Jennifer Pearson (3:46)

Has to make the list, I think is the uncertainty. So I don't want to steal Rachel's thunder with the article you just wrote, but I do think that a lot of the surveys we've been seeing are that us adults are just not certain what they're going to do this summer. And so we have a bank rate survey, for example, where every year they ask, are you going to travel? And that that percent fluctuates every summer. And even within many surveys, we're seeing, you know, 60% will travel, 40% will travel, 50 kind of hovers around there. But in the bank rate survey this year, 23% were uncertain if they were going to travel at all, versus 18% last year. And that's kind of the biggest jump year on year. I think everyone's just not sure what, what the future will hold and what their finances will, will dictate that they can do.

Rachel Wolf (4:41)

Yeah, I mean, it was, I think it's the Marriott CEO, he was saying pretty much the same thing, right? That people are literally waiting as long as they can to make those decisions. So he said the booking window right now for both leisure and travel and business Travel is at 21 days, which if you think about it like if you're planning your summer vacation, that is not a very long time, especially if you have kids. And there's a lot of, you know, know, planning that has to go into it.

Marcus (5:06)

Yeah.

Rachel Wolf (5:07)

So, you know, for the time being, people are choosing to push through and choosing to go through with those plans, but the fact that the booking window is so short means that it could change at any moment.

Marcus (5:18)

Yeah, yeah. So this is a good point. It's Jenny. So uncertainty, uncertainty. Is that what you want to be on the list?

Jennifer Pearson (5:25)

Yep. Okay, that's my consensus item.

Marcus (5:29)

I think that's a fair one. Rachel, you'd written that folks are taking a wait and see Which I thought was a good way of putting it. A wait and see approach to travel. Same survey or same surveyor, 46% of Americans had definite plans to travel this summer, down from 53% the year before. And then some other data as well I think was from another one of your articles. In February, the share of Americans plan to take a vacation in the next six months dipped below 40% for the first time since the pandemic, according to the conference board. So I think uncertainty is a fair one. Rachel, what would you like to add?

Rachel Wolf (6:07)

So my addition is kind of along the same lines, but it's a little bit more specific, which is to say that cost is going to be king this year. Because of the uncertainty, people are really going to look for deals wherever possible. And at the same time, because demand is so uncertain, a lot of these airplane airlines, for example, are leaning into discounts to try and get people to buy a ticket. So I think that's going to manifest itself in a few different ways. One, it means fewer international trips, more domestic trips. It's going to mean more road trips and fewer flights, maybe shorter stays over week long excursions. So all of these things are really going to play into people's travel plans this summer. Looking at this chart, US Consumers rethink travel plans amid economic uncertainty, you can really see that a lot of people are planning to scale back their Trips. You got 20% who have or will travel less than they've planned. Another 19% who plan to shorten their trips, 14% who are changing where they're going. And this is all coming from a Harris poll survey conducted for the points guy. So, you know, there are clearly a few different ways that people are looking to save money on travel this summer.

Marcus (7:27)

Yeah, yeah. And it seems as though there's a bit of a bifurcation happening there. I think you written about this as well. There's fewer lower middle income folks traveling. Right. You've got households making less than $50,000 now making up about 18% of travelers this summer. According to Deloitte. That's down from 31% two years ago. So from 31 down to 18. And Rachel, you said that airlines, they know this is happening and they're actually playing into this. Delta, you were saying they have a most of their capacity is going to be for premium seating.

Rachel Wolf (8:10)

I think that's. Yeah, that's the goal for them is they're really refitting all of their planes to accommodate what's still pretty solid demand from upper high income consumers. But what I thought was really Interesting was there's some data from bank of America looking at, you know, how spending is broken out between demographics and the one segment that is strong across all income levels is cruises. That is the one area where lower income households are actually going to be spending more this year than last year. So I think, you know, again, it's the search for value. Right. There's this perception that cruises are a more affordable way of vacationing. And so it's things like that that are really going to see a surge in demand this year.

Marcus (8:55)

Yeah. It's so shocking. We'd written their obituary with a vengeance.

Jennifer Pearson (9:02)

Yeah. I think also there's so much in the news about airlines and problems at airports and air travel. And so I think cruise is a good example where people are turning. We also see a lot of data that road trips you had mentioned, Rachel. Road trips are really high on the list of types of travel that especially in the summer. Summer road trip is a pretty common. And I think that's true across the income too, that we're looking at that bank of America study or Deloitte. Marcus.

Marcus (9:33)

Yeah, yeah. So cost. Cost is king. Jenny. There's one more spot on the list. So they have to make it onto the list or maybe bump something off. What are you trying to add?

Jennifer Pearson (9:48)

I do think AI. I can't talk about travel plans without mentioning that travelers and planners are looking at AI more this summer than previous summers. And that's going to be true, I think, each year, subsequent year. Here, generative AI usage and trip planning among US travelers. It comes from a survey from Deloitte and it's showing. It looks at last year and it looks at this year. An increasing number of travel planners are using Gen AI for their trip planning. So especially younger age groups like Gen Z and millennials, like 23% this year.

Marcus (10:32)

So what you want to go on the list is using AI to plan trips.

