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.
“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.
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.
I am fortunate enough to be working from home as a software engineer for a big company. I started collecting miles/points almost 3 years ago. Just last year, I was fortunate enough to go to Madrid in business on the Delta 330-300 and go to Japan on JAL first class RT. This was a first in my life on these seats and the experience was surreal!
You can count me as one of those that look forward to empty cabins for the next 2-3 years.
Although, from what I am reading, we are in a major recession that will last a lot longer than most people think. So to say that airline capacity will be back to 2019 levels in 3 years, is extremely optimistic. I really don’t understand why analysts are talking about going back to 2019 capacity levels, as if we need to get there, when we should just be grateful to even get some travel back online. In other words, from the last Great Recession in ~2009, it took 10 years to reach 2019 levels.
Just like the stock market , I think the travel and lodging industry was over inflated, with airlines devaluing points and miles and taking increasing travel numbers for granted, now it has all come crashing down due to a virus- planes will be clearer , airlines will probably have more flexible cancelation polices and there will be travel deals for the next 18 months- I think those in the points and miles world will enjoy the deals until 2022
Any move back to travels will be gradually moved forward.
One of the biggest issues I see is that certain developing countries and travel destinations in Asia, Africa and South America will be tempered by their individual response and ability to deal with the crisis.
I for one can’t wait to get back to travels but my choice from my travel list will be carefully researched before committing. For example last year I visited South and Central America, Bogota and Mexico City. Certainly glad I did that trip then and not now !
Currently watching BBC Race Across the World and enjoying very much but seeing how elections and local problems effect travel I would not want to be there now or in the near future due to Covid 19 crisis issues.
Different countries will come back online at different times dependent on how governments and their people’s have dealt with the crisis.
Interesting times is an understatement and what happens with Airlines, their financial stability, national pride brand issues and government support is worth watching closely.
Lufthansa and German government is an interesting example if what’s involved especially on refund issues and why all of a sudden the German government are wanting to change rules they were part of creating due to minimise financial support required by Lufthansa. Problem is Lufthansa does not want Government as stakeholders !
Not like Germans to want to change the rules !
Perhaps name change from Lufthansa to Luftwaffe is on the cards
Thanks for all the info I am a traveler and usualy at least 3 Times a Year so much looking forward to travel again.thanj you. Leonor.
I’m ready whenever travel is possible again (have trips to Europe booked for August and November although I realize August will likely be cancelled). Not that I think I’m bulletproof but am of the opinion the virus (along with antibodies and other natural immunity which has been shown in some studies) have spread at least 10x beyond the published positive tests and that the estimate of 50-60% of people being exposed (most with no symptoms or very mild ones) is reasonable. Given that the spread will slow down. I’m also not a germaphobe or overly paranoid. I’ve had a great life, have planned well, take care of myself from a health standpoint and take reasonable precautions with hand washing and other suggestions.
Also, I am a retired (62 year old in great health) executive with all the time in the world, lots of discretionary funds and more miles/points than I can likely use. I CAN’T WAIT to take full advantage of all the offers that will be coming to lure people back. I fully understand that will be changes to business travel as you documented, there is a certain percentage of people that will be afraid to travel due to health concerns and, more importantly IMHO, there will be many that can’t afford travel after dealing with the economic impact of the COVID recession but I am lucky enough to not be in any of those categories and am anxious to get out there again as soon as possible.