Question of the Week

What Is the Future of Travel in 2022?

March 14, 2022 BU Today Season 1 Episode 14
What Is the Future of Travel in 2022?
Question of the Week
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Question of the Week
What Is the Future of Travel in 2022?
Mar 14, 2022 Season 1 Episode 14
BU Today

In the aftermath of two years of pandemic disruptions to the hospitality and tourism industries, Makarand Mody, an SHA associate professor of hospitality marketing, sheds some light on the future of travel in 2022. Mody discusses flexcations, the popularity of AirBNB and VRBO, the return to city tourism, and more.

Show Notes Transcript

In the aftermath of two years of pandemic disruptions to the hospitality and tourism industries, Makarand Mody, an SHA associate professor of hospitality marketing, sheds some light on the future of travel in 2022. Mody discusses flexcations, the popularity of AirBNB and VRBO, the return to city tourism, and more.

Dana Ferrante: This is Question of the Week from BU Today. What is the future of travel in 2022? 

With COVID restrictions loosening across the country, many industry experts predict that travel will return to pre-pandemic levels in the coming year, with people taking big ambitious trips after two years of being stuck at home.

But the travel industry is not the same as it was, and people's attitudes towards travel changed greatly during the pandemic. Destination road trips surged. The ability to work and learn remotely prompted people to book flexcations. And hotels continued to battle with sites like AirBNB and VRBO for reservations.

To understand how the travel industry is changing, BU Today executive editor Doug Most spoke with Makarand Mody, an associate professor of hospitality marketing at the School of Hospitality Administration, who shed some light on the future of travel in 2022 and beyond.

Doug Most: Makarand, thank you for joining us today.

Mody: Thank you for having me, Doug. Pleasure to be here.

Most: So let's start with a really big, broad question: the future of travel. What do you see as the future of travel given where we've just been for the last two years, which is essentially in our living rooms on our couches?

What do you see as the future of travel?

Mody: That's a great question Doug, and I think to look at the future of travel we have to look at the past as well as sort of where we're going in the future. I think the future of travel is going to be determined by two factors really.

The first is the demand side of the equation, which is us as travelers and as consumers. Like you said, we've been restricted to our homes, to our couches, for the last couple of years now, and that naturally leads to a lot of pent-up demand for travel. I think also people have been reevaluating their lives and what's really important to them in the last two years, and travel seems to have emerged as one of those things that people don't want to push [out] too much longer—be it to meet family and relatives or sort of that dream vacation that you've been planning for a while.

So I think we'll see some of that emerge. We have seen it already. The hospitality and travel business did see a fairly successful rebound in 2021 and I anticipate that that will continue in 2022. Of course, there's a lot happening in the world that does moderate that to some extent, politically and economically.

But I do think that pent-up demand is going to lead to a strong year for the industry. The other side of the equation, like I mentioned, is the supply side. And 2020 was a really hard year for businesses in general, from a revenue perspective, from a labor perspective.

We saw some of that rebound in 2021 as well. We still see businesses, in a sense almost struggling to keep up with demand in so many ways. But I think 2022 and 2023 will be those years of stabilization, and I think we'll see the resilience of the industry as it bounces back.

I think COVID sort of put some things into perspective for the industry. We enjoyed 12 years of solid growth before 2020 and then the pandemic hit. I wonder, just with issues around climate change and geopolitical tensions globally...I think we're going to see a lot more of that in the next 10 years than we perhaps did in the last 10.

So I think, just from a longer term future perspective, I think the industry is going to have to prepare, at least on the supply side, the business side, to be more resilient than it perhaps did from 2010 to 2020.

Most: Are there certain types of trips that you think people will be taking, especially in the early weeks and months coming out of this pandemic?

There seems to be—and maybe this is not surprising—an ambition for big trips, with people sort of like: "I just spent two years indoors, I saved a lot of money by not traveling. I want to spend, I want to go, I want to do." Do you think there is going to be that pivot to big ambitious trips right off the bat? Or do you think it's going to be smaller trips, and road trips, maybe not quite as ambitious?

Mody: Well I think for the last two years we saw a lot of the less ambitious travel actually happen. So the road trips, the trips within the state, states nearby, something that you could get to easily to a space that you could potentially isolate and still be away from people.

I think this idea of getting on a plane is not as foreign to us anymore as it perhaps was last year even. People are feeling a lot more comfortable, particularly if you are vaccinated and boostered, to get on a plane. Just from my own life, my neighbors who have two young boys, they got on a plane and went to Aruba for 10 days this week.

They felt like they were confident enough with the vaccines, but also having contracted COVID a couple of months ago. So I think we'll see some of that, some of the bigger trips definitely start to happen and there's an appetite and also people have saved up money. So you'll see some of that pent-up spending as well.

