In most years, the top travel industry stories are a mix of natural disasters, mergers and acquisitions, controversial government policies and unforeseen trends.
But for the first two years of this decade, the most impactful stories sprang from one event whose long-reaching tentacles dominated every industry sector, every destination and every travel business, large and small: Covid-19.
This year, as Travel Weekly’s editors looked over the top travel news of 2022, they found some were, in fact, more reflective of the types of business stories that got the industry’s attention before the pandemic, such as the battle for Spirit airlines, Navigatr’s acquisition of Ensemble and a hurricane that shook Florida. Others were born of the pandemic but represent how the industry is moving on from it, such as the rebirth of Crystal Cruises and Norwegian Cruise Line’s decision to pay advisors on noncommissionable fees.
Of course, variants, vaccines, masks and shutdowns were still very much part of 2022’s vernacular, but thankfully, those were ultimately overshadowed by reopenings and the fading of requirements.
Here, in no particular order, are the stories that Travel Weekly’s editors think are the most memorable of 2022:
2022 was meant to be the year of recovery, and it was. But it began with more fits and starts than anyone would have liked. The first of those fits was omicron, the great spoiler of what was supposed to be the true beginning of the end of Covid. The variant hit the world right before the 2021 holidays, thwarting an expected travel surge. By January, it seemed the entire travel industry had called in sick: Flights were canceled en masse. Cruise ships, most of which had only recently begun plying the waters again, had to cancel sailings as crew tested positive in large numbers, and ships were taken of out of service to house and care for them.
And it wasn’t just planes and ships; according to Hospitality Services Group, 30% of the housekeepers, servers and cooks working in hotels and resorts were either infected or exposed to Covid in the first weeks of 2022.
The silver lining was that omicron hit fast, peaked quickly and had symptoms often described as “mild,” especially for the vaccinated. Hospitalization and death rates were lower than with previous variants. It stalled what was to be the first strong travel season since early 2020, but it also suggested that we could live — and travel — with a virus that, it seems, may stay with us for the foreseeable future.
Omicron brought focus to a serious worker shortage that would plague the travel industry throughout 2022 and threatens to continue well into 2023, if not beyond. The so-called Great Resignation hit travel in an outsized way. By June, travel industry leaders at the U.S. Travel Association’s largest conference, IPW, warned that there were 1.5 million open jobs in leisure and hospitality in the U.S. and that increased staffing was critical to travel’s rebound. “Not having employees is just as damaging as not having customers,” Tori Emerson Barnes, U.S. Travel’s executive vice president, told the attendees.
The travel surge that began in the spring proved a double-edged sword for suppliers, who were experiencing record demand but were hobbled by staff shortages that not only impacted in-product guest services but also raised the ire of clients and travel advisors who endured hourslong hold times for customer service.
Globally, hotels were among the industry segments struggling most with labor scarcity, and they got creative in their efforts to lure new hires and retain the ones they had. From higher wages and gas cards to childcare, properties put significant effort into taking care of workers.
Airlines, too, struggled with the labor shortage, including with the hiring of low-wage groundworkers. But the industry also faced a pilot shortage, much of it caused by the carriers’ pandemic decisions to provide early retirement to several thousand pilots. Service ended up being slashed, particularly on regional routes. Airlines also looked to make open positions more attractive with better pay, while legislation was introduced to raise the mandatory retirement age for airline pilots from 65 to 67.
All of the predictions of pent-up demand for travel proved true, and there seemed to be no ceiling for what people were willing to pay to travel in 2022. Airlines asked consumers for — and got — record fares; in October, Skytra reported that, within the U.S. and Canada, premium fares rocketed 36% compared with 2019, and the Consumer Price Index showed that September airfares were up 42.1% compared with the same month in 2021.
Hotel rates also reached new heights, with average daily rates in the U.S. surpassing even record-setting 2019 levels. In June, STR predicted ADRs would, at year’s end, track $14 higher than 2019, and during one week that same month, weekly ADRs hit the second-highest level ever recorded. By September, Las Vegas visitors were paying the highest ADRs in the city’s history; Marriott International reported that global RevPAR surpassed 2019 levels in October; and Hyatt said global ADR was up 17.5% this year. Despite concerns about inflation, fuel costs and the threat of recession, rates show no signs of abating in 2023. And, in a change from previous booking patterns for both airlines and hotels, it has been leisure travelers who are driving these rates, while corporate travel’s recovery continues to lag.
An end to Covid travel protocols
The year 2022 will be remembered as the one when most of the world decided it would have to learn to live with Covid and accept that it will be kicking around for the foreseeable future in various forms. Thanks to vaccines, variants appear less likely to overwhelm medical facilities, though immunologists say that’s no guarantee against something more virulent appearing.
Mask mandates, vaccine requirements and testing rules fell like dominoes at border crossings, within cities and states, on airplanes and, finally, aboard cruise ships. The U.S. was a little slower than other nations to relax requirements: As nations around the world dropped inbound testing last spring, Washington held firm on its mandate that inbound travelers provide a negative predeparture Covid test. The requirement scared many Americans from going abroad for fear of being stuck if they tested positive, and it slowed the return of the lucrative inbound market. The battered travel industry mobilized and, led by U.S. Travel and ASTA , the Biden administration finally dropped the requirement on June 12. Suppliers said the impact was immediate, helping lead to a surge in summer travel.
The cruise comeback
The cruise industry ended 2021 limping back from an 18-month pandemic shutdown, only to sail straight into omicron. But in January, when the CDC finally retired the Conditional Sailing Order (remember that?), the last barrier to getting entire fleets operational fell, and other holdouts — Australia and parts of Asia — began to loosen cruising requirements and again let ships depart from their ports. By August, as the virus abated, most lines dropped their predeparture testing and vaccination rules, leading to an immediate and much-needed boost in bookings. Royal Caribbean Group in November became the first major cruise line since March 2020 to turn a profitable quarter, signaling that the battered industry could in fact start making money again.
