Travel suppliers are still forecasting a banner 2024, but geopolitical concerns are beginning to impact some bookings into the early part of the year.<\/p>\n
Tour operators at the 2023 USTOA Annual Conference & Marketplace in Los Angeles in early December cited terrorism as the third biggest concern for 2024, jumping from nearly the bottom of the list a year ago and reflecting how much the Israel-Hamas war has shaken travel supplier outlook.\u00a0<\/p>\n
Cost of living increases and economic uncertainties took the top two spots on the list, part of the USTOA’s annual survey of members that was released at the conference. The survey found that 94% of members reported growth in 2023, and 86% said they were confident that guest bookings would increase in 2024.\u00a0<\/p>\n
Still, the survey underscored the concern suppliers have as the travel impact from the war extends well beyond Israel.\u00a0 \u00a0<\/p>\n
Cancellations have risen sharply for some operators on trips to Egypt and Jordan, two countries that border Israel; the former shares a seven-and-a-half-mile boundary with Gaza.\u00a0\u00a0<\/p>\n
“The impact has been pretty severe, quite honestly, for the first quarter of 2024,” said Pamela Hoffee, president of Avalon Waterways, which offers chartered Nile River cruises in Egypt. “Close to half of our guests canceled for the first quarter of 2024. The rest of the year has not seen as much impact.”<\/p>\n
AmaWaterways said the regional decline is stretching halfway into 2024.\u00a0<\/p>\n
“We’ve seen quite a few reductions in bookings, and not many new bookings are coming in,” Rudi Schreiner, president of AmaWaterways, said about Egypt sailings. “There’s not much activity after the summer of 2024. A lot of people have tried to move out of those dates.”<\/p>\n
Collette said it has experienced a noticeable amount of cancellations of tours to Egypt and Jordan due to the conflict.\u00a0<\/p>\n
“The cancellation rate is in the 30% to 40% range for our near-term departures,” said Jeff Roy, executive vice president of revenue management, pricing and worldwide operations for Collette.\u00a0<\/p>\n
But Roy said the impact of the war has had a much broader effect, with travel bookings overall softening in the last quarter of this year.<\/p>\n
“When you look at the margin activity we had week to week, year over year, right up to Oct. 7, we got a lot closer to our booking curve from last year at this time than we were the year prior,” Roy said, referring to the date that Hamas attacked Israel. “So it’s definitely a broader slowdown.”<\/p>\n
Melissa DaSilva, president of TTC Tour Brands, agreed, adding that the U.S. travel advisory issued in October that warned of “increased tensions in various locations around the world, the potential for terrorist attacks, demonstrations or violent actions against U.S. citizens and interests” stimulated broader hesitation about traveling.\u00a0<\/p>\n
“We saw a slowdown in bookings to Europe starting about that same time,” DaSilva said. “And while we had a good Black Friday, I wouldn’t say it was the best Black Friday. We’re really looking forward to January and hoping things get back to normal.”<\/p>\n
DaSilva and other tour operators said they are seeing weaker bookings in other destinations much farther from the conflict, such as Morocco, Turkey and Greece.<\/p>\n
Tour operators still expressed confidence that travel will be strong overall in 2024, despite the challenges ahead.<\/p>\n
“We’re getting a lot of activity on the website, just a lot less conversion right now,” Roy said. “So it seems like people are still shopping a lot. Maybe that will start to dissipate a bit once we get to the first quarter, which is usually the peak booking season.”<\/p>\n
Cruise lines have had an easier time adjusting to the situation, mostly because they can redeploy their ships.\u00a0<\/p>\n
“All three of our brands are globally sourced. And so when there are crises like what we see in Israel and so forth, our ships move, so that’s a positive part of the cruise industry, but also our ability to recognize demand in real time in different markets allows us to optimize [our revenue],” said Royal Caribbean Group CEO Jason Liberty, speaking onboard the new Celebrity Ascent.\u00a0<\/p>\n
But shifting business away from conflict isn’t always easy for advisors.\u00a0<\/p>\n
Alex Sharpe, CEO of Signature Travel Network, said the luxury cruise space saw a Q4 impact from the cancellation of Israel itineraries and of the itineraries of Jewish customers who had been booked to travel in predominantly Muslim countries.<\/p>\n
But adjusting to ships that pulled out of Israel and the Middle East is the biggest struggle for advisors, he said.<\/p>\n
“Redeployment is always tough, and even if compelling replacement itineraries are there, it isn’t what people bought, so you will have to resell some of the space,” Sharpe said. In addition, the alternative itineraries may not command the same or higher pricing.\u00a0<\/p>\n
Still, given that Israel is not a year-round cruise destination, Sharpe doesn’t see a tremendous long-term impact.<\/p>\n
That was echoed by Liberty, who said that the company’s “exposure to that part of the world is very low,” about 1.5% of capacity, which was redeployed. Overall, he said, cruise demand “has been very good, continues to be very good.”<\/p>\n
And as Lainey Melnick, owner of a Dream Vacations branch in Austin, Texas, noted, well-traveled clients are used to navigating around political conflicts, and if they were going to Israel will likely switch to another big trip such as Asia, Australia or New Zealand.<\/p>\n
“When people were going to the Middle East, Egypt, Turkey, Israel, those were more bucket-list kind of cruises, and so they want to substitute with a bucket-list itinerary,” she said.<\/p>\n