While concerns over COVID-19 and resulting global travel restrictions significantly reduced trips taken in the past year, travel industry professionals say the future is brighter than it may seem.
As vaccination efforts continue, they say the pandemic will have some lasting effects on how and where people will travel, but overall, the travel industry itself will recover as it has after previous disruptions.
After both 9/11 and the Great Recession, experts predicted travel would never be the same as people would be afraid to travel overseas because of terrorism and a third of hotels would go out of business during the recession, said Roger Dow, president and CEO of the U.S. Travel Association.
“None of those things happened,” he said. “Travel came back stronger than it had been before.”
Travel certainly changed, he said, citing the air travel security protocols that came after 9/11, but travelers adjusted to them. After the Great Recession, travel snapped back in 2009 for 10 straight years of each month being bigger than the previous month.
Dow believes the travel industry will come back stronger than ever after the pandemic, but that recovery will probably take until 2023. Naysayers are predicting it will return in 2025, but Dow is more optimistic.
“The last part of this year is going to be good, not great,” he said. “2022 is going to be a much better year, still not back to 2019. I think 2023 will blow the doors off, exceeding 2019 numbers.”
How People Are Traveling
MMGY Global has been managing its Travel Safety Barometer over the last year to determine people’s level of perceived safety for travel, Chief Operating Officer Craig Compagnone said. When the company began first tracking this in April 2020, 70% of travelers said they felt taking a trip by car was safe. A year later, 78% of travelers feel car trips are safe.
“All told, travelers have basically said throughout this entire time they feel safe traveling by personal car,” he said.
When looking at the barometer for domestic air travel in April 2020, 27% of respondents felt it was safe, he said. That figure has increased to 46% this year. While travelers still view road trips as safer, there is movement in the perceived safety in air travel, he said.
“I think that will only continue to increase as we see the vaccination rates rise,” he said. “We do have data as well that certainly suggests the large majority of travelers see vaccination as a sign of recovery and the sign of safety. It correlates directly with interest in traveling for the next six months.”
Prior to the pandemic, road trips in the U.S. were gaining in popularity, Compagnone said. MMGY published a report in 2009 on the return of the great American road trip. Many travelers driving instead of flying to a destination were after the road trip experience as well as being outdoors more.
“I do think road trips will continue to be a really, really core component of travel in the next few years, but I don't necessarily think it's driven by this pandemic,” he said. “I think it was something that we were seeing happening before and we'll see again happen after.”
At least anecdotally, airlines are indicating they’re seeing more demand by opening up more routes, Compagnone said. After removing cancellation fees during the pandemic, they’re moving back to having those fees as well as change fees.
“The industry is starting to tell us that they believe the shift is coming,” he said.
After 9/11, people reconsidered how they were going to travel, Dow said. If the trip was a four-hour drive or less, 60% of the people chose to drive because it meant less hassle going through airport security. He expects a similar situation now.
“Drive will definitely increase,” he said. “People feel more comfortable when they’re with their own family unit in the car.”
Because so many will choose to drive for leisure trips, that will again affect the popularity of destinations, particularly those with outdoor demand drivers, such as areas with mountains, National Parks and beaches, he said.
Partially for this reason, downtown leisure destinations are going to take a while to come back, Dow said. They will come back in the long run, but short-term, they won’t see much leisure travel.
As more people do travel by plane, they’ll tell others how safe they felt while flying because of the precautions in place, he said.
“It's going to be people watching their friends and their family, and when they come back and report, then you'll start seeing air travel pick up quite a bit,” he said. “I think this is going to be a very strong summer. I think this is the summer that the airlines actually go into the black.”
International Travel
International travel can’t resume until there’s a consistent set of standards across multiple countries, similar to how countries reworked security standards following 9/11, Dow said. It took time for so many countries to achieve these standards, but now all travelers are used to the screening process.
It's likely that for the remainder of this year and into the first half of 2022, travelers are going to need to pay attention to what other countries are requiring of those arriving, he said.
“There’s going to be a patchwork of what people are requiring, and then it will smooth out into a consistent requirement,” he said.
In the U.S., Dow said his organization is in favor of mandatory testing for all inbound travelers. It opposes, however, testing for domestic flights. There are 15 to 20 gateway airports welcoming international travelers in the U.S., but requiring testing for the roughly 800 airports handling U.S. domestic flights would take testing processes beyond their capacity.
The U.S. government should also set a date to try to bring back international travel, because if the timing is ambiguous, it’s going to take longer, he said.
International travel remains a wildcard for Jan Freitag, senior vice president of lodging insights at STR and national director for hospitality market analytics at CoStar. For U.S. travelers headed abroad, would they feel safe traveling internationally knowing vaccines are not well-distributed in other countries? Or, if they are vaccinated themselves, would that not matter to them?
There has been a lot of discussion, particularly in Europe, about vaccination passports to enter other countries, Freitag said. Other governments may require travelers to prove they have received the necessary number of doses depending on what vaccine they received and have allowed enough time to pass to be considered fully vaccinated.
It’s a familiar concept as travelers need vaccinations against other diseases depending on which country they are visiting, he said. The question is what will be considered a good-enough record.
“That's going to be an effort, it’s going to take a while,” he said. “You’ve got to make it tamper-proof.”
Lasting Effects
There will be significant changes in travel because of the pandemic, Dow said. Health and safety will be the new hospitality. Just as hotels receive ratings on quality of service and the facility, there will be ratings on health and safety protocols. There will also be more contactless technology adopted and biometrics used at airports.
“All those things are going to move along much faster than they had before and become part of our everyday life,” he said.
When the pandemic began, industry experts sought some federal relief to help them through the summer, completely underestimating what the full needs would be, Dow said. The initial response was a patchwork effort, but the industry got its act together. While everyone hopes this never happens again, if it does, they will be better prepared in how they respond.
“I think we'll be able to move much more quickly and thoughtfully and in a very positive manner as an industry because we've been through this,” he said.
After what the travel industry has seen over the last year, its players will see things ultimately return to normal, Compagnone said. Coming out of the Great Recession, the travel industry saw similar discussions about how travel will change and how people will change how they travel, but eventually travel returned to the norm.
“There will be a lot of market correction to this,” he said.
There are a number of things the pandemic has highlighted that will continue to be trends, such as people taking road trips and sustainable travel, he said. One thing that doesn’t appear to be a factor is the affordability of travel.
This summer will see a lot of leisure travel, but the booking windows will remain pretty short as people monitor vaccination rates, he said. Moving into the third and fourth quarters, leisure travel will continue to drive demand. While occupancy might dip in the fourth quarter, the industry will also see more normalization of bookings, both on booking windows as well as their mode of transportation.