Jennifer Pearson (10:37)

Yes.

Marcus (10:37)

Okay. I'm going to push back here a little bit. So it's gone from 10% to 15% in terms of total. Obviously younger people doing it more, older people doing it less, but from 10 to 15%. So it's not a ton of people, but it's not nothing. Also, what do you think they're doing? Is this just discovery? I imagine they're not doing much of their booking using AI yet. Right.

Jennifer Pearson (11:04)

It's really planning, like you said, discovery. It looks like from. At least from some of the. Yeah. Surveys we're seeing getting dining recommendations, getting excursion or kind of day trip activity recommendations. It seems to be popular for that.

Marcus (11:19)

Okay.

Jennifer Pearson (11:19)

You're right.

Rachel Wolf (11:20)

It's.

Jennifer Pearson (11:21)

I was saying it's just not. It isn't a huge percent of the population at this point.

Rachel Wolf (11:25)

Yeah.

Jennifer Pearson (11:26)

But I do see it increasing. Sorry. Go ahead, Rachel.

Rachel Wolf (11:28)

Oh, no, I was just saying I have tried using Gen to sort of generate itineraries a couple of times, and it's interesting. I mean, I guess on the one hand, it sort of depends what you're looking at it for. If you just want a general overview, I feel like it's probably better at those kinds of things. If you try and drill down into specifics, like budgets or, you know, like, hotel recommendations and those kinds of things. I feel like it could fall down a little bit. But I think, like, as a starting point, you know, as we've seen with other Gen AI applications, especially in the retail sector, I feel like it has, you know, a good. Yeah, it's a good place for people to start.

Marcus (12:04)

Yeah. All right, we've got a spot open. I'm going to place it. Third. I've got uncertainty. First, Costas King second, using AI to plan trips. Third. In terms of ways that travel is going to be different this year than as compared to last year. Rachel, good luck. Okay, one spot left or not one spot left. One attempt left to get on the list.

Rachel Wolf (12:27)

So I would say this is maybe not a huge difference from last year, but I think it will still have a big impact, so it's not going.

Marcus (12:33)

To move right to the end of the show.

Rachel Wolf (12:35)

I've already counted myself out.

Jennifer Pearson (12:36)

I was hoping you'd knock me out.

Marcus (12:38)

Of the room.

Rachel Wolf (12:41)

But I'm very interested in this, like, live tourism trend. So basically, the fact that people are sort of using these live events as an excuse to travel. And so last year, we saw that a lot with the ERAS tour. That was the big event. This year we had that to a certain extent with Beyonce's Cowboy Carter tour. But also sports tourism is definitely on the up. We had the Champions League final earlier this year in Germany. We've got the Club World cup coming to the US So I feel like that will be a pretty big driver of interest. Especially, you know, as we said, economic. Economic uncertainty may be causing people to rethink travel, but these events are a great way to convince people to make that leap.

Marcus (13:23)

Yeah, Yeah. A lot of people traveling for F1 races, which is a lot more popular now. That's a good one. Jenny. I'm so sorry.

Jennifer Pearson (13:33)

It's all right. It is a good one.

Marcus (13:35)

AI is right off the list, but I think third, I've got two for you which are obviously going to make the list because I'm in charge of it. But the first One is that 2025, it was supposed to be a banner year for travel. And I think that is a bit of a narrative that. And I think you had an ask about this, Rachel, one of your many on travel. It seems like you're basically just a travel analyst at this point. Travel briefing not we could have one. A record 5.2 billion people were expected to fly in 2025. That's up 7% according to the International Air Transport Association IATA. The first time that it would have reached 5 billion, you were saying. And at the start of 2025, Americans had planned to travel more 56% or at least the same amount 30% according to the IPX 1031. So do we not think that's a bit of a story that this was actually supposed to be a big deal of a year for travel and the fact that now it's not is a bit of a storyline?

Rachel Wolf (14:39)

Yeah, I think it will still be a big year, just not as big as companies were expecting. I mean the IITA also just downgraded their profit forecast for the overall airline industry. I think they cut it by like $600 million. But they also pointed out that it's still going to be a record year in terms of profits. Right. So at least to a certain extent, there are pockets of demand. You've got higher income consumers. International travel is still relatively strong here and there. And from a global perspective, I think demand is pretty high. Whether those travelers are coming to the US is another question. But I think overall demand is pretty resilient when it comes to travel.

Jennifer Pearson (15:27)

It's funny, you can look at a survey from February and then you can look at a survey from April and it's two different stories. And a lot of it has to do with when the tariffs news landed and and some of the travel restrictions and whatnot. So I think it's f you know, survey respondents are fickle maybe is the right way to put it. But I do think we'll see a lot of fluctuation here. So I think that is a good point. That may bump out live events.

