US travel service industry revenues are forecast to increase 5.6% per year in nominal dollars through 2026, according to a report recently released by Freedonia Focus Reports.
Travel service providers will benefit from the release of pent-up demand among leisure travelers following travel delays and cancellations amidst the COVID-19 pandemic.
Further gains will be supported by rising disposable personal income (DPI) levels both in the USA and abroad.
Recovering demand from business travelers – supported by the expanding number of companies operating over geographically dispersed areas (a function of ongoing economy-wide consolidation) – will further support gains.
However, the widespread adoption of teleconferencing will prevent further gains, as business travel is reduced or eliminated for many companies.
Even so, the increasing ease with which travelers can book transport or accommodations directly with the providers of such services and through alternative services will restrain faster advances.
Further, inflation may stymie gains over the forecast period, particularly in the short term, as rising fuel costs drive increases in travel costs.
However, consumers are likely to be willing to bear the cost increases after years of social distancing amid the COVID-19 pandemic.
In 2022, US travel service industry revenues are expected to see 11% growth from 2021 levels.
Gains will stem from the relaxation of COVID-19 restrictions, such as the April 2022 lifting of the mask mandate on public transportation.
Revenue growth will be tempered by increasing prices for consumers, amid inflation and rising fuel costs.
Nevertheless, consumers are less likely to be deterred by such cost increases than in a typical year – an effect of “cabin fever” experienced by many following a lack of travel during the pandemic.