Even when health officials or governments open borders again, will the public come rushing through them, ready to board that flight or jump into that hotel bed?
Unlike previous global issues, such as the 08′ financial collapse, fear is a dominating factor in the present, and it’s not the only large factor effecting public opinion. The travel world is in flux, and after all time records in 2019, studies suggest it may not reach those peaks again for three years.
A social undercurrent was already swirling in 2019 before global health became a grave issue. Flight shaming was on the rise, as were calls for reducing the global environmental impact of all travel, and fast. There’s serious merit to these concerns.
Fitch, a prominent credit ratings agency, has been the most vocal about potential for travel rebound in recent weeks, issuing debt downgrades on airlines in the United States and abroad.
Delta, United, Southwest, British Airways, Alaska, Spirit and Hawaiian are just a few airlines to receive credit rating downgrades in the last week, and in each report a very common thread emerged. Fitch believes air travel demand will not rebound fully to 2019 levels until 2022-2023. If it doesn’t, broader travel demand including guided tours, or hotels won’t either.
In line with GSTP musings, Fitch sees a temporary travel boom in the second half of 2020, with the caveat of potential for future border closings, if a second wave were to emerge. France has already expressed potential for border closures up until September, which would effectively kill summer travel.
Beyond then, greater economic factors, and changing landscape of air travel only beginning to come into focus. Sadly, it’s not a pretty picture.
Businesses which relied on in person contact are discovering online conferencing capability, and with savings potentially in the millions via online video calls, versus client dinners, flights and hotel suites, many sales teams won’t be taking to the skies. At least, not as frequently.
“Save it for the big deals”.
With over 16,000,000 job losses in America alone already, there’s also the viability factor, even if travel demand exists. Many travelers around the world are yet to feel the full effects of a global credit crunch, and further layoffs are almost a certainty, which means many who may wish to travel simply won’t be able to.
Fitch sees discretionary consumer travel like this as a severe weak point in the coming year, to two years.
Will planes take to the skies again in months to come? Absolutely. Will borders begin to re-open in the next two to six months? Absolutely. But will planes fly full, frequently and directly to where you want to go, non-stop? That’s doubtful.
And if that’s doubtful, it’s also doubtful the world will take up staycations as a new global sport, so hotels, tour guides and transportation companies will struggle too. The travel industry will follow larger global economic trends, and a full economic recovery won’t come for years.
It’s not all doom and gloom though. Empty seats and empty hotel beds means opportunity for those who have money, miles or vacation days to burn. Ideally, all three would be nice. When planes are empty, airlines are more likely to release coveted seats using points, or dig into loyalty programs to entice travel. The same goes for hotels.
How can an airline accelerate the recovery and overcome stigmas of fear? Just about everybody has a “price”, and it’s safe to expect airlines will test yours, once clearer return dates emerge. Air travel may not fully rebound for years, but that’s not entirely a bad thing.
Beaches are recovering, air quality is on the rise, and if anything no one will take the simple joy of catching a flight for granted again. Those who invest a little time and effort to maximize the game of travel loyalty will see more enticing offers than any in the past decade, so now might be a great time to do that.
When travel does rebound, the clever ones will have already enjoyed 2-3 years of empty middle seats, upgrades to hotel suites and all the other perks of low demand and juicy marketing offers to get you out of the house.