2022 was a surprising year for many. Leisure recovery came stunningly fast as travel proved to be one our planet's most important endeavors, even in the midst of pandemic and war. So what does 2023 promise? WTTC predicts the global travel industry will produce US$12 Trillion, eclipsing 2019, on the way to US$14 Trillion by 2025. But beyond economic growth, substantial changes are coming to our industry that will change everything from supplier networks to key influencers to how we move through the travel experience.

Five 2023 predictions:

1) Travel will, once again, grow beyond the forecasts - Ongoing medical crises and military conflict remain along with softening economic conditions that have brought declining household savings rates and continued high prices. But when you examine data about the true travel spenders and recognize the health of global business it means our industry will produce growth this year.

Asia is awakening. China represented 155 million international travelers in 2019, which dropped to an average of just over 20 million the last two years. If you think "revenge travel" was a thing in the US, just wait. Parts of Europe, The Middle East (especially Saudi Arabia where tourism investment is staggering) and Australia have a great deal to gain here, but it could lead to challenges for suppliers if they are caught unprepared again. Don't be surprised to see 200 million Chinese travelers in 2023, even with some short-term Covid restrictions in place. Urgent call to action - The in-bound American tourism market is ready to take off, but the U.S. Government is risking billions because of a broken travel visa approval process. The wait times are untenable and I recommend everyone reach out to their Congressperson.

Travelers aren't concerned with safety, they're concerned with price. Our traveler surveys have shown a consistent rise in the focus on price and that will continue. Covid and global conflict are no longer in the top five considerations. Instead, a desire for value and price to come back in line are the headline. Even for affluent travelers ($250kUS HHI), who will index at 220% of overall 2023 leisure travel, value will be more important. Discounting will be necessary in most supplier segments to build volume increases from 2022 levels. 

Interestingly this provides a challenge in the green travel movement because 74% of travelers expect sustainable actions in their brands but aren't always willing to pay for it (20%). This will likely be a persistent view in a more price sensitive environment as Barry Diller's cynicism suggests during his on stage Skift comments.

Business transient and group travel are much stonger than "experts" predict. Meeting planners, attendees and corporate decision makers are placing a priority on bringing together teams and clients. 83% of workers expect to take a business trip in the next six months and T&E spending is up 57% over the last three months. According to American Express, 97% of planners say meetings are "as or more important than in 2019" and 94% of planners who held past virtual meetings now plan to host in-person. Even CEOs are sounding a positive tone in terms of corporate travel investment as noted by Mastercard CEO, Michael Miebach .

Cruise demand is stronger than ever. A major false narrative during Covid was that people no longer wanted to cruise. While operators were forced to shut down for over a year, customers never lost their appetite for the cruise experience. In MMGY's last wave of Portrait of European Travellers, more than half are considering a cruise for 2023. We see similar demand levels in the U.S., including amongst younger travelers who seek multiple destinations within the same trip. These dynamics, combined with travel agent influence, will drive record cruise revenues in 2023. 

Work From Wherever becomes "Bleisure" again. Prior to 2020, 35% of travelers mixed business and leisure travel, so the last two years were not a completely new paradigm. As employers demand more standard office schedules, the use of long-term rentals and vacation destinations for home offices will decline. The four-day weekend phenomenon will also soften though leisure will remain strong with work week bookend trips and "extended peak" leisure seasons, albeit in numbers below 2021-22.

US Travelers will become more domesticated while the rest of the world takes more international trips. Americans propped up Europe in 2022, but on the margins that demand will revert to US cities, domestic long-haul and Caribbean destinations in 2023. Western Europeans and Asian source markets will drive new international air demand while we expect Africa and Eastern Europe to continue to struggle for relative share. The U.S. and Latin America will see continued growth, the former with more commercial business and the latter from intra-continent leisure.

Underrepresented travel communities will command more attention. Thanks in part to research done by MMGY Global and others, there is a heightened awareness of both the economic value of non-traditional travelers and what they expect from an experience. Including the traditionally under-valued Black and Latino travel segments plus an enlightened understanding of the LGBTQ+ and special needs communities, industry players are doing more to support and market to these lucrative and travel hungry groups.

2) Major industry consolidation will affect travel in meaningful ways - We know that softer economies often mean a search for margin and innovation through alliance.

There will be an airline acquisition. And I don't mean the JetBlue/Spirit deal, which still faces major regulatory challenges. So instead maybe think about an Alaska buying Hawaiian, a Japan Airlines rolling up ANA or a mainline US carrier buying a regional operator. The predicate for these deals is pilots, distribution and slots without reducing competition in the LCC space.

