MARCO ISLAND, Fla. -- As inflation began trending downward in 2024, financial concerns gave way to political ones among USTOA members, who said in a survey that global conflict and political instability topped their concerns for this year.
Results of the sixth USTOA Economic Impact Study showed that 58% of members were "extremely" or "very" concerned about global conflicts, such as the wars in Ukraine and the Middle East. It was closely followed by concerns about general political instability, a strong consideration for 56% of members.
In the previous survey, from 2022, participants ranked cost of living increases as the most important issue they faced, followed by global financial instability. Those issues ranked fourth and fifth this year.
"It was much more focused on financial stability and inflation," said USTOA CEO Terry Dale of the 2022 results. "It was more finance and the cost of eggs, the cost of creating travel packages."
The 2024 survey, released at the USTOA's annual conference and marketplace here, was fielded by PwC between July 18 and Oct. 11.
The survey opened just five days after the assassination attempt on Donald Trump at a campaign rally in Pennsylvania. Collette chief revenue officer Jeff Roy said that event exemplified a troubling divisiveness in the American political environment.
"There's more energy and activism, I think, right now," he said. "People seem to be willing to take action over things that are affecting them."
While it would not have factored into the survey, Roy also mentioned the December killing of United Healthcare CEO Brian Thompson in New York.
Roy said geopolitical events rose as a concern for clients following the Hamas attack on Israel in October 2023. He estimated that on the low end, the attack and its fallout caused a revenue dip in 2024 of about 5%, and maybe as high as 10%.
And while concerns about inflation abated somewhat last year, the pace of world events only accelerated.
"I do think geopolitical stability kind of became front and center for us, because there's a war in Ukraine that's about three years old now; the Middle East conflict hasn't really gone down," Roy said. "Now we've got Syria on top of it, we've got potential issues with Turkey, a new president coming in, and I think we have to be ready for anything."
For example, one area of uncertainty for operators: Whether a change in U.S. tariff policy, which has been floated by President Trump ahead of his January inauguration, will come to pass -- and whether it would have a cooling effect on travel.
"You want to be proactive and be prepared," Dale said when asked at a news conference here about the potential for tariffs to disrupt international travel patterns. "But with this administration -- I don't say this negatively -- you almost have to wait and see.
"There is a lot of rhetoric," he added. "But how much of that rhetoric is followed through, and then how much it impacts us, we don't know yet."
That makes planning difficult, said Jerre Fuqua, president of Holiday Vacations and a USTOA board member.
"As a tour operator, it's hard when you're putting different pieces of things together to create this perfect pie, if you will," he said. "It's a little bit of this, a little of that, it comes from here, it comes from there, and to have 'I don't know' as part of it, you can't plan ahead, you can't price, you can't think about the things you would normally have visibility over."
Tour operators expect growth in 2025
Despite concerns, USTOA members are bullish on travel trends overall.
Nearly half of members projected sales growth of more than 10% in 2025, while stable growth of 1% to 3% was expected by 7%. Only 2% projected sales declines.
Data from 2024 has not yet been finalized, but the survey also showed that the projected financial impact of travel packages sold in 2024 would grow 8%, to $24.4 billion. Over 3.8 million travel packages were forecast to be sold, representing 8.4 million individual travelers, a 6.7% increase. The percentage of packages sold through travel advisors held constant, at about 60%.
Data from the member survey showed that of the 10 destinations most popular with clients next year, seven of them are in Europe.
The top five destinations next year are, in order: Italy, Portugal, Greece, France and Japan. Rounding out the top 10 were Spain, Iceland, Croatia, South Africa and a three-way tie among Australia, Morocco and Thailand.
Members said that 16% of their business in 2024 was domestic. Internationally, a little over half of vacation packages sold were to Europe, with 15% to Asia/Pacific countries, 10% to the Middle East and Africa and 6% to Latin America.
Escorted/guided tours remain the biggest contributor to the revenue of USTOA members, at 37%, while custom packages have grown from 3% of revenue in 2022 to a projected 16% in 2024.