The Election Is in the Rearview Mirror. So What’s Around the Bend?

The results of the U.S. presidential election are finally behind us. Some people are feeling chuffed, others absolutely crushed. But pretty much everyone here (and probably to some degree, around the world) feels exhausted and ready to think about something else. That aligns with the way the luxury leisure travel business seems to have been feeling: rather on edge these past few months — with bookings softer than the year prior, or at least growing at a slower rate — but ready to shake off the distractions and return to something like normal booking patterns.

Many of the major players, including Marriott, Hilton, Airbnb, and Expedia, reported over the summer that bookings had plateaued as the “revenge travel” trend subsided. And it’s not unusual for travel bookings in general to flatten slightly in the months leading up to an election, as consumers who are hesitant about the economy or market fluctuations hold back on discretionary spending. 

And for luxury leisure travel in particular? A mixed bag, with some suppliers and sellers reporting a leveling off of growth, if not a slowdown, after the post-pandemic boom, and others saying business is still booming. “We're not seeing the same growth that we saw in ‘22 and ‘23, when there was a lot of slack to make up post-COVID,” Chris Walker, Chief Commercial Officer of Leading Hotels of the World, told me. “But we are outpacing the industry by four to five percentage points, so we’re very bullish.” Jack Ezon of EmbarkBeyond, in his Q3 Trends Report, published in early August, echoed the sentiment: “The ‘rage’ is over, and the party has mellowed to more of a great dinner gathering.”

I’m hearing anecdotally that even as recently as last week, the Caribbean and similar destinations are soft for the upcoming holidays. “I’m not seeing outright emptiness for festive, but not every place is full yet in Mexico and Costa Rica, and I'm seeing more flexibility over minimum stay requirements and even pricing,” says Zach Rabinor, founder of Journey Mexico and its younger offshoots Journey Costa Rica and Journey Brazil. 

That all tracks with what we found in our Pulse Survey earlier this year, in which 63% of agencies expected an increase in revenues this year, much lower than the 91% who said 2023 revenues had been up YoY. More recently, I asked Chandler Mount, Principal Researcher of Affluent Consumer Research Co to survey a target list of affluent adults — representing the top 10% of ZIP codes by income — about their leisure travel bookings over the past three months. Most (52%) said their booking frequency was unchanged from the year prior, while 23% reduced their bookings and 25% increased them. 

So what’s causing at least some HNW consumers to tighten the purse strings? It’s not just anxiety over the election. For those who told Mount they’d decreased their bookings, “Concerns about elections/political outlook” ranked fourth as a factor, at 14%. More impactful were “Changes in personal financial situation” (48%), “Travel prices are too high” (39%), and “Concerns about the economic outlook” (34%). As Ezon, who caters to a rarefied sliver of the wealthy, reported: “Clients are pushing back more and more on exorbitant pricing, overtourism, and intense heat. While our UHNW clients can certainly afford to travel, they are also focused on value for money, their time, and their experience.” 

Looking forward, the tone is much more exuberant, especially given the U.S. economy, which is already much stronger than the gloomy electorate seems to think — “The Envy of the World,” The Economist calls it — with low unemployment, tempered inflation, surging markets, and Wall Street bonuses poised to balloon. The outlook is even better if you’re marketing to the wealthy. Rabinor says that immediately after the election, he saw a wave of confirmations for bookings that had been pending, which he believes was more about the post-election market surge than any political sentiment. “It’s like, ‘Everything’s going to be okay, my portfolio is good, I’m still worth what I thought I was worth and we can pay our deposits and finalize our plans.’ ”

In its annual Luxe Survey, Virtuoso says that half of its advisors anticipate a slight rise in travel demand next year, with 20 percent expecting a significant increase. Similarly, Lindblad recently reported that its bookings to date for future travel increased 26 percent vs the same period in 2023. Walker says that Leading Hotels of the World’s projected 2025 revenue is already 25% ahead of what it was at the same time last year, pointing out that the growth is driven more by volume than by increased ADR.

And what about airlines? I spoke to travel industry analyst Henry Harteveldt, President of Atmosphere Research Group, who expects demand — and prices — to remain high into next year. “Airfares between the U.S. and Europe, especially premium economy, business, and first, will likely remain strong because there's been such strong demand. I don't anticipate a lot of discounting,” he said. “It’s a different picture across the Pacific, because there's more competition and depending on where you're going in Asia. There may be some great deals out there — even for business. Within North America, fares are also going to stay relatively high because we are seeing strong demand, especially in premium cabins.”

All good news, yes? Well, as I’ve said in the past, resilience is part of our industry’s constitution, but so is fragility. Economics can shift, and there is broad disagreement about whether Trump’s stated policies — lower taxes, deregulation, across-the-board tariffs, tighter immigration policy — will turbocharge the U.S. economy or tank it, not to mention how it might impact the rest of the world. And many travel advisors caution that their clients are increasingly sensitive to high prices — ”price gouging,” some even call it — particularly when coupled with continued under-delivery in terms of service. Let’s not let that be the goose that kills 2025’s golden egg.

What about you? Did you see a slowdown, or even a dip, in bookings this year? To what do you attribute that? And how is 2025 looking so far? Let’s keep the conversation going!