Marcus (15:55)

May has done already. All right, that's knocked off one of them. Here's my second swing. So you'd alluded to this, Rachel. So I'm hoping that you signed with me and knock off the other thing you tried to put on the list that I asked you to come up with. So our Karen James Jacobs was writing about anti US sentiment spreading as the administration's tariffs aim to make the country less reliant on foreign products. She was saying global favorability of the US fell 20 points to what Jenny was saying in a very short period of time from January to March here, according to Morning consult, views from Canada were down 44 points. France 33, the UK 31, with more Canadians recommending that you should avoid the US then recommended visiting it. According to YouGov, that's a big deal for a lot of reasons, but no one more so than the fact that Canada accounted for the largest number of visitors, visitors to the US last year at 20 million. Second is Mexico at 17 million. And then it's a huge drop off to third place UK sending, just not sending them. We're coming because we want to like get out of England and you got. You go over to America. 4 million according to the International Trade Administration. So I think this is a. This one's a big deal. The fact that there's anti US sentiment is going to affect travel.

Rachel Wolf (17:21)

One estimate by the World Travel and Tourism council says the US could lose as much as $12.5 billion in spending from international tourists this year as a result of these anti US boycotts. So, yeah, I think that's going to have a huge impact on the domestic hospitality industry.

Marcus (17:42)

And this one, that data point is fascinating because you were again writing it, but you have to do something else. It's not all about tribal, racial. But in that article that referenced that source, you also said, was it the US was the only country.

Rachel Wolf (17:59)

Yes.

Marcus (18:00)

That's gonna drop, is that correct?

Rachel Wolf (18:03)

Yes. The only country where travel demand to that country will be lower than the year before, which is.

Marcus (18:10)

Yes.

Rachel Wolf (18:11)

I mean, it's a pretty clear sign.

Marcus (18:13)

200 countries. It was. Yes. Yeah, it was shocking. So Rachel agrees with me already.

Rachel Wolf (18:20)

I know. I just, I just kicked myself off the list.

Marcus (18:24)

Yeah, you're out, Jenny. As if you need any more convincing. But I do have a few more data points which I thought were great. Some of these from Rachel's article, some of them Karen's pieces. One was saying that research from Tourism Economics in late February revised its outlook, projecting a 5% drop in inbound visits to the US this year versus the earlier forecast which had a 9% increase. So expected to go up 9, and then that's been revised to negative 5 and you start to see this play out. There are a ton of data points to suggest this is already happening. The iata, which is over a few hundred different global airlines, it represents North America, saw Falls in both domestic and international travel in February. Overseas visits to the US fell 12% in March. Year over year, according to National Travel and Tourism Office. Fewer international travelers. Also hurts US carriers. And they said their Q1 profit forecasts were down. They revised them down. And then also in all important Canada, a ton of data there. Air Canada said inbound. US inbound bookings were down 10% year over year in April. In the April to September peak travel period. Canadians choosing other places to go instead. Number of people traveling from Canada to the U.S. fell 15% year over year in April, according to U.S. customs and Border Protection. People going across the border, driving across was down even more. You know, say more, Jenny. At this point.

Jennifer Pearson (19:57)

That's some good data.

Marcus (19:58)

It's all Rachel's data, right? Ironically, Rachel, you're off the list. I don't know. Are you off this? Where does this go? So we've got uncertainty. Cost is king. And then 2025 was supposed to be a banner year for travel. Where would we put anti US Sentiment is spreading.

Rachel Wolf (20:14)

I think it could even fit under economic uncertainty. Right. Because the thing that is driving this anti US Sentiment, tariffs. And that's the same thing that's causing US Consumers to be uncertain.

Marcus (20:26)

All right, so you're basically saying Jenny said that the beginning, Marcus much more eloquently. Uncertainty. All right, fair enough. This quote from the Wall Street Journal kind of sums up how people feel about travel really well. So I'll just say this to close out the episode. Dan Ruswick. This is the quote. Dan Ruswick, his sister and his mum were planning to take their annual trip to Comic Con in San Diego at the end of July. They had booked their tickets to the event and a refundable hotel. The family, who live in Illinois, were looking into flights when the stock market started dropping in mid April. They canceled the trip, which they estimated would have cost about two and a half grand. The markets rebound and the tariff pause didn't change Mr. Ruswick's mind. Saying, I don't have faith this is going to stay this way. Which I think is how a lot of people are feeling. Just because you might feel good today doesn't mean you're certain that you'll feel good tomorrow. All right, that's our list. Uncertainty and anti US sentiment contributing to that cost. Being king is second. And then 2025 was supposed to be a banner year for travel and now will not be, but will still be pretty decent. We think that's all we've got time for for this episode. Thank you so much. To my guests. Thank you. First to Jenny.

Jennifer Pearson (21:44)

Good to be here.

Rachel Wolf (21:45)

Thanks.

Marcus (21:46)

And then to Rachel.

Rachel Wolf (21:47)

Thanks Marcus. That was a lot of fun.

Marcus (21:49)

And thanks to the whole editing crew and to everyone for listening into behind the Limits, new marketing video podcast made possible by synth subscribing and following can sometimes feel too good. And leaving a rating in review is said to be life changing. So feel free. Sarah will be here Wednesday taking. Nope, she won't be taking anything. Instead she'll be talking. Who knows, maybe she's taking things. She'll be talking with a special guest all about what it means to take a DEI or pride stance in retail and how that has affected companies. Is that true? Yes, it is true. Next week's episodes.