Vacations slip into business trips

The travel writer Javier Reverte used to say that the best of trips is always the next one. Given the resistance of consumers to abandon tourism, there must be some reason.

The truth is that, after a 2020 where the confinements made tourism disappear, with empty hotels and the consumption of services at a minimum, in the years 2021 and 2022 the sector starred in one of the most extraordinary recoveries in consumption. It gave the impression that consumers were taking revenge on activities related to leisure, vacations and travel to make up for all the tourism they were unable to do during the pandemic.

Nor in 2023 do users seem willing to give up travel, not even in the face of flight and hotel prices at all-time highs due to inflation and the rise in the cost of fuel. Although more than half of Spanish consumers are cutting their percentage of spending in almost all categories due to the unbridled increase in prices, a detailed analysis reveals that the item dedicated to travel and hotels continues to grow. This is shown by a study that I have carried out within the IESE Intent HQ Chair based on the Fintonic database, which contains 199,833,170 purchase acts carried out by 253,470 Spaniards between January 1, 2022 and March 31, 2023, and that I have included in my latest book, Everything is terrible, but I am fine, edited by Aecoc.

According to this report, Spanish consumers have dedicated 4.1% more of their budget to travel and hotels in the first quarter of 2023 compared to the same period in 2022. In absolute numbers, we are talking about an average of 123 euros per user in the first quarter of this year versus 113 euros in the same period of the previous year after eliminating the effect of inflation, that is, in 2022 prices.

UK users are not far behind, as confirmed by Sunshine Saturday. That is the name given in the United Kingdom to the first Saturday after New Years. It is a kind of “groundhog day” which, instead of predicting whether winter will continue for another six weeks, predicts how the tourism sector will behave that year, as it is the day in which the most British they book their vacations. Surprisingly, the data from Sunshine Saturday 2023 was quite positive: 11% more queries were made online and in apps than in 2020, when covid-19 had barely entered our lives. In addition, 1.9 million people (more than double the number in 2019 and 2020) used one of the four most popular travel apps in the UK.

Two upward trends could be contributing to the integrity of the sector: bleisure and flex-cations, which we could translate as “ng-leisure” (that is, a mix of business and leisure) and “flex-cations” (a vacation flexible). The first term refers to the fact of taking advantage of part of a business trip to take a couple of days of vacation; “flex-cations”, for their part, would be the emerging trend of extending leisure trips, taking advantage of the possibility of working remotely from the travel destination.

Both trends are driven by remote work. And it is that, although it seems that every day we have breakfast with the news that another company has decided to end the teleworking of its employees, more and more people work remotely at least one day a week and affirm that this modality of work It has led to more travel. In addition, almost 30% add Friday or Monday to their weekend stays and telework from their leisure destination.

These two phenomena raise three questions. First of all, are these changes really taking place or is it just a perception that is far from reality? If the answer is yes, how can it affect the business of hotels, airlines and travel agencies if the consumer goes on long weekends and short local vacations instead of long international trips of between 10 days and 2 weeks? Finally, is it a temporary phenomenon or are we facing a profound cultural change that will survive when the situation returns to normal?

Actually, these types of getaways are more common in the United States, where teleworking is more consolidated than in the European Union. In the EU, on the other hand, we still have little data from airlines and travel agencies.

On the other hand, it is difficult for the structure of the holidays to undergo drastic changes. Yes, we will be able to see how the consumer avoids the highest rates when traveling by not being forced to travel on the days of greatest demand. You can also extend your stay, teleworking until your return.

Finally, it is difficult to know if “ng-leisure” and “flex-cations” are here to stay. We repeat that same phrase ad nauseam applied to teleworking and electronic commerce, but time has tempered the intensity of both phenomena. In addition, the answer will vary depending on the consumer we are talking about. For the Spanish, for example, prolonging the “bridges”, those holidays adjacent to the weekend, is as national a custom as having them, but it is too soon to say that remote work supposes a fundamental change that affects the holiday spending and its structure to decline for a long time.

Perhaps we have to understand the phenomena of “ng-leisure” and “flex-cations” as consumer resources to continue taking vacations and avoid the decision that, economically, would be more rational: cutting an apparently discretionary expense in a context of skyrocketing inflation, with no sign of abating in the immediate future.

We have already seen the appreciation that the consumer shows to leisure and tourism, which had only been interrupted due to force majeure, by government obligation and prohibition. Now that these circumstances no longer apply, are you going to abandon them simply because of strains on your available cash flow? At the moment, it seems unlikely.

José Luis Nueno is a professor at IESE, holder of the IESE Intent HQ Chair and author of Everything is terrible, but I am fine, published by Aecoc

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