Travel Blues Here to Stay

The WSJ reports Travel’s Covid-19 Blues Are Likely Here to Stay—‘People Will Go Out of Business’

After declaring that 2020 was the worst year for tourism on record, with one billion fewer international arrivals, the United Nations World Tourism Organization says prospects for a 2021 rebound have worsened. In October, 79% of experts polled by the agency believed a 2021 rebound was possible. Only 50% said they believed that in January, and some 41% didn’t think travel would reach pre-pandemic levels until 2024 or beyond.

As of Feb. 1, air tickets issued for international travel in the coming six months were 15.5% of what they were in 2019, down roughly 2 percentage points compared with Jan. 1, according to travel analytics company ForwardKeys. Scheduled flights this month are down nearly 50% globally compared with February 2019, with some markets down about 90%, according to data company Cirium.

In the U.S., the demand for hotels isn’t forecast to return to 2019 levels until 2023, with room prices not fully recovering until 2025, according to a joint forecast from hotel-data company STR and Tourism Economics. Gross travel bookings in the U.S., including hotels, air tickets and car rentals, are expected to still be below 2019 levels in 2024, estimates travel-market research firm Phocuswright. It forecasts the recovery in Europe will be even slower.

Travel Surveys 

The last set of surveys was too optimistic. The vaccine was no panacea, yet.

Are the surveys now too gloomy? 

Creatures of Habit

I had been thinking about this topic a lot recently. Those surveys are gloomier than I expected even though I would not have described myself as a bloomin' optimist to say the least.

But take my own personal experience as a possible example. We went to karaoke every Friday and Saturday night and often on Tuesdays as well. 

We missed it very badly at first but less so now. 

Attitudes Change

What about all the people who traveled to work who ate lunch out everyday but now stay at home?

What about Zoom meetings instead of meeting in person? 

Some people traveled twice or three times a year but have gone nowhere for a full year now. 

Is there pent up demand? How much? Some will decide, hey I am happy now just to stay home or travel to closer destinations.

What about all the millennials who stretched to buy a home and need to spend less elsewhere?

Boomers like everyone else are getting older. At some point, for health reasons not necessarily related to covid, activity slows.  

There are lots of reasons to believe the new surveys. 

Good News?

If the surveys are accurate, airplane tickets and lodging will remain cheaper even in peak season. 

There may not be someone sitting next to you in the plane when you travel and ability to easily reschedule tickets at no cost will be here for at least a while.

This is good news not for the industry, but for people willing to travel. 

Competing Forces

The more people attempting to take advantage of the good news and cheaper prices at a personal level, the faster prices and demand will recover for the travel industry.

Are You Traveling Less and If So Do You Miss It?

Mish