Most: There's been a new term that has evolved in the last couple of years—again, with the remote learning and the remote work environment that we're all experiencing now—called flexcation. And I'm wondering if you can talk a little bit about that: whether this is something that we're going to see long term...?

Mody: It's interesting, Doug, and that certainly seems to be something we're seeing now and we will see for the next couple of years perhaps. My hypothesis here, though, is: I wonder how soon that actually catches up with people. One of the things the pandemic has done is, and we've all experienced it, it's blurred the lines between work and personal life, because we're working all the time but we're also at home all the time.

I wonder to what extent that will catch up with people. When I'm on vacation, I want to be away from my laptop and I want to be away from being at work and I just want to look at the sunset at the beach. So I think we're doing some of that now for sure.

And particularly with remote work, there's a length of stay element that comes in here. If you are planning on staying at a destination for longer, where you think you're going to be traveling for a month, it is harder to obviously not be working for a full month. So I think we'll see some of the work happen in those situations, but for the traditional vacation—let's say I'm going away for five to seven days—I think those are opportunities that people would like to use to completely dissociate from work and just disconnect.

Most: Certainly before the pandemic we had already seen the explosive growth of sites like AirBNB and VRBO. I'm curious if you think the pandemic will accelerate that, or do you think you might see people starting to go back to the hotel and the resort stays?

Mody: We've been doing some research around this to see how people's choices between hotels and AirBNBs changed during the pandemic and how we think it's going to evolve in the future.

Undoubtedly AirBNB did see that bump up, right? Their recovery was super strong compared to even hotels because people wanted that privacy. People wanted the space. They didn't want to be encountering other guests as they would at a hotel, but you do that long enough, and I think we're at a point in society where people are craving that social connect again, people are craving that contact.

We want to be around other people and we're more comfortable doing that, and I do believe that hotels and sort of more of the traditional hospitality industry does have the opportunity to offer that to a better extent than AirBNB does. AirBNB has this narrative around connecting with places and people where you travel, but the reality is if you're staying at a home in all likelihood, it's going to be owned by a host who you'll never meet.

You're not really going to have extensive local contact, you aren't necessarily embedded in the local community, the local neighborhood necessarily. I think hotels have had those strengths for a long time, and I do anticipate that we'll see people craving that social connection a little bit more, which I do think works out for hotels and the traditional hospitality industry better over the long run.

Most: Last, I just would like to talk for a minute about city travel versus more adventure travel and resorts and that sort of thing. I have not personally been to New York City in more than two years, and my family, we love going to New York. But I've said to myself that I don't want to go back to New York until I'm really comfortable that I'm going be able to enjoy New York the way I want to enjoy New York.

I want to be able to do everything with a lot of freedom, and if I have to go back and really feel restricted, it won't be as fun. And I'm curious if you think that people traveling to cities is perhaps going to lag behind some of the other types of vacations, or do you think people are ready to go back to big cities for vacations?

Mody: I'd say it's a little bit of both. I think there was a little bit of a lag for sure in 2021, where people were still not 100 percent certain about going to the cities, and to your point, whether they'd be able to enjoy the city in the same way.

Now, that said, I was actually in New York City around sort of the middle of December last year just a little bit before Christmas, and Doug, the city was packed. There was travelers from all parts of the country, but also seemingly a lot of international travelers as well.

And that's just New York City as an attraction, what it has to offer, particularly around Christmas. We were bumping shoulders with other people trying to see the tree at Rockefeller Center. So I do think, particularly as we go into 2022, if we do see a little bit of a dip in cases worldwide, I do think cities are going to make a comeback.

US cities are certainly making a strong comeback, given where we are with vaccinations and cases. I do anticipate some of that is going to spill over into cities internationally. Cities are strong attractions for tourism. The Parises, the Londons of the world, those are always going to be strong tourism destinations.

I think 2022 is going to be the year where we start seeing perhaps even close to pre-pandemic levels of travel to some of these destinations. Of course, again, I say that keeping in mind everything that's happening geopolitically, that's had a major hit on travel to Europe, in particular.

Most: Well, this has been super enlightening and makes me think about our own vacation we've got planned, and maybe it is time we got back to New York. I'm ready to go!

Mody:  Sure, sounds good, Doug, and hope that dream vacation happens soon for you guys.

Most: Thank you very much.

Ferrante: Thanks to Makarand Mody for joining us on this episode of Question of the Week. This episode was hosted and edited by BU Today executive editor Doug Most, engineered by Andy Hallock, and produced by me, Dana Ferrante. Thanks for listening and see you in two weeks.