Two weeks ago, I asked some questions about your business and the response to COVID-19. The survey was not a deep dive, but more of a general consensus of our readers—just 7 questions. And here are the results.
A total of 160 people responded and 160 answered 6 of the 7 questions—the 7th being an optional free form response. With such a small sample, please treat it as such—a sample. It may not be indicative of your situation, nor is it indicative of the industry as a whole.
Where are you located?
Compared to last year, how are travel bookings summer 2020 and beyond?
- Up Significantly-0%
- Up Slightly-0%
- About the Same-0%
- Down Slightly-6.25%
- Down Significantly-93.75%
What travel bookings or types are “up” for you?
- Air Only-0%
What travel bookings or types are “down” for you?
- Air Only-7.14%
When do you think demand for travel will return to “normal”?
- It’s already here-0%
- 3-6 Months-25%
- 7-12 Months-50%
- 13-18 Months-12.5%
- 19-24 Months-12.5%
- More than 24 Months-0%
How is your business doing right now?
- Preparing to go out of business-0%
- Struggling and unsure if we will make it-12.5%
- Struggling but we will come out of this-68.75%
- OK and looking forward to coming out of this-18.75%
The final question was not a question and it was open for comments, rants, raves, or whatever was on the mind of the reader. Not many filled it out, but some of the comments included:
- The PPP is a band aid and we will need a further loan infusion of capital for surviving third and fourth quarter of 2020
- People are hesitant to cruise. But regular cruisers are ready, willing and able—but not for 3 months.
- Almost 40 years in the industry and I have never experienced a challenge like this.
- Thank you Richard Earls and TRO for what you do for the agency community.
- COVID aside, the markets are so unstable, people are hesitant to spend any money on luxuries.
It’s pretty self-explanatory, but some comments from me (for what they are worth):
COVID did not discriminate. There was not a single response that suggested that it did not negatively impact them. We truly ARE all in this mess together.
As expected, for the near future, the drive market will be strong. More than 50% of the responses showed that drive vacations and inquiries were up. To be expected, no agency said cruises were up. We need to concentrate on what we can sell. Historically, the drive vacation was a loss-leader of sorts. Look for ways to make it profitable and memorable. I work with a local screen printer and have a “rock concert tour shirt” template. I can call him to get one or 100 made and we swap out the name of the tour, the dates, and the cities. I can work it into the price and at $10 I have significant room for a markup. Look for ways to make the drive market work for you.
As to when the demand comes back, while I have been called the eternal optimist, personally I am leaning towards the 13-18 months or later on this one. There is so much unknown still. And the critical aspect of a return to normalcy will be a vaccine. Right now, hotels, cruise lines, airlines, and every aspect of the travel industry is trying to figure out how to keep guests safe. All of this will come at a cost, while still trying to remain viable. Only the naïve would believe the travel companies are going to eat that cost—it is going to be passed along to the consumer. Will Southwest still offer that $250 RT fare to MCO when they are flying a plane at 2/3 occupancy and needing to sanitize it after each flight? This is so far reaching if you think about it. The airport shuttle to the long-term parking lot needs to be reconfigured. Bars and restaurants in the airports. Travel is based on cramming as many people as possible in the smallest space possible. Unfortunate but true—and I think we have a pretty long road ahead of us.
I am encouraged by the optimism of our readers. Nearly 90% believe that they are coming out of this alive. I was fearful of these answers, but now I am encouraged. According to IBISWorld there are just over 60,000 agencies in the US. If 12.5% don’t make it, we are at 52,500. Not good, but not as bad as some have predicted. Interestingly, they have been showing an increase in agencies over the past decade. This might bring us back to 2016 levels.
And finally, on the comments…
Regular cruisers are ready to go. Not surprising there. And I can likely take a guess at what lines they regularly cruise on as well. Anecdotally I have spoken to dozens of friends and neighbors about cruising and they are all a big “nope” for the near future. I think this is a case of “how cheap does a crappy vacation need to be to make it worthwhile?” Just an opinion from me.
On the PPP, I cannot agree more. It was an ill-conceived plan from the start; but I cannot fault the SBA on it as it was unprecedented and funds needed to be distributed. There have been changes (thankfully) which will make it easier to apply for the forgiveness than the initial 8 weeks. And I do think we will see other choices for grants and low interest loans as we move from containment of COVID-19 to recovery.
My home state is beginning to open up and we all have our fingers crossed that the virus is in check and people are policing themselves; but then we are dealing with racial unrest across the country as well that has a lot of people in tight spaces. Toss in the scepter of a second wave of Coronavirus in the fall; let’s just say I am keeping my fingers crossed.
But one thing I know, this industry (more than others) is used to curve balls. This is a big one. But, as we do with all curve balls, we react and adapt and come out ahead.
If you’d like to take the survey, I will keep it open and if the numbers change significantly, I will do another look.
Now go wash your hands!