Continuing interest in travel in 2024 fueled growth for tour operators, and the outlook for next year looks even better.
"Demand is very strong for travel in 2025, there's no doubt about it," said Jack Richards, the outgoing CEO of Pleasant Holidays. A sound economy has consumers willing to spend money on travel next year, he said.
"Now, it's not going to reach the levels we saw immediately after the global pandemic, in 2022 or 2023, but it's going to pace above 2024," Richards said. "The demand just keeps going."
Also hopeful is Heidi Durflinger, the newly named CEO of EF World Journeys.
"Travel is very strong. The experience economy is superstrong right now, and the outlook for 2025 is very good," Durflinger said.
Tour operators are betting on interest in specific countries and regions. For EF, that includes Thailand, where it has introduced an expanded menu of sustainable tours. Durflinger said that Asia in general looks bright for 2025, including South Korea and Japan, where popular cultural trends in music and movies are a draw for Gen X and millennial travelers.
Bukchon Hanok Village in Seoul, South Korea. Demand for the country looks strong for 2025. Photo Credit: FenlioQ/Shutterstock.com
Half of the countries on G Adventures' list of top 10 trending destinations for 2025 are in Asia, including Pakistan, Tibet, the Philippines, Thailand and Japan. A trio of European countries also made the list: Bosnia, Greece and Portugal. Durflinger said sales to Greece and Spain in the most recent quarter were up 30% year over year.
Richards traced much of the popularity of overseas destinations in 2025 to the continued favorable exchange rates for Americans, particularly against the euro and Japan's yen. As of early December, it took $1.05 to buy one euro.
"We're almost at parity. If that continues, oh my God, Europe will be the bargain of the century," Richards said.
While a strong dollar and low unemployment are providing travel tailwinds, one question is whether inflation can be controlled and price increases tolerated. Richards said customers aren't holding back.
"We actually expected people to begin balking at the prices, but they're not. In fact, when I take our average purchase price for 2024 and compare it to '25, it's up 3% going into 2025; so price sensitivity is not affecting travel as we thought it might."
Another plus is that the election is over, its outcome decided. "Travelers don't like uncertainty. Now they have certainty," Richards said. "They know who is going to be president; they know what his agenda is. They can make plans."
Both EF World Journeys and Pleasant Journeys see opportunity in the adventure and expedition segment in 2025. Richards just rolled out a new section of his company's advisor website devoted to safaris and ski vacations and to vacations in Alaska, Antarctica, Iceland and Costa Rica.
In September, EF launched a new brand, EF Adventures, which specializes in hiking, biking, walking, kayaking, ziplining and other high-activity tours.
"There's this interest in wellness and well-being, getting outdoors and off the beaten path, getting active. Doing more adventurous itineraries is going to be a big trend," Durflinger said.
Another area of growing importance is shoulder season and offseason travel. Offseason travel to southern Europe in particular "is super popular across all of our products," Durflinger said.
One area that might not be as robust in 2025 is Mexico and the Caribbean. Speaking at the Ascend conference in Cancun in October, ALG Vacations president Ray Snisky said that with the exception of the Dominican Republic and Puerto Vallarta, every major destination in the Caribbean and Mexico will have a reduced airlift capacity next year. That is expected to push prices higher.
"We're driving advisors and their clients to try to book as early as possible," Snisky said.