When will the travel industry recover? That’s the trillion dollar question, and no one has all the answers, but travel has faced great adversity and crisis before, and it’s always come back stronger than ever. Fun fact – recovery is happening faster with each new crisis.
If you, like many other people around the world, are feeling a bit of cabin fever and are wondering when you can expect travel might get back to normal, here’s a look at how things have worked before, and how quickly things might return this time around…
Unlike past crises, such as the financial collapse of 08′, there’s less certainty about when the global pandemic will slow down. Most signs point to the initial outbreak in late November early December of 2019 in Wuhan, China and China is now recovering, with greater mobility of people and many returning to work.
That lends *some* hope that for areas experiencing the worst now, 6 months may be a drastically different (and better) time. Roughly a month ago, Korea and Japan were the epicenters of the next big outbreaks, but life is largely back to normal, relatively speaking in both countries already, albeit with more hand washing and social distancing.
An optimist could hope the same in Europe and the USA, but lack of early preventative measures could mean these areas don’t recover quite as quickly, and the worst peaks may still be yet to come. Could it be May? Sure. June? Sure. August – it’s all possible.
That’s not to say travel will rebound in any large way this summer, it’s just a hope that the worst of the pandemic and health concerns will be behind us, and the thought of actually traveling again will return to the collective mind.
Looking at past periods of global fear, economic slowdown and pandemic, such as September 11th or the financial collapse of 2008, a “full” recovery tends to take three to five years, but the industry typically comes back larger than ever before in the years following, and after a decade is larger than it was.
But that’s a full recovery. You can expect your flight or favorite hotel to be ready and available long before then. When it’s safe to do so, the sooner you put your faith in travel again, the better.
One big positive: the recovery trend is getting faster with each new crisis. Travel jobs and general travel demand bounced back twice as fast after the 2008 collapse as it did post 2001, which gives hope for an optimistic outlook in 2020.
If you look at occupancy rates in hotels, average rates charged – aka revenue per available room, and employees in the accommodation sector, things tend to reach their old time highs within three – five years. People get back to work, and rates recover in this time, if history is any judge of the future.
Interestingly, airlines are slower to reproduce jobs, but tend to have revenue bounce back faster. This could be attributed to the mass trend of ancillary fees, like charging for checked bags and seat assignments, which airlines introduced in the post 2008 world.
Other factors can be crucial here though. Circa 2010, as airline profitability was rebounding, unexpected fuel costs sent airlines into bankruptcy and created consolidation – aka mergers – particularly in the USA.
A broader travel trend, particularly as the world dives into mobile phones, is the amount booking websites are taking in. Post 2008, most online travel agencies were back up to where they were before by 2011. This is a better gauge of general demand than analyzing airlines or hotels on their own, since outside factors are less of a thing.
Long story short – most people feel like they want to travel again within 3 years, which is a positive for the world. And even though that’s a long time, it’s not all doom and gloom in the meantime.
Destinations can actually be the most resilient in the face of adversity. After the tragic 2015 terrorist attacks in Paris, tourism recovered within months. After similar horrific incidents in London and Madrid, tourism bounced back in mere days in some instances, and had no effect at all in others.
Disease however, can be slower. WTTC studies show that areas afflicted with disease or outbreaks like the present tend to take 20 months or more. In reality, it just means destinations will recover at a pace more in line with the broader industry, this time around.
So when will travel actually recover? It’s a long story.
But many in the industry are predicting a cabin fever bump, for mid or late summer travel in 2020. Basically, everyone has been cooped up for too long, is desperate for a getaway, and there’s an artificial bump in demand expected during summer holidays, or early fall.
Everyone will need a mojito on a beach when this is all over.
The key here, is that it’s artificial. With uncertain economic times and still uncertainty around the pandemic, hotels and airlines don’t expect to see a sustained huge rebound in a matter of months, even if business is great for a period of a few weeks, or even months.
Many conferences across all business sectors were pushed back from spring until fall/autumn, and demand will likely bounce back quickly for near term travel needs like these, but not in a sustained way. Come November, it’s expected to slump again, with fewer people having the funds, trust or time to make any discretionary trips.
Great Things Emerge
In unprecedented times such as these we’re living in, great things tend to emerge. An emergence of travel apps mean the next great booking platform may well be on the way, and new industries will form to cope with changing trends. In other words, people who find themselves out of their current travel industry job may find a new, better and more sustainable one for the future.
Airbnb was created after 2008, and it’s revolutionized how people see travel, whether they use the service or not. With so many brilliant people stuck at home around the world, one can only hope and believe that the next great idea is out there, and it’ll bring work to many, and travel to more.