Leisure travel bookings continue to take off despite economists factoring in recession risks for next year.
Over the summer, hotel bookings exploded and airlines struggled to keep up with demand as Americans embraced "revenge" travel once pandemic-related restrictions were lifted.
That continued into the fall, with the TSA reporting that 2.56 million people traveled on the Sunday after Thanksgiving alone, the highest number of travelers in one day since December 2019.
“There seems to be no sign of weakness,” Travel + Leisure CEO Mike Brown told Yahoo Finance Live (video above). “Forward bookings look strong even into next year. Macroeconomic news and geopolitical [risks] make everyone want to sound hesitant, but it's not showing up in leisure travel.”
For Travel + Leisure, which offers timeshares and travel services, the surging demand is a welcome sign, especially as the travel industry continues in its recovery.
"Our room nights are up from 2019 and already Q1 of 2023 is ahead of where Q1 was in 2020 before COVID hit," Brown said. "What's happening, though, is we're seeing room nights extend by about 8%. So this work-from-anywhere trend that we're seeing is changing how people are using our product."
According to the American Resort Development Association's (ARDA) 2022 data, approximately 9.9 million Americans own part of a timeshare or residency club, and the industry is estimated to be worth $8.1 billion.
Brown explained that the misperception that "you have to go to the same place, the same week, and stay seven days" is no longer the case. "You can be in Mexico for seven days in a three-bedroom and then escape to our newest resort in Atlanta for two nights."
Brown also highlighted that the timeshare market, in particular, has grown by reaching new demographics.
“The average age of the new purchaser is under 50 years old — Gen Xers and millennials represent 70% of our purchasers,” he said. "So the demographic is changing. What's not changing is people want a brand they can trust and they want resort amenities."
Still, it remains to be seen how durable these trends are. The Fed's firm stance toward rate hikes, along with inflation and labor market uncertainties could force Americans into an awkward economic position in the new year.
So far, the travel industry has benefitted from consumers wanting to spend more on experiences, Brown noted, even as inflation has spread to travel and airfare costs.
"We've been able to increase our prices right along with what's happening in the general market," he said. "On the pricing side, [we're] really seeing an ability to grow and really no consumer resistance to it."
He also remained optimistic about hiring. The U.S. added 88,000 leisure and hospitality jobs in November, though the sector hasn't fully recovered to pre-pandemic levels.
"As long as leisure travel remains strong, hospitality is needing great people at our resorts and in our sales and marketing organization," Brown said.