Travel Trends: What’s Expected for 2017
With 2016 nearly behind us, we take a look at how travel trends have shifted in the last year and what's in store for travel trends over the next year.
Travelers in the U.S. are expected to continue to spend and take more trips than ever before. A 2.8 percent rise in U.S. travel expenditures is forecast for 2017, along with 29 million more domestic person-trips, according to the U.S. Travel Association. If travelers are spending more, that's even more reason to protect their trip costs by purchasing travel insurance.
The U.S. Commerce Department predicts that 2016 will end with about 700,000 fewer international visitors than the year before, but 2017 is looking up, with an expected 2.4% increase year over year. For a longer look at expectations for where international visitors will be originating from, five countries—Mexico, China, Canada, India and South Korea—are projected to account for 64% of visitor growth between now and 2021.
An AARP survey shows that 99% of Baby Boomers plan to travel for leisure in 2017 and about half plan to travel internationally, with an average of five or more trips expected throughout the year. The same report indicates that Millennials plan to take more trips than Generation X or the Baby Boomers.
Travel Insurance Trends
Over the last year, current events have shaped the travel insurance landscape. Here is a brief summary.
- Illness: The U.S. Travel Insurance Association (UStiA) issued a press release explaining the relationship between the Zika outbreak and travel insurance. As the press release indicates, travelers must do their homework to determine if their travel insurance would provide coverage for a trip cancelled due to the Zika outbreak. We suggest that travelers call us with coverage questions of this type.
- Extreme Weather: Although weather events can range from a winter storm to flooding, Hurricane Matthew was an extreme weather phenomenon that affected travelers in 2016. Weather.com recapped Hurricane Matthew’s destruction toll. Travelers who bought travel insurance well in advance of Hurricane Matthew could have been covered, but those who purchased policies after the storm had been named probably were not.
- Current Events and Acts of Terrorism: From Brexit to the New York City bombing, there were numerous world events, bombings, shootings, attacks, and acts of terrorism both domestic and abroad in 2016. Frommers.com reported that Brexit meant temporary lower costs for American travelers, which may have encouraged travel to Britain. Travel insurance policies vary in coverages for these types of events. If deemed an “Act of Terrorism,” then an event could be covered. Fear of traveling to an area affected by an event may not ensure travel insurance coverage.
“The outcome is that travelers want to know more about travel insurance and what it covers in situations like these. Travel professionals and travel insurance companies are doing more to educate consumers to help them not only feel better protected while they travel, but better understand the protection they have in place,” said Bob Chambers, vice president of operations at Generali Global Assistance. “This growing awareness may be one reason why travel insurance companies are seeing an uptick in policies sold.”
Flight fares are projected to increase 3.7% in North America next year, but only 2.5% worldwide, according to the Global Business Travel Association.
The Advito 2017 Industry Forecast highlights the fact that the number of flights from Canada to the U.S. jumped 10% in the last year and the number of available seats rose 20%. This follows a global trend of “more routes, more frequencies and bigger aircraft.”
“Airlines are expected to test the market with fare hikes to see what customers will accept, and they’ll become less generous with ‘waivers and favors,’” according to the Advito report.
Consumer complaints to the U.S. Department of Transportation about airlines rose 38% percent year over year, according to the Airline Quality Rating 2016 report. Of the 15,260 complaints, 73% were for flight problems, baggage problems, reservation, ticketing and boarding issues, or customer service problems.
“These results clearly show that the air traveling public is not happy,” report co-researcher Brent Bowen said. “Passengers are reaching out and letting us know exactly that, based on the number of complaints filed with the Department of Transportation. The human element of air travel is obviously deteriorating, and passengers are fed up.”
Other key airline statistics in the report indicate a better traveler experience. The rate of mishandled baggage saw a 17% drop and on-time performance for flights was about 80 percent, compared to 76 percent the year before.
The Cruise Lines International Association’s (CLIA) Travel Agent Cruise Industry Outlook report highlights trends that agents have noticed and expect to see in the near future.
A continuing trend—river cruising is expected to show the most growth among cruise types, with 64% of travel agents saying they expect to sell more river cruise packages.
“In an uncertain world, cruisers seem to be looking for destinations that are closer to home,” the report stated, backed up by statistics that show Alaska as the top growth destination, with 62% of agents anticipating growth there, and California and the Pacific Coast making the top five destinations.
“The trend is also for them to come already informed with what they want, and securing the space more than nine months out,” as an agent that responded to the CLIA survey was quoted.
One thing is certain: as long as people travel by air, land or sea and seek the ultimate vacation destinations, they are making a trip investment. Travelers are becoming increasingly aware of unexpected circumstances that can arise during their trip and turning to travel insurance as a result.
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