent compared to June 2021.When focusing on food and drink services, even though the inflation rate of restaurants, cafés, and similar services in the EU has increased significantly since December 2021, it did so at a slower pace than other tourism industries, recording a 12-month growth of 6.9 percent in June 2022. That month, the United Kingdom experienced a similar trend, with the consumer price index of catering services reporting a substantial year-over-year increment (7.4 percent) but remaining lower than other inflation rates of travel and tourism services in the UK, such as air passenger transport and accommodation establishments.
Impact of inflation on travel planning and behavior
With the cost of travel and tourism services going up and consumer spending power going down, travelers worldwide are inevitably considering the risks caused by high inflation and adjusting their plans accordingly. In a May 2022 poll on the impact of high prices on summer travel plans in the U.S., nearly a third of surveyed Americans intended to use alternative means of transport instead of flying. As of the same month, a survey on the effect of inflation on summer trips in Spain revealed that 40 percent of interviewed Spaniards changed their original holiday plans and looked at more affordable experiences.On the other hand, an April 2022 study conducted in selected global countries focused on consumers willing to give up non-essential activities to fund their next vacations. Based on the survey, six in ten Britons would cut back on nights out to save for their next holiday trip, while 58 percent of respondents in Japan would give up gym memberships. Overall, regardless of whether people are considering to change their travel plans or not, inflation is becoming a major cause of distress among leisure and business travelers. For instance, the rise in the overall cost of travel due to inflation was Europeans' main concern about trips within the region as of May 2022. Meanwhile, 37 percent of surveyed travel suppliers worldwide considered inflation the main obstacle for business trips as of June 2022.
