Travel and tourism is perhaps the segment that has suffered the most from the pandemic, not just because there were government-induced lockdowns across most of the world, but also because travelers themselves have been wary about the risk. They’ve also been concerned about the economy and how it will impact them.
The decline is evident from Transportation Security Administration (TSA) data that says it screened just 441,255 passengers at U.S. airports on Jun 7, 2020 compared with 2,669,860 a year ago. Encouragingly however, this is the highest it has been since the March 22 number of 454,516. March 22 was also a Sunday. So perhaps it’s an early sign that travelers are returning.
STR data also shows an improving trend. While off 43.2% from the comparable period in 2019, hotel occupancy was 36.6% in the week between May 24 and May 30, the seventh consecutive week of higher demand and occupancy. Of the top 25 travel markets, New York, New York (47.6%); Norfolk/Virginia Beach, Virginia (44.2%); Tampa/St. Petersburg, Florida (44.0%); Phoenix, Arizona (42.5%); Atlanta, Georgia (40.7%); and Detroit, Michigan (40.4%) had the highest occupancy rates.
Adam Sacks, of Tourism Economics seems to be in agreement, although he doesn’t have high hopes for air travel. “People are going to be traveling and taking summer vacations this summer – it’s just going to be different,” he told CNN Business. “Traveling is going to be weighted toward traveling within one’s driving region.” [pymnts.com]
Sure enough, travel and leisure companies are busy extolling the virtues of road trips, adding layers of fun, entertainment and “safety” between the long hours at the wheel. And of course, being cooped at the wheel is a whole different dimension to being contained within four walls. Pinterest (NYSE:PINS) is also talking about it.
The June 4 Tourism Economics report from the U.S. Travel Association says that more than half of the respondents surveyed feel safe about taking a road trip, which is a substantial improvement from mid-April when 40% were okay with it. Close to half feel safe visiting friends and relatives (it was 30% in mid-April) and 35% also don’t mind staying at hotels (it was 20% in mid-April). So you can see the shift in sentiments there.
Visiting family and friends, taking a road trip, staying at a beach resort or visiting a national park are on top of mind for people looking for emotional well-being with leisure travel.
The COVID-19 Harris Poll Tracker, based on a survey conducted between May 20 and 22, confirms these priorities (52% of those traveling want friends and family while 45% want a change in scene). However, only 22% of respondents plan to travel in the summer, while another 25% will travel in the fall. While more than half of surveyed business travelers who travel frequently expect to travel this year, close to 40% think they’ll travel next year while the rest think it will be in 2022.
But whatever the purpose of stay, vacation homes will beat hotels hands down this season. According to a Bloomberg report, Airbnb is seeing robust bookings, with “more nights booked for U.S. listings between May 17 and June 3 than the same period in 2019” and general strength in domestic travel across many countries of the developed world. Expedia’s EXPE Vrbo and Priceline’s Booking Holdings (NASDAQ:BKNG) Inc. BKNG are also seeing acceleration in domestic vacation-rental reservations.
Bottom Line
The data suggests that the recovery in travel will be gradual although there will be a summer spurt. Also, those that will travel will be looking to spend time with friends and family, or simply, to get away. They’ll also be using road trips more than anything else and they’ll be staying at sterilized vacation homes when they can.
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