In the evolving landscape of global travel, political instability has become the dominant concern for tour operators in 2024, surpassing financial worries that once led industry discussions. A recent survey by the United States Tour Operators Association (USTOA) highlighted the shift in priorities, with concerns about global conflict and political uncertainty taking the lead over inflation and rising costs.
The USTOA’s Economic Impact Study revealed that 58% of members expressed deep concern over ongoing global conflicts, such as the war in Ukraine and tensions in the Middle East. These political instabilities now top the list of worries, with 56% of members also highlighting the potential for broader political upheaval. This marks a stark contrast to previous years when inflation, cost of living increases, and financial instability dominated discussions.
Terry Dale, CEO of USTOA, reflected on the differences between 2022 and 2024, noting that, two years ago, the focus was heavily on economic factors like inflation and the cost of travel packages. “It was much more focused on financial stability and inflation,” Dale remarked. “This time, the spotlight has shifted to global events and their far-reaching impacts.”
The survey, conducted by PwC between July and October 2024, was released just after significant political events, including an assassination attempt on former President Donald Trump and the killing of United Healthcare CEO Brian Thompson. These events underscore the rising tensions and divisiveness within American politics, which has filtered into global concerns.
Jeff Roy, Chief Revenue Officer at Collette, emphasized how recent geopolitical events have exacerbated these worries. Roy pointed to the impact of the Hamas attack on Israel in 2023, estimating that the fallout from such events could result in a revenue dip of up to 10% for tour operators in 2024. He noted that the continuing war in Ukraine, compounded by instability in the Middle East and potential issues in Syria and Turkey, have created a volatile environment that tour operators must navigate.
This unpredictability has brought to light new challenges, particularly the potential impact of changing U.S. tariff policies under the new administration. While such policies have yet to be fully outlined, the uncertainty over trade policies and their effects on international travel poses a considerable hurdle for planning.
As Jerre Fuqua, President of Holiday Vacations and USTOA board member, put it, “It’s hard when you’re putting different pieces of things together to create this perfect pie… to have ‘I don’t know’ as part of it, you can’t plan ahead, you can’t price, you can’t think about the things you would normally have visibility over.”
Despite these challenges, the outlook for 2025 remains positive, with many tour operators forecasting a growth in sales. Nearly half of USTOA members predict an increase of more than 10% in 2025, driven by strong consumer demand and a return to international travel.
Tourism data indicates that Europe remains a dominant travel destination, with Italy, Portugal, Greece, and France topping the list. Guided tours continue to be the backbone of the industry, accounting for the majority of revenue. However, custom packages are gaining ground, with projected sales in 2024 significantly outpacing previous years.
As the global political climate continues to shift, tour operators will need to remain agile and prepared for the uncertainties that lie ahead. While the future may hold challenges, the resilience of the travel industry and its ability to adapt to new circumstances will likely keep the wheels of global tourism turning smoothly in the years to come.
