The 2017 travel forecast: Reduced demand could result in vacation bargains

Where will you go in 2017? If you said “nowhere,” then get in line behind the rest of America. But there’s still time to change your answer — and you might want to.

Nearly half of U.S. travelers surveyed by digital marketing firm Fluent say they don’t intend to take any vacation trips. Of the respondents with plans, 45 percent say that they will travel only domestically.

They’re people like Meera Sundram, who is lukewarm to the idea of going anywhere this year.

“I’m expecting prices to go up as I plan the few trips I have in 2017,” Sundram wrote in an email. She recently moved from Houston to New York, where she works for a health-care company. “Since moving to the Northeast, I feel lucky that I can avail myself of train service some of the time,” she says. “It gives me some alternatives to air travel.”

Fluent’s latest numbers don’t paint as grim a picture as did its Thanksgiving travel survey, which suggested that 78 percent of Americans were grounding themselves for the holidays because of a variety of fears and uncertainties, including worries about the Zika virus, terrorism and the results of the presidential election.

“Until there’s greater confidence in the economy, and state of affairs in the country in general, I wouldn’t expect to see large numbers of consumers saying that they will be taking exotic and expensive vacations in 2017,” says Jordan Cohen, Fluent’s chief marketing officer.

That’s normal for a post-election year, says Mark Noennig, executive vice president and general manager at Mark Travel, which owns the brands and handles tours for Funjet Vacations, United Vacations and Southwest Vacations, among others.

“Historical data shows that shifting travel patterns should be anticipated as political and economic climates settle,” he says. “Overall, we’re expecting a slight weakening in leisure travel over the next few months as a result of the election. That should result in pent-up demand for travel in 2017.”

So why are we talking about not traveling — in, of all places, a travel column? Because in light of some promising industry trends, there may be more travel opportunities in 2017 than you think.

Let’s review a few more 2017 numbers. The largest agency consortium in America says travel will remain affordable this year.

“We see modest price increases for 2017,” says John Lovell, president of Travel Leaders Network and Leisure Group. “It is really a function of the specific time in which you’re traveling and to where.” For example, he says, overall airfares are expected to rise between 3 and 5 percent in 2017. About the same increase is predicted for hotels, but cruise prices should only rise “slightly” in the new year.

“Some of the price increases are mitigated by consumers seeing lower than typical pricing in some European destinations, especially in cities like Paris and London,” Lovell says.

If you look for bargains, you’ll probably find them. Reduced travel demand, lower energy prices and a strong dollar could set the stage for some real steals. “It makes next year a great year for international travel,” says Adam Cooper, senior vice president for North America at STA Travel.

What are the trends that will shape 2017? In email interviews with travel industry insiders, I found that most reflect a more conservative, less-is-more approach.

● Alternative accommodations: One of the big trends of the past decade has been toward vacation rentals and apartments, and away from traditional hotels. As travelers stay closer to home, that trend should continue to accelerate. But a contrarian booking strategy might be helpful, says Henrik Kjellberg, president of Hotwire, an online travel site. “There’s a greater supply of available hotel rooms, and the rates for travelers to secure great lodging will be lower in 2017 than 2016,” he says.

● The need for authenticity: When people travel in 2017, they’ll be picky about where they go, according to Jay Schwartz, founder of IdeaWork Studios, a branding agency that specializes in the hospitality industry. “People are craving authentic experiences,” he says. Think unique neighborhoods, boutique hotels and other only in experiences. On the flip side, this may mean more competitive pricing on vacation experiences deemed less authentic, such as theme parks.

● Instant gratification: Another theme for 2017 is the increase in short-term bookings. “I’m anticipating a noticeable shift in consumer behavior toward on-demand bookings,” says Sam Shank, chief executive of HotelTonight, a discount reservation agency. “I believe that we’re migrating towards shorter lead times in accordance with more accessible and mobile booking options that open things up and don’t require extensive lead times,” he says. In other words, more people are waiting until the last minute to book. The contrarian strategy? Plan now for your 2017 vacation. You could be rewarded with a better rate.

Taken together, these trends suggest that defying conventional wisdom may yield the best results. Travelers are setting the bar high — perhaps too high. They’re spending so much time looking for something different that they might miss the bargains in front of them.

What to do?

“It’s simple,” says Noennig, the tour operator. “Purchase vacations now — do not wait until 2017. This is an ideal time to book an upgraded experience at a better price.”

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