Doom scrolling is finally starting to take a back seat. According to Fortune, young travelers are swapping their screens for real-life adventures, and it's a big win for the travel industry. However, people aren't just traveling for the sake of it. They're not in a rush to check off every tourist item. Instead, they want to embrace cultures and meet new people.
Multiple years of staring at screens have created a nostalgia for a stronger human connection, and more people are taking action on that impulse. Here's how this shift can impact the economy and investment opportunities.
Digital Entertainment May Become Less Attractive
As people travel more often, they will have less time for digital entertainment. Some stalwarts like Netflix (NASDAQ:NFLX) may continue to grow during this stretch due to their monthly subscription models. The video streaming giant delivered 16% year-over-year revenue growth in Q2.
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However, as people travel more often and seek human connections more frequently, digital entertainment may take a back seat, prompting more people to question their monthly subscriptions.
The big players have a better chance of maintaining their high revenue numbers than smaller digital entertainment resources. That's because the leading media companies have more TV shows, news shows, and movies, offering more options for every dollar. The pandemic initially sparked revenge traveling as lockdowns were lifted, but it's no longer a fad. This development is a headwind for digital entertainment companies.
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The Travel Industry Is Adapting To Consumer Preferences
Airlines, hotels, and booking sites are expected to win big as more people travel. However, these companies must continue to adapt as consumer preferences change. Some hotel chains have shifted from focusing on square feet to offering outdoor experiences for their guests.
Some companies are also adapting to focus more on experiences. Airbnb (NASDAQ:ABNB) introduced Airbnb Experiences several years ago. It's a complementary segment that allows customers to book experiences instead of just hotels. Some of Airbnb's popular experiences include an Arlington, Texas, tour with storytellers, a deep dive into Georgetown, Washington, D.C.'s secret spy stories, and hugging a Scottish Highland cow on a family-owned farm.
A recent McKinsey report demonstrates that the shift to experiences will likely grow over time. The 2024 report cited the range and quality of local activities as a decisive factor for 63% of travelers. Per the report, they also want to "experience authentic local customs and cultures."
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Concerts Are Taking A Back Seat
Some of the travel boom may be coming from people who previously attended concerts but prefer real-life adventures over those events. While Taylor Swift sold out stadiums during her recent "Eras" tour, the same can't be said about other singers.
A Reddit post gained traction as people discussed how high-profile artists like Jennifer Lopez, The Black Keys, and Lauryn Hill had to cancel some shows due to low ticket sales. Exorbitant prices, lower-quality music, and lip syncing were some of the complaints. Even Beyoncé isn't selling out concerts like she used to, and an insider referred to it as "upsetting and quite frankly shocking."
Travel companies and service providers that can offer authentic travel experiences at fair prices have a compelling opportunity. More people want to travel, but their priorities and expectations have shifted.
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