And maybe a hotel brand deal, too. Hyatt has quietly been rolling up brands and product lines, such ALG and Dream Hotels, and Highgate just bought Viceroy. And of course the newly made Sonesta went through a massive consolidation over 24 months (which has been surprisingly low key). But what about a super-deal in lodging? Airbnb buys Hilton? Or IHG merges with Choice in a major public deal? Is scale going to be most possible through M&A or internal capital investments?

Other possible deals? - Will there be more rental car aggregation, perhaps with Sixt or Fox being acquired? I could even see Lyft swallowed by a company in or outside of traditional travel. Will the vacation ownership industry come together further, both on the front-end of brand and the back-end of inventory management services? I am curious to see what moves Travel + Leisure might make. Even financial companies, such as Chase, could invest more in travel with a booking integration or loyalty acquisition.

For the fourth consecutive year, I am predicting consolidation in the OTA space - can Amazon buy Expedia already? Or maybe TripAdvisor finally surrenders to an acquirer. If online intermediaries, who have done better in recovery than I expected, want to continue to compete with social influence engines, Google & suppliers themselves, they have to aggregate in some way. I'm suggesting 2023 is the year for one of these mega deals.

3) The travel influencer and marketing landscape will become even more confusing - From traditional OTAs and social networks to artificial intelligence and data driven marketing, the marketplace is more fragmented and harder to truly measure.

While Covid brought about the rapid growth of streaming services (now five per household), post Covid will mean some players disappear. Platforms are losing money and MAUs are flattening. The massive budgets required for top line content combined with the fragmented advertising landscape have made profits elusive so far. Even the strongest entertainment brands have seen this challenge, evidenced by Bob Iger's return to Disney and the struggles of Netflix and Warner Brothers to make the model work.

TikTok will not be banned in the United States despite the political (and perhaps very real) concerns about Chinese surveillance and data harvesting. It has been head spinning to watch how rapidly TikTok came to dominate content distribution. TikTok’s parent, ByteDance, is worth more than Disney, Snap, Pinterest, Twitter, IPG, WPP, and the Omnicom Group combined. Its users are spending 100 minutes/day on the platform and TT is now the #1 social influencer of travel decisions. So broadly it is too late to put the TikTok genie back in the bottle. I expect a compromise to be found in the way the app is policed vs a dismantling of its core popularity. As a side note, I am curious if certain state tourism offices will be disallowed from advertising on TT (and even prohibiting staff use) based on their leader's politics.

Airbnb will remain the thorn in the side of hotel brands and other intermediaries. Though it will be difficult to grow inventory and stay share at current rates, Airbnb's balance sheet allows it to now invest in tech and product experience as well as other sources of content that build user loyalty. Though I can't totally agree with NYU Professor Scott Galloway's claim that Airbnb is the "strongest hospitality brand in modern history," its influence will continue to be substantial in 2023. 

Transactional bots will take another step forward. More and more functional elements of booking and customer service have been mechanized these last few years, with solutions such as KLM's polygot ticketing system, Amtrak's Julia and Amex's Claire for agents. Now, the era of frictionless travel ushered in by Covid will lead to more advances in check-in, expedited security, amenity curation and pricing. I'm most interested to see how blockchain, big data, RFID and AI connect to create bespoke closed-user-groups (CUGs) for packaging across travel. Keep an eye on two trends in this space: Travel digital layaway plans (BNPL) that are AI enabled, such as India's Sankash ; and packaging engines that tie VR to customized travel, sort of a WithinVR meets Pathfndr , where trends in food, wellness and sustainable travel can be nurtured and booked.

Open AI is a big deal and will become a bigger part of how travel stories are told. The "Generative" area of AI, with apps such as ChatGPT and DALL•E, allow storytelling and automated rendering that will enable travel to promote in a new, dynamic, virtual space. Many innovations are being developed in booking and loyalty tech such as the recent work by Liferewards.ai . You should also take a read through this masterful interview by Skift's Rafat Ali with author David Mattin about the prospects for Generative AI.

Revenue attribution is difficult, whether it be multi-touch, last click, booker vs influencer, etc. Performance is hard to quantify in the open, highly dis-intermediated travel marketplace. Maybe that is why Booking is investing to connect trips or why Facebook continues to offer transparency tools to measure ROI (vs Google who seems to be making it more opaque). But are big guys vulnerable to supplier direct share shift or new technologies such as Blockchain that better quantify revenue sources? Probably not in 2023, but many in the industry believe long-term shifts in Web 3.0 could re-shape intermediary roles.

