First, we have to recognize that, always, it's a golden age of travel for someone. There are consumers and retailers who are warmed by memories of heavy discounting as the economy unraveled in the waning months of 2008. Travel inventory might have looked distressed to the broader travel industry (cruise ship cabins for under $30 a day?), and spending on travel might have seemed irresponsible to consumers who were nervous about continued employment, but for those positioned to sell and seek bargains, those were halcyon days. Good times!
When it comes to the broader community of consumers and designers, packagers, marketers and retailers of travel products, we would appear to be in a better place today. In fact, we are in what likely is still the early phase of an extended golden age of travel.
The World Travel and Tourism Council points out that the travel industry is outpacing global gross domestic product growth and that the industry is on track to become the largest in the world (though no one has pinpointed exactly when). Much of travel's traction is fueled by the rise of the middle and upper classes in Asia -- China, in particular -- where opportunities for growth in every segment of travel are simply staggering.
On the domestic front, our sister company PhoCusWright reported earlier this month that leisure travel grew 7% in 2013, roaring past the U.S. economy as a whole, and with an encouraging bump (9%) in the 45-to-64 age group. And -- very encouraging -- millennials (ages 25 to 34) boosted their travel spend by 11%, suggesting that a new generation of travelers will use increasing earning power to explore the world.
By this point in 2014, I've already heard three renowned economists say that conditions are ripe for at least two more years of solid growth (economists do not, by nature and training, predict further out than two years). I cannot find a credible contrarian to these rosy forecasts. The explicit message from all is to make hay while the sun shines. (There is, naturally, always the footnote that predictions are subject to change in the event of an unforeseeable, massively disruptive occurrence.)
But it's more than simple economic growth that makes me feel we're in an especially good place and likely to stay here awhile. When it comes to technology, we've come to feel entitled to a fast pace of change, but I'm also seeing a tremendous burst of creativity in how technology is being exploited.
I'm most excited by mobile-enabled innovations in the sharing/collaborative economy that, as proof of concept, are now being mimicked by, hijacked by and co-opted into the mainstream travel industry. Although every time I've looked at Airbnb I end up viewing professionally managed apartments, and every Uber driver I've summoned is in fact a veteran of black car services, these and the truly more collaborative models breathe new life into the industry on a daily basis.
And I'm also seeing a lot of innovation in what might be thought of as legacy components of the industry. Travel insurance is now, what? ... complemented? challenged? ... by "travel protection." Even a rusty, old state-run railroad like Italy's Trenitalia has been shaken awake by high-speed, fashionable competitor Italo and has proven it's up to the challenge, giving travelers a real choice for riding the rails in Italy.
What's perhaps most encouraging is that smart young entrepreneurs, fueled by technology, entrepreneurial zeal and no small amounts of Red Bull, have also recognized that there is money for them in travel retailing, and they are connecting in unconventional ways with travelers young and old. The question about whether "travel agents" are dying is increasingly irrelevant; new retailers are certainly not calling themselves travel agents, yet their intermediary functions are not profoundly different.
There are a couple of reasons for this. First, despite the incremental improvement in supplier-direct business as a percentage of travel sales, the rapid growth in the industry overall means opportunities for middlemen are increasing, as well.
And it's not helping supplier-direct efforts that social media has both a corrosive effect on brand identity (it certainly takes ownership of brands out of the exclusive control of the trademark owner) and intensifies the importance of a trusted, independent adviser.
Ultimately, even though trends, including optimism, seem to gain momentum and even a sense of inevitability, the landscape changes. Pharrell Williams can (and did) make a 24-hour video of his song "Happy," but nothing lasts forever.
Short of catastrophe, what might derail travel industry happiness?
Perhaps there's no reason to dwell on it at this point, but economies are by their nature cyclical, and the travel industry is by and large a cash-intensive, low-margin business. That hasn't changed, and its fragility doesn't scale down as the industry scales up. Quite the opposite.
I didn't mean to bring you down here at the end. Take solace in the fact that, always, it's a golden age of travel for someone. And hedge your strategy accordingly.
Email Arnie Weissmann at [email protected] and follow him on Twitter.