Business has increased for a majority of tour operators, but the challenges they face in building multiday itineraries have led them to change the price, timing, components, and even the existence of some tours they offer, according to a new report from the National Tour Association (NTA).
In a survey conducted in September by the association, 58 percent said their company will finish the year with sales that are better or much better than 2023, while only 17 percent said their sales dropped this year.
Looking ahead to 2025, more than half of NTA buyers (54 percent) said their company is poised to perform better than in 2024—with 14 percent of them saying much better—and 39 percent expect to see a similar amount of business.
Asked to assess the significance of challenges they face with four types of tour suppliers, operators rated hotels as most challenging, followed only slightly by their concerns about restaurants, motorcoaches, and air travel. Operators cited higher rates as the most serious factor they face, followed closely by unfavorable terms. Other factors included staffing shortages among suppliers and concerns about the overall economy.
Comparing rates for 2025 to those they’ve seen this year, tour operators report double-digit price increases for each of the four categories of suppliers: hotels, restaurants, motorcoaches, and air travel.
“This is why pricing is the number one challenge for operators,” said NTA President Catherine Prather. “Before COVID, a normal year-over-year increase for supplier rates was 5 percent, and now, four years past COVID, tour operators are experiencing rate increases more than double that figure, and, in some categories, even close to tripling it.”
Additional report highlights:
• Nearly two-thirds of responding operators (65 percent) said that high rates, unfavorable terms, or both have led them to change suppliers in a destination.
• Almost half (47 percent) have changed to a different destination that provides a similar experience.
• And more than four out of every 10 operators (44 percent) said they have dropped a tour altogether because of suppliers’ rates and/or terms.
These issues will be addressed at NTA’s Travel Exchange event in Huntsville, Alabama, this November 17-20. More information can be found at ntatravelexchange.com.
“We’ll also provide an even better way to deal with these issues: In November, hundreds of buyer and seller members will come together at Travel Exchange,” Prather said. “They’ll have meaningful, face-to-face conversations in scheduled business appointments as well as organic conversations over a meal or a during a networking event. Understanding what your partners are facing and finding solutions are best done in person.”
Visit ntaonline.com for more information and the full report.
[10.22.24]