Alternative Travel Plans for 2023

The travel industry was decimated by the Covid-19 pandemic and is still struggling to recover. Will travel ever return to 2019 numbers? If the travel industry does recover, could travel stocks be a good investment in the long term? There is no clear answer to these questions, and no way to predict the post-pandemic future. However, it does seem that even if the travel industry is able to get back on its feet, it’s likely to be very different than it was in 2019. Like in so many other industries, the pandemic may have altered people’s perceptions and preferences in travel the long term. Let’s look at some of the alternative travel trends that are likely to impact the industry in 2022.

Blurring the boundaries between travel and life

Just as the pandemic merged work and home, it also blurred the lines between travel and living. The trend towards remote work had already begun before the pandemic, but the pandemic put it into hyper drive. And as more people transitioned to remote work, they began to realize that they could work from anywhere, and didn’t have to be tethered to one location. Suddenly, rather than looking at travel as something that could be done only during a limited number of vacation days, it became a potential lifestyle choice to live as “digital nomads”. 

Leading companies in the travel industry are taking note of this trend. Airbnb is increasingly focused on longer-term rentals. In its 2021 Q1 report1, the company noted that nearly a quarter (24%) of nights booked on the platform in Q1 were for stays of 28 days or more.  In cities like New York, that number is even higher. And it’s not only Airbnb—hotels and resorts are also offering “workation” options.  For example, the Vakkaru resort in the Maldives offered a “Work Well” package, with a free upgrade to a bigger villa with a study equipped with a printer and office supplies, for stays of more than 21 days.

Several Caribbean nations whose economies are heavily dependent on tourism and were hit hard by the pandemic also see remote workers as an alternative income source for their countries. Barbados, Jamaica, the Cayman Islands, Bermuda, and Aruba all offer long-term visas for people who can prove that they have remote employment. Their advertising campaigns highlight the opportunity to work online while gazing out at the turquoise Caribbean waters and spending weekends and evenings at the beach. 

And it’s not only the Caribbean. Popular European vacation spots like Croatia, the Czech Republic, and Iceland offer similarly attractive opportunities. The idea is that remote workers can do their work, and then spend their leisure time enjoying the local attractions and pumping cash into the local tourism industries. It’s a dream come true for the workers as well—who wouldn’t want to spend weekends on a tropical beach or perusing the museums and cultural hubs of Europe? 

As the pandemic wanes, workers are slowly trickling back to in-person work. However, in many companies, remote is now an option in the long term. In May 2020, Jack Dorsey, CEO of Twitter, declared that Twitter employees could work from home forever. Facebook didn’t go that far, but as of June 2021, they are letting employees submit requests to work from home in the long term. The smaller players seem to be sticking to remote models as well. As people grow accustomed to remote work, it is likely that the interest in workations will only grow stronger. 

Tourism that makes an impact

Voluntourism, a blend of volunteering and tourism, was a $3 billion dollar a year industry 2before the pandemic. It covers a wide range of activities that are perceived as contributing to the society or community at the chosen destination. This type of tourism is especially popular in poorer countries, in which there is a significant gap between the economic status of the tourists and that of the majority of the local community. In some cases, the voluntourism activity is the main focus of the trip, and in other cases, it is an add-on or an enhancement to standard tours. 

Popular voluntourism activities include painting or repairing schools or public buildings, teaching or interacting with children, working at animal shelters and refuges, and working in orphanages. Many voluntourism experiences also include cultural immersion such as homestays, that enable visitors to experience local culture in a deeper and more authentic manner than in traditional, hotel-based travel. 

Although voluntourism ground to a halt during the pandemic, there is a good chance that Covid-19 will end up boosting the field. That’s because the pandemic has demonstrated that no country is a bubble, and problems that arise in one country are likely to impact other countries, as happened in the pandemic. That understanding is driving a sense of shared responsibility for a common future. Voluntourism offers concerned citizens the chance to enjoy and learn from another country and culture while expressing their commitment to global citizenship.  

It’s all about the rush

YOLO—You Only Live Once has become a motto, or even a battle cry for younger generations such as millennials and Gen Zers. The YOLO philosophy drives them to look for extreme experiences in all that they do, including travel. That tendency has driven significant growth in adventure tourism, which includes a variety of adrenaline inducing activities including mountaineering, caving, canyoneering, wilderness exploration, scuba diving, river rafting, sky-diving and more.

Like the entire tourism industry, adventure tourism also crashed in 2020. However, as the pandemic wanes, it seems to be one of the quickest to rebound and grow. As millenials and Gen Zers make up an increasingly larger slice of the economy, adventure tourism is expected to continue to grow. According to Statista, the market value for adventure tourism is already at almost $1B in 2021, and expected to more than double by 2030 3with a CAGR of 10.7% from 2020-2030. 

The heightened demand for adventure tourism might even be an unexpected result of the pandemic. Much Better Adventures co-founder Sam Bruce says “People are gravitating towards more adventurous experiences…because our relationship with our own mortality has now changed quite a bit. Life’s so short and we all appreciate that now more than ever before, and we’re seeing that reflected in what people are booking”4.

Getting that beautiful photo

In the Instagram era, influencers are constantly on the lookout for ways to stand out from the crowd, and posting beautiful pictures at stunning locations is one of the best ways to garner likes.  Rise Above Research, a consulting firm that provides market research for the digital imaging industry, estimated that people will take a total of 1.4 trillion digital photos in 2021, up from 1.12 trillion in 20205. Many popular Instagram and Youtube travel influencers boast millions of followers, and earn a living partly or solely from their travels. 

Instatourism has driven exponential growth in sites seen to be highly “Instagramable”. After influencers post pictures at those sites, hordes of their followers show up in their wake. This has lead to overtourism in popular European cities like Barcelona and Venice, causing residents to protest. However, it also offers opportunities. Cities or sites looking to boost tourism can create attractive picture sites and invite influencers to visit them. A beautiful picture from an influencer with thousands of followers can uncover enormous tourism potential in previously unknown sites and drive spending in the local economy. 

Demand for travel is on the rise

Hotel stocks, airline stocks, and cruise stocks were hit hard by the pandemic but the travel sector as a whole is showing a strong trend towards recovery. While it may look very different after the pandemic, the growing demand for alternative types of travel demonstrate the enormous potential in the industry.

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1 Airbnb Shareholder Letter, Q1 2021. As of this writing the Fund does not own shares of Airbnb or Vakkaru resort. 

2“The Pandemic Changed The World Of ‘Voluntourism.’ Some Folks Like The New Way Better”, July 15, 2021

3 “Adventure tourism market size worldwide in 2019 and 2020, with a forecast until 2030”, November 17, 2021

4 “Travel industry experts on the post-COVID travel trends emerging from bookings” June 3, 2021

5 “How many photos will be taken in 2021?”, June 23, 2021