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NTA business survey: Members reflect on 2021 and forecast the future

November 30, 2021

By Bob Rouse

At the completion of a challenging year, NTA tour operators look for brighter days in 2022, but most don’t expect their company to catch up to pre-pandemic performance until 2023 or later. This and other insights emerged from NTA’s 2021 Year-end Business Survey, completed by buyer (tour operator) and seller (tour supplier and DMO) members in the weeks leading up to Travel Exchange, the association’s signature conference, held Nov. 14–17 in Cleveland.

Asked when they expect their company to outperform 2019 metrics, more than half of responding tour operators (56%) said it’ll be 2023 before they surpass pre-pandemic numbers. 23% said 2024 or later, and a few (4%) said never. 15% expect to catch up next year, and a very few operators (3%) said they did it this year. Sellers are more optimistic, likely because 24% of them reported surpassing 2019 numbers this year. The rest were divided between next year (22%), 2023 (34%), and 2024 or later (20%).

Only a fraction of tour companies (5%) are operating with the same budget this year than they had in 2019. 48% have a budget in 2021 that’s less than half of their pre-pandemic budget, and 20% are operating on less than one-fifth of their 2019 budget. Many more sellers, 26%, have the same or higher budget as in 2019, with only 11% operating under 50% of their pre-pandemic budgets.

71% of tour companies reported making either small or significant changes to their business model, with 32% standing pat. Some said they will offer more programs, while others are cutting back. Other changes mentioned include the following:

  • Reduced the capacity of bus tours, from 50 people to 36 people
  • Changed payment and cancellation policies
  • Reimagined office with an option to work remotely
  • Less components/meals included in tour packages
  • Announcing and marketing tours much closer to departure

Most sellers, too (68%), have made changes, and they mentioned a variety of new policies and strategies, including more virtual programming, shorter booking windows, and an increased focus on destination management and stewardship rather than marketing.

Survey respondents were asked to predict the factors that will cause the biggest change in how they do business in 2022. Most buyers (76%) listed COVID and health concerns as a major factor for business next year, with a significant number also listing the challenge in finding suppliers that serve the group market (52%), and increased prices (51%). 37% cited changes in consumer behavior and interests.

Most sellers (71%), however, cited labor shortages as the biggest contributor to changes in 2022, with a near-equal number also listing COVID concerns (52%) and consumer interests (48%). Price increases were cited by 34%.

Responding to a question about their own prices they are setting for 2022, 29% of tour companies report no increase in rates. 45% say they are raising rates by 5% or less, and 25% will bump prices by more than 5%. On the seller side, nearly half (48%) say there will be no change in prices, while the other half split between a 5% or smaller increase (30%) and an increase larger than 5% (22% of respondents).

In regard to changes in the size of groups, tour operators are mostly split on whether group sizes will continue to shrink (42%) or will stay at the size they’ve been (47%), which is smaller than pre-pandemic group sizes. 7% foresee groups getting larger. Many sellers (49%) also envision shrinking group sizes, while 39% believe they’ll stay the same, and 9% expect larger groups.

As 2021 comes to a close, the vast majority of buyers (92%) expect to finish the year with a decrease in income compared to 2019. An equal number (4% for both) expect to finish better or the same. And while nearly half of responding sellers (45%) also expect to finish 2021 earning less income than in 2019, 33% expect to hit a similar number, and 22% project a higher amount of income this year than in 2019.

Asked to project income for 2022, the picture gets better, with only half (51%) of responding tour operators expecting to close out 2022 behind their income levels for 2019, with the rest split between expectations to finish the same as 2019 (27%) or better (23%). Sellers are, again, more optimistic, with 44% expecting to finish 2022 ahead of 2019 and 33%  on par with 2019 revenue. 23% expect to finish 2022 behind their 2019 levels.

At Travel Exchange in November, NTA members conducted business appointments, networked in a variety of settings, and shared insights and strategies during forums and seminars. Many delegates expressed a positive outlook for travel, including John Marshall, director of tourism development for NYC & Company. “The operators were highly engaged, and I was very pleased to hear that there are many who are already planning travel back to NYC,” he said. “Perhaps more importantly, there was a near unanimous focus on the safe and pragmatic return to travel.”

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