What Happens When the Travel Boom Ends?

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Australian womenswear brand Sir was practically made for revenge travel. Its post-2020 campaigns featured models wearing linen dresses and playful swimwear in Fiji, Marrakech and other far-flung locales shoppers dreamed of visiting after long months of isolation.

More recently, Sir’s photo shoots have centred around more subdued pieces in ordinary settings on the streets of New York, as if to persuade shoppers that vacation wear can be everyday apparel too.

The marketing pivot is an attempt to keep the brand relevant even as the travel boom peters out, according to Sir founders Nikki Campbell and Sophie Coote.

Model in pink suit sitting in Soho, New York.

“There’s definitely going to be people travelling next year, but in general the customer sentiment is, ‘Let’s really consider where we spend,’” said Coote.

Airlines are expecting a record 4.7 billion passengers next year. But growth in the travel category is undeniably slowing. Consumers who made up for lost time after the Covid-19 vaccine rollout in 2021 are starting to rein in spending, put off by soaring prices for airfare, hotels and entertainment. Signs of weaker demand include a drop in airfares in recent months and lower occupancy rates at US hotels, according to PwC. Even Disney World saw lighter attendance this summer.

A travel slump would be devastating for countless luggage, swimwear and resort brands that supercharged sales during the post-pandemic boom. Many are trying to get ahead of the problem by meeting the consumer where they are — at home, increasingly — rather than where they wish they were.

Luggage maker Béis, for instance, will lean on its smaller travel accessories such as duffels and crossbodies, ideal for day trips or a weekend at a local resort town rather than an around-the-world jaunt, president Adeela Hussain Johnson said. Swimwear brand Andie, meanwhile, will cut back on its more fashion-forward seasonal pieces, which tend to be impulse purchases, in favour of more evergreen options. One best seller is a monochrome one-piece that appears in google searches under a page titled “timeless essentials.”

“If there is a travel recession in 2024, it’s easy for us to pull the levers of the products we sell,” said Melanie Travis, founder of Andie. “You don’t need to take a big trip to enjoy your backyard, or your local pool.”

While inflation has eased in recent months, prices for everything from groceries to childcare are still far higher than before the pandemic. As a result, shoppers are cutting their expenses, starting with discretionary categories, travel included.

People will still buy sandals and bikinis when summer comes — just more affordable options.

Sir includes a few items at entry-level price points in each collection to capture aspirational shoppers, said Coote. A linen mini dress retails for $360, for instance, while a silk taffeta evening gown sells for $1,200.

Béis has an entry-level product line called the Béisics collection, which includes duffel bags, backpacks and weekender totes. The Béisics tote bag costs $78, whereas its classic best-selling weekender retails at $108. The brand also has an upscale line made of cactus leather.

“The biggest insulation is how you are appealing to different audiences while still being true to your brand,” Johnson said.

Coming out of the pandemic, travellers were drawn toward bright colours, bold prints and fun, pieces like crochet tops and camp collar shirts, according to Justin Berkowitz, men’s fashion director at Bloomingdale’s.

But lately, he’s seen a shift, with a new emphasis on versatility.

“With a collared shirt, for instance, instead of it being a very bold hibiscus floral print, you’re seeing demand for maybe a much smaller geometric print,” he said. “It works at the beach, for the office, and it works for a dinner date.”

Another example is the knit polo, which has emerged as a men’s hero item at Bloomingdale’s because it’s both dressy and casual, and looks just as good under a linen suit as it does styled with swim trunks.

For women, the printed mesh dress serves multiple purposes.

“Our pieces can be worn on and off the beach, and people really make use of that,” said Louisa Ballou, whose namesake brand is known for body-hugging mesh dresses in a variety of colourful prints. “There’s a versatility to it, where you can wear it as a bodysuit or even a slip dress.”

Travis of Andie swimwear said she anticipates that if travel demand wanes, it’s the seasonal drops that’ll suffer in demand rather than her brand’s classic styles. And in that case, she would pull back on the volume of trend-forward merchandise — even if it means leaving sales on the table.

“The last thing we want is seasonal products sitting on our site forever,” Travis said.

It’s a tough decision, because most companies want to drive top line growth and the only way to do so is to take on a higher inventory risk. But if the merchandise doesn’t churn, then discounting is inevitable, which will hurt margins and dilute brand equity.

“For brands that care about brand image and don’t want to rely on customers who are always looking for a promotion, then the right choice is to right-size the buy based on where the market is going,” said Kelly Pedersen, retail leader at PwC. “Some early shifts there would be really smart.”

Ultimately, the key is to be nimble: Chase what works, and pull back from what doesn’t.

“If you listen, consumers will tell you what they want,” said Johnson, pointing to Béis’ upcoming resale programme as an example. “If something isn’t working we can pivot, and if a consumer says, ‘I want this in this colour,’ we can accomplish that in a short time.”



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