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International travel will be 'hot' through the summer as borders open up

TripAdvisor CEO Matt Goldberg joins Yahoo Finance Live to discuss the summer travel season, the return of international travel, the impact of labor shortages on travel, and the increase of experiential travel.

Video transcript

SEANA SMITH: The summer travel season is here. And despite the pinch of inflation, Americans are paying up when it comes to travel. New data out from Tripadvisor saying that the market specifically for travel experiences is growing fast and estimates that the industry is going to be worth about $280 billion by 2025. Here to tell us more is Matt Goldberg. He's the CEO of Tripadvisor. Matt, it's great to see you here.

So before we get into exactly what people are paying for, let's just talk about the overall summer travel season. How strong of a season do you expect this to be?

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MATT GOLDBERG: Well, we expect the summer travel season to be strong. You know, Americans are traveling again and summer travel is back. We can see it in the airports. We can see it on the roads. And that's going to be true, the peak season is off to a great start. So it's going to be one of the best weekends in almost two decades.

Some with travel intent beyond Memorial Day is significantly higher than last year. And the vast majority of travelers are planning to take summer trips this summer. And they're even willing to spend more.

Now, it doesn't mean that they're not going to be subject to some of the economic whims. They may make choices about staying closer to home. They may choose to drive rather than fly. But in the end, travel is back, and we're going to feel it this Memorial Day.

AKIKO FUJITA: Yeah, you know, so let's talk about some of those trade offs that we're seeing met because it is fascinating to see even in the face of higher prices-- in the case of airfare, we're talking much higher prices-- travelers are still willing to pay the money there. So as they plan out their vacations, what's the trade down that we're seeing?

MATT GOLDBERG: We're not seeing a trade down. We're seeing perhaps the choice to go somewhere closer to home, maybe do a slightly shorter trip, and maybe, again, think very carefully about where you want to spend.

But the truth is that we have seen over the last year and it's continuing, a shift from material goods to experiences, travel being one of the most defended discretionary spend in anybody's budget. And while Americans still have good financial savings in their accounts, they are prioritizing travel like never before.

SEANA SMITH: Matt, when it comes to some of those pricing trends that you are seeing, let's start domestically. Are we starting to see some of those pricing pressures ease?

MATT GOLDBERG: Well, look, I think pricing is always an interesting one to watch. Supply and demand is important. It's important to think about, you know, what consumers want and what they're willing to go into. I think that you will see a pricing ease in some areas. But I think you will also see a new normal of pricing, where, you know, pricing came up and now it's moderating and staying where it is. So as long as the consumer keeps spending, as long as there is demand, you know, price will hold.

There are ways to take advantage, you know, when we think about how we try to serve the consumer at Tripadvisor, there's always options to meet every budget, whether it's where you're choosing to stay, how you're choosing to get there, or the kind of experience that you want to have.

AKIKO FUJITA: Matt, you know, you're talking about some of the options being for Americans to take closer to home. But we've also seen strength on the international side of things, with a lot of countries, especially in Asia really opening up significantly over the last several months. What are you seeing on that front? And the thing that we keep hearing over and over about passport delays, how is that complicating those travel plans?

MATT GOLDBERG: Yeah, international travel is clearly back. You know, share of international travel intent is returning to pre-pandemic levels in the US and EMEA. And, of course, APAC has opened up and we're seeing intent to travel there at more than double than last summer, for example. So travelers are willing to spend. They're willing to go far away. They're looking for experiences that are in far flung-- far flung places and are going to really enhance their lives and make memories.

I think the passport situation is something that, you know, many of us in the industry have lobbied government to make sure that we are freeing up, you know, the visa situation, getting passports out there so that people can travel unobstructed. And I think you'll continue to see international be a category of travel that will be hot through the summer.

SEANA SMITH: Matt, this weekend certainly going to be an early test here for some of those airlines that have struggled to keep up with demand, especially when we take into account what happened last summer. How big of a factor, how big of an issue do you see labor shortage being this time around?

MATT GOLDBERG: Well, look, everybody's talking about how they've staffed up. We know that labor shortages last year were a real, sort of, weight on the system. I think many of the providers have learned their lessons. I just traveled actually twice this week, once internationally and once domestically.

And, you know, it was easy and smooth. I traveled last night from New York to Boston, where I'm sitting today. And I can tell you, it really feels like in the airports, they have geared up and they're ready to take on the demand that's coming this weekend.

AKIKO FUJITA: So, Matt, we have to ask you, since we're talking about travel here, what's the big travel plan you have? Youre in a hotel?

MATT GOLDBERG: Well, I just-- yeah, right now I'm at my home in Boston. And we're going to spend the weekend here. But we're going to focus on experiences. We're going to focus on doing the things that my family loves to do, whether it's going to a new restaurant, taking a food walking tour in the North End, which is really fun. We may go and do a Revolutionary War experience, touring through Boston. We'll probably go see some music.

So we are very focused on experiences. And we're seeing that, you know, travel planners are increasingly prioritizing experiences, which is why we're so excited at Tripadvisor, about the ability to provide that because experiential travel is growing. Half of US travelers said the thing they're most excited about this summer is the activity or bookable experiences they've planned for their trips.

And we're seeing searches up. And more than half of the travelers are planning those before they even take the trip. 75% are doing it before the trip, and 20% four weeks in advance. So experiences is hot. And it's an area where you can tailor to any budget need, whether you're going to a vineyard, where you want to go have a cultural tour, or just stay at home and have a whole unique experience in your hometown.

SEANA SMITH: Matt, what about some of the trends that you're seeing from your customers? Where are the top destinations for this weekend?

MATT GOLDBERG: Yeah, this weekend, I mean, the US destinations that are hot, of course, Orlando, Las Vegas, New York. We're seeing Myrtle Beach and Miami Beach. International, of course, is hot as well, you know, Paris, London, Rome. And then, of course, the beaches of Cancun and Punta Cana in Dominican Republic. So, you know, no matter what you're interested in, there's something for everybody this summer season.

AKIKO FUJITA: Yeah, they'd be just sound like a nice way to spend a three-day weekend, right? Matt Goldberg, good to have you on today. CEO of Tripadvisor.