Travel Optimism Amongst Americans is Up – What Can We Expect Next?

Mar 05 / admin@aplbc

Over a year into the global pandemic, there are glimmers of hope that we may be seeing the beginning of the end of the crisis in the United States. Covid-19 cases and hospitalizations decline after a winter of holiday surge; vaccine distribution are progressing despite initial challenges; and the likelihood of a new federal aid package is on the way, although many of the details still need to be ironed out. Passing over half a million, the running death toll and the emergence of new strains are still cause for concern, and the long-term effects of the virus on American society on important factors like our health, education, and the economy, remain a bit hazy. But after a truly dreadful year, there is a reason to begin feeling optimistic.

How then is this optimism translating to travel amongst Americans this year and beyond?

Reasons for Travel Openness and Readiness

Since taking over the office of the presidency, the massive campaign by the Biden Administration to provide every American a mask combined with the push for ‘shots in arms’ by the end of July are producing positive thoughts and feelings amongst many, especially about their travel.

Every week since March 15^th, 2020, Destination Analysts has surveyed 1,200+ American travelers about their thoughts, feelings, perceptions, and behaviors surrounding travel in the wake of the coronavirus pandemic and explored a variety of topics. Their key findings from data collected as of February 21, 2021 presented these 15 Travel Sentiment Metrics that Broke Pandemic Records.

Positive Record Highs:

- - Optimism about the course of the pandemic in the United States in next month (44.2%)
  - Level of excitement about travel in 2021 (6.2/10)
  - Readiness state-of-mind around travel (60.2%)
  - Those who have received or know friends or relatives who have received the vaccine (62.7%)
  - Making of travel plans specifically in anticipation of vaccine distribution (34.8%)
  - Proportion who will take at least one leisure trip in the next 3 months (52.9%)
  - Happiness with ads promoting their own community for tourism (41.9%)

Positive Record Lows:

- - Perceptions of travel and leisure activities as unsafe (45.7%)
  - Strong concern about the virus’ impact on personal finances (52.2%)
  - Avoidance of travel until pandemic is more resolved (45.3%)
  - Avoidance of conferences and conventions (63.2%)
  - Agreement that travel should be for essential needs only (48.7%)
  - Travel guilt (42.7%)
  - Refusal to travel until vaccines are widely available (46.5%)
  - Tourists in their own community are unwanted (48.3%)

Recovery Signs and Expectations

It is clear pent-up demand for travel is emerging, a march back towards a sign of recovery but according to AHLA’s report full recovery is not expected until 2024. This year, we can anticipate hotel occupancy in the U.S. will increase from 44% to 52%, and further to 61% in 2022 (still below the 66% level in 2018 and 2019). Room revenue will reach $110 billion in 2021 and $144 billion in 2022 (down from $167 billion in 2019).

The report also highlighted that recovery of the travel industry will most likely be divided into these three phases: leisure travel, small and medium events, and group and business travel.

1. 1. The first phase of the recovery is currently being fueled by domestic leisure travel.

Leisure travelers tend to stay at hotels more on the weekends, and business travelers tend to stay more during the week. Since May last year, Saturdays have recovered by a larger margin and at a faster pace than Wednesdays, showing that leisure demand has recovered much faster than business travel. By the end of this year, 62% expect to travel more for leisure and 51% expect to travel more for business compared to last year.

1. 1. The second phase of recovery is likely to occur in 2^nd Quarter 2021, with small and medium events.

As widespread vaccine distribution continues to spur meetings and small and medium events, regional international travel begins to resume. Group and meetings related travel surpassed 6 million travelers per month in January-February 2020, but only reached 1 million in August-October. Group demand is forecasted to be down by 85% compared to 2019 levels through April 2021. Most business travel management programs are planning on utilizing fewer hotels in 2021 compared to prior years.

1. 1. The third phase of recovery is expected to resume in 3^rd Quarter 2021, with group and business travel.

Employers will play a pivotal role in helping to revive business travel. As face-to-face meetings with customers are a critical element, client and other sales-driving meetings will likely drive first business travel to return. About 29% of frequent business travelers are expected to attend their first business conference in the first half of 2021, 36% in the second half of the year, and 20% in more than a year from now. Group demand is expected to be 23% down into the fourth quarter in 2021 compared to fourth quarter 2019. Until majority of the Americans are vaccinated and rapid testing continually improves, industry conferences, trade shows, and other high-volume events will likely be the last to return.

Re-establishing Travel Confidence

There is no doubt the road to recovery will be challenging and require multi-dimensional strategies, but the signs are promising. Emphasized in a detailed analysis by Deloitte, The Future of Hospitality, re-establishing trust and confidence will involve these elements: physical safety, emotional support, digital security, and financial stability.

Physical: Trust that your physical space is safe

Emotional: Trust that your emotional and societal needs are being safeguarded.

Digital: Trust that your information is secure

Financial: Trust that your financial concerns are being served.

Recently, the travel industry took a significant step towards re-building travel confidence when the United States Centers for Disease Control and Prevention (CDC) announced it has updated its vaccine distribution guidance to prioritize “Traveler Accommodation” under its essential workers category, which elevated hotel workers to Phase 1c.

Outside of rebuilding confidence, businesses will have to pay close attention to the ever-changing travel behaviors. Gone are the days when attention-to-detail and unmatched service is enough. Travelers will expect the very best in health and safety. While the travel industry developed robust hygiene protocols to combat the virus, enhanced technology and practices – to rapidly test, track, and monitor – is equally critical in the future of travel.

When the dust settles, and the global economy begins to heal from this unprecedented COVID-19 shock, the world’s nations, firms, and individuals will look to navigate and adapt to this new normal.

How we mobilize ourselves in this time of change will define how successful we are when we come out the other side. I constantly need to remind myself that this crisis will only be temporary and any wins, however small, are still wins. Our team, at About Partners Luxury Brands Collection (APLBC) are always ready to help our partner hotels and serviced apartments around the world create ‘wins’!