A survey of NTA tour operators reveals that business is looking strong for the rest of 2023 and into 2024.
And while they face persistent challenges with costs and industry personnel, operators know what they need and are eager to work with their destination and tour supplier partners to find solutions. The survey gave operators many opportunities to make suggestions—and they didn’t hold back.
Nearly two-thirds (63%) of the tour operators responding said their North American bookings are up from last year. A similar majority (65%) said that bookings for travel outside of North America are better than in 2022. Asked about 2024, more than half (54%) said North American domestic business will likely improve over this year’s numbers, and even more (63%) predict an uptick in bookings for destinations outside of North America.
Among the respondents of the survey, conducted March 15 through April 10, nearly half (47%) conduct business both within and outside of North America, a third (34%) have programs to or within North America only, and 18% focus on travel to destinations outside of North America.
Group size
According to survey respondents, one trend that began prior to the pandemic could be leveling off. NTA operators work with an array of group sizes, and the average number of passengers they reported for their typical groups range from 8 to 90, with a median of 30 passengers. Fewer than half—44%—say that group size is smaller now than pre-COVID, and a like number (42%) say it’s the same. Only 14% reported that their average group size has grown. Looking ahead, however, the majority of respondents (71%) anticipate their group size will remain the same in 2024, and a quarter (27%) foresee an increase next year.
When asked how tour suppliers and DMOs can work with tour operators to best accommodate current group sizes, operators’ responses centered on two areas: reducing the minimum requirement for group pricing, and (mostly for hotels) shortening the window—from 60 days to 30—for operators to reduce their room blocks without penalty.
Flexible itineraries
Tour operators were asked about the flexibility of their itineraries in two ways: whether they are waiting until closer to the departure date to finalize specific hotels, restaurants, and activities; and whether they are building in options for passengers to customize their experience within the tour.
In regard to the former, more than half of respondents (56%) said their 2023 tour descriptions are more flexible, providing less specificity about accommodations and restaurants. The vast majority (87%) do not expect this practice to increase in 2024. Many said they have long stated in printed and online itineraries that changes might take place, and it’s common practice to include “or similar” when listing a hotel or restaurant on the tour.
When it comes to offering passengers more options— for example, an afternoon with a choice of rafting, visiting an animal sanctuary, or taking a lake cruise—a slight majority of operators (55%) said they are not providing choices in their 2023 itineraries, and only 25% anticipate building in more options in 2024 itineraries. Offering options is common, though, and operators said that DMOs can assist in this effort by letting them know about local events well in advance and by providing suggestions and contact information for experience providers who can give group rates to smaller groups.
Meaningful travel
Meaningful travel is on a big upswing, with 95% of operators reporting that more travelers are requesting meaningful experiences. The same percentage see this trend continuing next year. For most (92%), that means offering authentic experiences that connect with the local community. More than half the respondents also said meaningful travel includes supporting local, small businesses and being mindful of the environmental, social, and economic impact the tour leaves on a destination.
Asked how DMOs and suppliers can help operators meet the demand for meaningful travel, operators suggested that DMOs give them information about local events; suggest restaurants where the group can dine alongside local residents; help them find unique, “behind the scenes” experiences; and support Tourism Cares—NTA’s official nonprofit—and the organization’s Meaningful Travel Map.
Challenge: Costs
Nearly all respondents (99%) said the cost of doing business has increased exponentially, and most (92%) expect costs to keep rising in 2024. Operators estimated that the daily cost of a tour in 2023 has increased 18% (on average) since the previous year. Asked to estimate how much costs have risen since 2019, operators’ responses averaged 28%.
Asked what tour suppliers can do to alleviate the burden of rising costs, operators offered a variety of suggestions:
- Refrain from charging more now to make up for losses during the pandemic
- Honor 2023 rates for 2024 programs that are booked now
- Expand group rates to include smaller groups
- Offer better off-season rates
- Be considerate of tour operators who want to establish long-term partnerships
A significant number of respondents acknowledged that increased prices are unavoidable, so they’re asking their partners to try to add a cost-free service or benefit to give operators—and their clients—added value. Operators also suggested that suppliers be more willing to offer complementary rooms or meals for tour leaders and motorcoach drivers. And they asked DMOs and suppliers to explain to local partners that the group market is an important source for repeat business.
Challenge: Staffing
Survey respondents were asked to agree or disagree with this statement: In the past two years, NTA tour operators have told us that staffing shortages (and loss of institutional knowledge) have caused operators to work harder, even needing to train the people who sell to them. An overwhelming majority (97%) agreed, and most (93%) see the problem continuing into 2024.
Operators cited a number of problems they encounter as a result of staffing shortages. At hotels, that might mean a lack of baggage handling and daily housekeeping services. In regard to dining, operators said that many restaurants no longer accept group reservations, and problems with those that do include last-minute closures or cancellations and long delays in service.
When asked to give examples of how inexperienced staff members at restaurants, hotels, and other suppliers have impacted them, operators cited a number of factors that make planning more difficult, including a lack of timely responses to operators’ requests for rates, suppliers’ difficulty with composing and updating contracts, and staff turnover that results in employees who lack a basic understanding of how to work with tour operators.
Amid these challenges, though, tour operators are showing in writing and in person that they’re eager to work with suppliers and DMOs to find solutions through programs initiated by NTA. Some of the suggestions offered by operators at the conclusion of the survey include the following:
- Offering 101-level classes to industry newcomers in how to work with operators
- Helping DMOs train suppliers in their area
- Offering online training for suppliers in specific categories: hotels, restaurants, attractions, etc.
- Creating a handbook written by tour operators
And at NTA’s recent Contact event in Cheyenne, Wyoming (March 29–April 1), operators, suppliers, and DMOs faced these challenges together, with one roundtable discussion focused on developing value-added products or services. Ideas that were generated included providing guests with gift cards to local businesses, sending a local storyteller to a group’s dinner, having a local guide step on a motorcoach to give an orientation, and inviting the operator to meet with local suppliers via Zoom prior to the tour.
NTA members can look forward to more discussions during online meetings and webinars and at upcoming in-person events: Travel Exchange, Nov. 12–15 in Shreveport, Louisiana; and Contact, May 20–23, In St. John’s, Newfoundland and Labrador. For more information visit NTAonline.com.