Travel agents and 'human' customer service will grow. Traditional intermediaries will move more volume in 2023, both in leisure and commercial travel. MMGY Travel Intelligence in the European market shows that 69% of travellers plan to consult a travel advisor for their next trip. In the US travelers tell us they will seek advice from agents for 44% of trips. Travel has been expanding to new and more remote places for years and travelers require an increasing level of handholding to wade through what is possible. As a peripheral trend, and despite the middle market and volume-based brands building more automation, luxury operators are investing in live personal assistance for high-value customers who require bespoke service. It is a strange dual reality that both tech-enabled as well as human support are growing.

4) Web 3.0 will hit the gas in 2023, from banking to security to travel envision/planning - forget about FTX and the gambling of crypto currencies. Instead focus on the underlying tech of both blockchain and the advances in the metaverse. A great deal is happening as we speak. Gartner Research predicts that by 2026, 25% of people will spend at least one hour per day in the Metaverse.

A major airline will announce a blockchain distribution system that allows peer-to-peer ticket sharing. My bet is on one of the Latin American carriers, but many of the big guys are looking at ways to dis-intermediate the issuing and re-issuing of tickets through tokens.

Online gaming and tourism will come together in a mash-up that allows for video games to feature travel destinations. Wanderer , Infamous, Vizfit and Puzzling Places all incorporate places as a feature element of the tech, some in more flattering ways than others and a few that do actually work as travel exploration guides.

Virtual advertising opportunities will grow as viable brand building tools. Decentraland, Roblox and The Sandbox are all examples of Metaverse environments where big brands such as Absolut, Gucci and Starbucks are investing ad dollars. Expect more investment from travel brands in 2023.

Meta itself will continue to invest billions in the Metaverse. The virtual reality evolution is just starting and in 2023 we will see another jump forward in leisure and commercial storytelling. Meta's free Horizon Worlds app is a great example of how virtual social communities can be built for just hanging out or taking more active involvement across gaming, events and yes, travel. Major presentation/speech material will be created in 2023 that resides in artificial environments and it will allow participants to interact with each other and content in amazing ways. Here is Starbucks's first run at Odyssey Journeys , and Accenture recently built a virtual training environment called Nth Floor. Both use Oculus Quest to create immersive staff or customer environments, and while I don't think this reduces travel in a meaningful way today it certainly could in a decade.

5) Labor support and staffing levels will come into alignment in 2023 - No industry workforce suffered more from Covid than travel both due to industry flight and immigration declines.

As unemployment rises and wages decline, travel will be a sector of choice again. It looks like the Fed will continue to tighten rates, in an attempt to force unemployment levels approaching 5%. If so, this will create a new candidate pool attracted to hospitality service roles and perhaps lure back younger workers who moved to other industries. It is also important to note that today's fastest growing labor participation rate is in older communities, especially with Americans in their 60s. The truth is that aging adults are living longer and must also work longer, a trend The US Bureau of Labor Statistics predicts will continue for decades. Is there an opportunity to reach into this labor pool more effectively or does age bias stand in the way?

Immigration is loosening as are work visa approvals. Our industry needs foreign workers, both on student and temporary work visas, more than any other sector. The pool will grow in 2023.

Training delays for returning workers are ending. Especially with pilots and front line workers in other transportation segments, more capacity will be unlocked as certifications ramp-up. And with Covid restrictions removed, onboarding as well as recruitment have become easier for operators.

GenZ workers are entering the workforce in record numbers. This is additional hope in filling job openings for both professional services industries as well as for service jobs in attractions, restaurants and other seasonal businesses. Younger workers will help to create a stronger labor pool and a more committed workforce.

A few more thoughts on community and the role of travel

1) Communities who have reduced their focus (or even pushed back) on tourists these last few years will now realize they need visitors back, an awakening that should open up much needed travel infrastructure investments to ensure long-term economic strength. Even in mountain communities where this friction has been most pronounced we see more sensible and transparent policy balance & stewardship. This will emerge to unlock tourist benefits without compromising the needs of residents.

2) Big business districts (think NYC, San Francisco, Tokyo) have seen their daytime economies hurt badly by remote work. Luring employees back to central business districts may mean civic tax policy that incentivizes employers to change their policies. As the labor market tightens and economic conditions become more challenging, the relationship between workers and office vacancy is more important than ever.

3) The evolution of travel during and after Covid has pushed DMOs and economic development offices into more crucial and necessary roles. Tourism officials are now a bigger part of the conversation across their communities, espousing policy benefits of travel and tying visitation to overall resident health.

Travel will once again surprise to the upside in 2023, and despite what are many challenges it will provide emotional, economic and intellectual benefits that nothing on earth rivals.