Financial Benefits of Group Travel

Tourism is an economic engine. Pre-Covid, the economic impact of tourism was at an all-time high, generating $1.9 trillion in 2019 and supporting over 9.5 million American jobs. Of course, as we experienced over the past few years, a lack of travelers creates ripple effects everywhere you look. In 2020, total economic output generated by travel and tourism fell $982.5 billion from the previous year.

Fortunately there has been a resurgence in group travel, which bodes well for destinations across the country. In fact, World Travel & Tourism Council predicts that by the end of 2023, the economic impact of tourism will have either fully recovered to pre-pandemic levels or be within 95% of full recovery.

Group travel breathes life into our economies. When there’s an entire group traveling together, the financial stimulus multiplies dramatically. In addition to a larger amount of spending at one time, group travel can often provide more efficiencies for the places they visit. Undoubtedly, the prevalence of more group tours contributes significantly to this surge in numbers. Truly, the more the merrier!

Group tours may look a little different nowadays, but the benefits they bring to the economy remain the same. In the travel, tourism and hospitality industry, “heads in beds” means money for the local economy. When people stay in hotels, they pay several taxes. In addition to state and federal taxes, there is most often a bed tax. This is a county tax where those dollars go directly to the community. There are many more economic factors that go beyond collecting tax dollars. When we travel, we are literally pumping money into the local economy. We eat at local restaurants, buy gas for our vehicles, shop at local stores, buy tickets for local events, and pay admission fees to attractions and cultural institutions. In this way, every single visitor brings an opportunity for economic impact.

Here are seven ways group travel financially benefits destinations and attractions:

1. Restaurants

Group menus mean there is no need to make individual meals. Often, group menus provide a few different options, or maybe a buffet limiting the time and cost of creating several different meals served at the same time. The seating for a group is also different. A group will arrive and depart at the same time, leaving opportunity for more open tables throughout the day at a restaurant, rather than a few people sitting at tables and limiting the table space for more patrons.

2. Guided Tours

One group of 30-50 people brings in more admission fees at one time, and a tour guide is usually needed. The guide will be paid regardless if they have a couple of people or a group – but the attraction reaps the benefit of more people entering at one time.

3. Tickets

It is easier to fill seats in a theater with a group of people, instead of working to fill the seats just a few at a time. Bulk ticket sales in advance of a show benefits the groups, who may get a small discount, and the theater, who knows more seats will be filled.

4. Instructed Experiences

Similar to tour guides, an instructor is needed for guided experiences. This could be a chef for a cooking class, or an artist for a painting class. Whether it’s a few people or a group, the class will take place. But the amount of money a group brings is much higher than individuals signing up.

5. Small business

Of course, there is a cost to keeping a business open. One group can cover an entire day’s (or more) operating expense for a small retailer, leaving the other sales of the day going straight to profit.

6. Accommodations

It’s easier to have a group fill many rooms at once versus selling rooms one at a time. The group may receive a small discount for a bulk booking, while the hotel is secure in knowing it has the income to cover staff and expenses. This is especially helpful during slower times, such as the middle of the week.

7. Economies of scale

In many cases, group travel is more affordable as things are bought in bulk and often will be discounted, so the cost per person is less than it would be traveling individually. This gives the traveler a discount to experiences they may not otherwise be able to have, and brings money into the destination.

The bottom line is that group travel is a great way to increase foot traffic to businesses, and tax dollars to local communities, while providing a cost-effective way to travel and have unique experiences. The bus is leaving – don’t miss it!

Check out our tips on how your destination can become group ready.