Land and river cruise tour operator Tauck is entering its 98th year in business, and the company is no stranger to going with the flow as travel habits and conditions change within the industry over time. Tauck president Jennifer Tombaugh told senior editor Nicole Edenedo that the company is more optimistic than ever as it heads into 2023 — a year that’s expected to yield strong travel demand but with lingering challenges as the industry works to move toward a post-pandemic era.
Q: How are things looking for Tauck as it heads into 2023?
A: We continue to see pent-up demand from the past two or three years of shutdown. But what’s exciting now is that you’re seeing a lot more new people come into the market. We’re now starting to see more people come off the sidelines and say, “Now’s the time to travel.” So as we look into 2023, I feel really optimistic. All of our projections right now look quite strong for 2023.
Q: What do you think will be the biggest challenges the travel industry and Tauck in particular will have to face in 2023?
A: There are certainly concerns about the war in Ukraine and what the impact of that might be. We’re concerned about what the inflationary pressures might do to demand or in terms of overall booking curves. But we remain very bullish about ’23. Because, again, there’s a huge swath of Americans, our main clients, who still have a lot of savings and a lot of opportunity financially to travel, even though there are these inflationary headwinds, and the dollar is very strong. So they’re still seeing travel as a good value. What we’re seeing now is a higher than normal number of even some of our past patrons booking not just one trip for 2023 but two trips or three trips. That sense of urgency is still very much out there, and I think that is going to power 2023.
Q: Pricing has been a pain point this year, not just for travelers but for suppliers; there is a lot of demand and limited supply, especially for flights. How is this impacting Tauck, and when do you foresee this improving?
A: What we’ve seen overall with airfare is that travel is not a commodity to people anymore; if they’re going to spend the money, they typically now want to fly premium economy or business. But you have higher demand, less capacity, so those fares have been quite a lot higher. But the airlines have done a great job bringing more capacity online, getting their regular schedules kind of back in place, and so that seems to be less of an issue in certain destinations. Europe is doing really well right now. It’s seen as a much more affordable destination than it was six months ago. Australia, New Zealand though — more of a challenge. We see that reflected in our tours; they’re not performing as well. So I think as that capacity comes back, maybe six months from now, we’re going to see Australia and New Zealand bounce right back.
Q: Which destinations and types of travel that were strong in 2022 remain so into 2023?
A: We have three years of pent-up demand for Japan, so we expect a real banner year for Japan in 2023. Obviously, we’re not going to China or Russia right now. We’ve seen some softness, as I think everybody has, in the eastern part of Western Europe and just that concern about what will happen in Ukraine. But we’ve seen over and over again since 9/11 that travelers are incredibly resilient.
Christmas markets have been performing amazingly well. There’s still just a little more hesitation on the Danube because everybody’s kind of watching to see how Ukraine plays out, but I expect it to fill in beautifully in 2023. Africa is off the charts and doing quite well; South America is coming back online; Ireland and Switzerland are doing exceedingly well. Honestly, everywhere continues to perform well, with just a couple of exceptions.
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