Andrea Felsted | (TNS) Bloomberg Opinion

Revenge travel is losing its appeal.

After three years of rushing to book trips in the wake of pandemic-era restrictions, sharply higher fares, protests against tourism, fatigue from endless hours spent in airports and incomes squeezed by inflation are all taking their toll on travelers.

Travel demand is far from falling off a cliff. But there are signs that our wanderlust is downshifting from never-ending to a more normal pattern.

For airlines and tour operators, the next few months will be crucial in filling remaining seats and hotel rooms. If demand is strong, they will be able to sell leftover capacity at higher prices. But if consumers hold off, they’ll be forced to discount, something that hasn’t happened in the past three years.

In Europe, many people who were passionate about their vacations booked in January, in order to secure their preferred destination, hotel and even room. But in recent months, some consumers, particularly more budget-constrained families, have been holding off to see how their own finances, and holiday prices, developed. TUI AG, the world’s biggest tour operator, has sold about 60% of the vacations available this summer. That’s broadly in line with last year, but it’s still a lot of sunny breaks to shift in an uncertain environment.

European travelers are also shopping around. At Thomas Cook, now reborn as an online tour operator, bookings to Spain’s Balearic and Canary Islands are flat year-over-year. This reflects cost — you can get more for your money in Turkey, mainland Spain and Egypt — where sales are up. But anti-tourism protests in the Canary and Balearic islands may also be playing a part.

European consumers are still prepared to pay as much for their package holiday – well almost. TUI’s summer pricing is up 4%, close to the 5% increase reported a year earlier. But budget airlines Ryanair Holdings Plc and EasyJet Plc show that when it comes to air fares, consumers are reaching their limit.

Michael O’Leary, chief executive officer of Ryanair, forecast that fares across its network this summer would be flat to 5% ahead, down from his previous prediction of a 5% to 10% increase, surprising given that capacity is constrained by delays to Boeing deliveries. Europe’s largest low-cost carrier has begun to cut ticket prices to fill its fleet.

There are signs that the U.S. travel recovery, now in its third year, is maturing too. For example, Marriott International Inc. said U.S. leisure revenue per available room, a key measure of hotel performance, was flat in its first quarter. Airbnb Inc. forecast that revenue would expand by 8% to 10% in the second quarter, the lowest level for three years. It’s possible this is a blip — Easter was earlier this year — and Airbnb expects a bounce in the summer months.

Indeed, the picture is complex. Some of the U.S. domestic weakness may reflect Americans traveling to Europe, emboldened by the strength of the dollar. This will likely have been boosted by one-offs, such as Taylor Swift’s concerts.

And this isn’t the only factor that makes the travel temperature so difficult to take. After wildfires in Greece last year, climate concerns are at the forefront of consumers’ minds. Yet this is spurring some unusual behaviors, such as some European customers booking long-haul flights to destinations such as Mauritius, where summer temperatures are more predictable, and, after price increases at some traditional Mediterranean resorts, the cost differential has narrowed.

As in other parts of the consumer economy, it may be that travel is polarizing, with the wealthy still splashing on trips further afield and top-notch accommodation, while those pressured by inflation and higher mortgage costs stick to a budget.

After the West’s travel boom — and potentially a return to more pedestrian levels – the industry is now looking East, to the return of Chinese visitors, particularly to Europe.

But for the coming weeks, short-term factors, such as elections in the U.K. and weather patterns – TUI said the winter season ended particularly strongly, likely boosted by cold and wet conditions – will matter most.

Being unable to spread our wings during the pandemic has reinforced our love of getting away, and we may never return to a situation where we are prepared to stay home. That doesn’t mean we won’t alter our behavior, like skipping a week away in spring or autumn, or, for example, forgoing a city break to preserve our main vacation.

There is much riding on this year’s peak summer season. Not only will it determine the level of profits at tour operators, hotels and airlines, but it will give the first glimpse of what a more settled post-pandemic travel market looks like.

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This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Andrea Felsted is a Bloomberg Opinion columnist covering consumer goods and the retail industry. Previously, she was a reporter for the Financial Times.

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