Welcome to our new content series “In Conversation With”, where we sit down with industry experts, executives and thought leaders to discuss all things travel, technology, trends and more. In our next conversation, we sit down with Seth Borko, Head of Skift Research.

We discuss a wide range of topics including Seth’s journey from the world of finance to the world of travel and hospitality and how travel continues to be an aspirational purchase for the majority of people.

You’ve had an interesting career pivot from the financial markets world to the hospitality and travel world. Can you tell us what that experience and transition has been like?
I will say first and foremost, I love the markets, and I still consider myself a markets guy at heart. I was working at a large bank doing equity markets and finance, so there's a couple of different pieces there. I did derivatives for a while and then effectively moved on to what they call equity strategy. We were analyzing businesses and making calls about stocks and talking to clients about what stocks to buy, and all that fun stuff, and I loved it. I will admit that I got a little burnt out. I’m a fan of markets, but some of the market stuff, you know, we’d have a client who would call you and be like, “why is the stock up $2?” Next day, “why is the stock down $2?” The thing I loved the most was analyzing businesses and I was ready to make a change at a certain point. I applied to some other finance jobs, and then I said, “you know, I love to travel, let me try to work in travel”. After a while I came across Skift when Skift Research was in its infancy and I said, “Whoa! this is a chance to be in travel, to be in hospitality, to look at businesses, to look at markets, do all the stuff that I like to do. Wow! I can't pass that up.” And then I made the jump, and I've been here ever since, and now I'm stuck. Happily stuck.

Has anything surprised you?
There's a couple of things that surprised me coming into the hospitality industry. For one, I am endlessly fascinated at the level of depth and vendors and distribution pipelines and tech and everything that goes into the travel industry. I think it is totally taken for granted by nature of the industry. They try and hide that stuff. It's kind of like when you're in Disney World, and they want to hide all of the mechanics and the travel industry tries to hide stuff too. And when you dig into to it, we need the tech systems, the property management, the channel management, the revenue management; the revenue management needs a good data feed to make it run. And that's just on the technology side. Then you've got the distributors, the wholesalers, the insane amount of work that goes into maintaining and operating a loyalty program of any scale, let alone the scale some of these larger companies. Plus, hotel brands have the property inspections, the marketing funds, it is unreal, the level of complexity, and then add into it, operating across languages, operating across geographies. It’s truly remarkable.

Can you talk about where you see travel fitting into the consumer spending mix?
We get asked if travel has become a necessity rather than a discretionary purchase. I would say that travel has become, let's call it, less cyclical. It’s becoming more of a need to have to the point where, when people feel that very first pinch in their wallets, they don't cut their trips entirely. Obviously, if you don't have money to eat or to live, you are not going to be traveling. But travel has certainly become a higher priority within the discretionary bucket, such that it is starting to blur the lines between what is truly discretionary and what isn’t. I think that trips have become a critical part of people's leisure and recreation. I think the key part is that we dream about travel. Remember, travel is about selling those dreams. Travel is, in my opinion, the single most aspirational activity you can do right now. Consumers are not going to cut their trips unless things are truly dire. But they can trade down. So when we say that travel is still discretionary, maybe the consumer is not going to cut their trip, but they could trade down. We do a quarterly survey where we ask 1,000 American travelers about their travel behavior, and we ask specifically about costs and inflation and things like this. We say, “how do you expect your travel spending to change over the next 12 months?” And we are at the highest levels in the history of our survey of people saying yes, it’s going to increase. But there is a caveat. 67% of people told us that their vacation plans had been impacted by higher price levels across the travel industry, and only 6% deferred or canceled their trip. What did the other 94% do? They use alternate transportation, they spent less to travel to the airport, they pack less to avoid baggage fees, and they pick a cheaper hotel. What we see is that people say, do I want to spend more than I did last year? Yes, but I might make more budget conscious choices on where I choose to go, how I choose to spend my money, and where I choose to stay, and how I choose to get there.

The latest forecast from the National Travel and Tourism Office shows that international visits to the U.S. still were not above pre-pandemic levels, however they expect 2025 figures to finally surpass 2019 figures. Who do you see being the winners of this increase in international traffic?
Well, we've seen in our data and the STR data that the pricing power in the luxury space has been extremely significant. It's probably been the segment most able to take pricing power to cover the cost of inflation. I think that, especially in the context of international inbound travel, those that are coming from, let’s say China to the U.S., those flights are quite expensive so you are already selecting for a pretty wealthy audience. I think that they want that high end experience. I know that when Americans travel abroad, they like to use Airbnb. It’s a big piece of the international travel component, but I think of it as a little more outbound travel than inbound travel.

What is one book everyone should read?
I want to give credit here to Jeremy Kressman, who is the Director of Skift X. There is this amazing book called, The Sushi Economy. The idea is effectively tracing the history and economics of sushi restaurants and sushi as a dish, and how it became such a mainstay and staple around the world. It's about the fisheries, the market, the economics of actually running a sushi restaurant. It's about all sorts of stuff. Obviously there is a travel component with ANA airlines running a Tuna cargo business. But I love the depth of it. It's kind of like how we spoke about the depth of the hospitality industry. I love my tuna, and it's like, wow; the fact that I am eating a spicy crunchy tuna here in New York City, there's a huge amount of history and supply chains and economics that went into making that happen.

If you were going to open a hotel today, which market would you choose and why?
That’s easy. I would open a dive resort, maybe somewhere in Belize. Scuba diving is a big passion of mine. I'm a numbers guy, and I'm pretty sure that the math on dive resorts does not pencil, so if you're going to do it, it's gotta be something you really like. That’s the whole idea about hospitality. You gotta love it.

Seth Borko is the Head of Research for Skift. He joins us from his home in New York City.