In May, Ensemble shareholders approved an acquisition by Navigatr Group. One of a handful of major consortia in the U.S., Ensemble went from being a member-owned cooperative to a privately held arm of Navigatr, whose investments include travel technology company TripArc, host agency Travel Edge (No. 27 on Travel Weekly’s 2022 Power List) and Kensington Tours. Despite 95% of Ensemble members approving the deal, it has not come without bumps in the road. Members who stuck with Ensemble expressed optimism about the change, touting advanced technology offered by Navigatr and enhanced training opportunities, but other former agencies say Ensemble still owes them payments on 2019 incentives. (Ensemble has disputed this claim and said it is “not correct”). Still, Jeff Willner, Navigatr CEO, is bullish, believing that Ensemble members can double their current margins. Time will tell.
The rebirth of Crystal
In January, Crystal’s parent company, Genting Hong Kong, said it had run out of money and was going bankrupt. Soon after, Crystal’s ships were arrested in the Bahamas, and its Miami headquarters went dark. Desperate clients and travel advisors with deposits and commissions on the line had little to no recourse as the cruise line, which launched in the ’90s and was known for an incredibly loyal following and legendary service, lost the battle to Genting’s ongoing pandemic problems.
Once shuttered, speculation was rampant as to whether Crystal would be sold for parts or if the brand could be revived. In the end, both happened. A&K Travel Group, owned by Abercrombie & Kent CEO Geoffrey Kent and Heritage, the holding company chaired by former Silversea owner Manfredi Lefebvre d’Ovidio, in June said it had purchased Crystal’s two largest ocean ships, the Crystal Serenity and Crystal Symphony, as well as the Crystal brand, which A&K said will return to service in 2023.
The revived Crystal, however, will not sail its newest ship, the Endeavor, which launched just six months before Crystal shuttered. Silversea outmaneuvered A&K and won the bid for the expedition ship and renamed it the Silver Endeavour. At least one of Crystal’s river ships will also sail again: Riverside Luxury Cruises, owned by the Germany’s Seaside Collection, will launch a new European river cruise line in April using the former Crystal Mozart. And both Silversea and Riverside sought, successfully in many cases, to retain the most important of Crystal’s assets: their former crew members.
The shadow that remains is whether money owed to guests and advisors when the line went bankrupt will ever be refunded, which so far only Silversea has pledged to do.
The pandemic almost made us forget the natural disasters that, at different times and in different places, plague the industry. Hurricane Ian was a devastating reminder that they did not go away. Ian slammed Florida in late September, damaging some of the most premium and high-profile travel destinations in the state’s southwest, including places in Fort Myers Beach, Sanibel, Captiva and Naples. While some properties were spared significant damage, the level of destruction on local infrastructure indicated that a full recovery will be long and costly.
The Category 4 hurricane washed away roads and bridges, including the Sanibel Causeway connecting Sanibel and Captiva to mainland Florida. Experts said the scale of the damage, combined with supply chain issues, could make it hard for the destination to recover in time for its peak winter travel season. And given how much housing was also lost, the storm will certainly exacerbate staffing issues in the region for the foreseeable future.
Direct bookings and NCFs
Among the impacts the pandemic has had on the cruise industry is a decline in bookings from travel advisors (as a percentage of total bookings). It was first noted in late 2021 and accelerated this year to the point that Norwegian Cruise Line Holdings forecasted in October that direct bookings would surpass those from travel advisors by 2023.
Various explanations were offered: Travelers became more comfortable buying online during the pandemic; travel agencies were struggling to restaff; when cruising was shut down for 18 months, travel advisors became accustomed to booking other products (and in 2022, that product was often an all-inclusive resort).
The cruise companies made it clear they want those advisor bookings, often the most lucrative for the lines. And in October, one line made a historic change to try and get them back. Norwegian Cruise Line said it would pay commission on noncommissionable fees, long disdained by advisors, for certain advance bookings. Frank Del Rio, CEO of parent company Norwegian Cruise Line Holdings, was very clear as to why: “This is a quid pro quo … what we expect in return is more support from you,” he told advisors at Travel Weekly’s CruiseWorld.
The Spirit Airlines saga
In August, it became clear that JetBlue, and not Frontier, was the company poised to acquire Spirit Airlines. The turn of events began in February, when Frontier and Spirit agreed to merge, promising strong consumer benefits from the marriage of two ultralow-cost carriers. But JetBlue suddenly pounced, making an unsolicited $3.6 billion offer for Spirit, besting Frontier’s $2.9 billion package.
After months of contentious back and forth, Frontier and Spirit withdrew their merger plan, paving the way for JetBlue’s triumph. But the deal is far from assured regulatory approval, and even if attained promises to be challenging and expensive to carry out.
There is no doubt that 2022 was the year agencies not only recovered but thrived. Quite a few reported surpassing sales for 2019, which for many had been the best year on record. But it did not come easily, in part because many were not just busy but overwhelmed.
It’s not an outcome most would have imagined in the throes of the pandemic, but by March of this year, with omicron mostly in the rearview mirror, agencies found themselves almost overcome by the surge of pent-up demand from consumers increasingly interested in working with advisors.
For some, the joy of once again booking travel was countered by the frustrations of their own staffing shortages and hourslong wait times when calling suppliers, who were overwhelmed for similar reasons. By summer, some agencies became so swamped that they made the unprecedented decision to cut off new bookings altogether. Things moderated by fall, and agencies declared they were once again “good busy."
Update: This report was updated in the “Ensemble’s acquisition” section to include Ensemble’s position regarding 2019 incentive payments..