Reasons to Be Cheerful | TravelResearchOnline

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Reasons to Be Cheerful

As much as I’m an eternal optimist, I am very much a pragmatist as well. I need to see the spring bulbs poking through the hard winter soil to get excited about warmer weather and longer days. February thaws have never deceived me.

Well, after 12 long and often dreary months, I’m optimistic about the travel industry’s near-term future. I’m seeing a number of proverbial “green shoots” gathering into a warmer, more welcoming, narrative for the return of travel.

If you’ve been following this column since we launched it last September, you know that I love and depend on data to inform my business decisions and advise my consulting clients. But I don’t seek out data to confirm my biases. I’m open to multiple sources, even conflicting research if its good research. And I eschew “cheerleading” surveys from interested parties.

Given all of the data I follow, and the increasing availability of vaccines, I’m here to put myself out on the line that travel advisors, their suppliers and destinations have so much to be cheerful about this week—as we mark 12 months since the World Health Organization designated COVID-19 as a global pandemic (March 11, 2020).

 

 

Turn that Frown Upside Down

The Airlines Reporting Corp (ARC) tracks airline ticket purchases, and I have been plotting that data since about a year ago. The chart embedded in this article shows that since the middle of January 2021, leisure airline ticket purchases through online travel agencies has steadily risen from about 40% of the weekly “year-over-year” comparisons to 60% in early March.

(Because we are now comparing periods with the fall off in travel in 2020, due to the global pandemic, ARC is now benchmarking data against 2019, a more normal year.)

These booking levels are an all-time high since the pandemic began a year ago this week! That’s reason number one to be cheerful.

During that same mid-January 2021 period to now, airline ticket purchases through leisure travel agencies have risen from about 28% in 2019 comparisons, to 37%. Another record. Reason to be cheerful number two!

Chuck Thackston, ARC’s Managing Director, Data Science and Research, agrees with me. “The pent-up demand for travel is now starting to be realized. It’s manifesting itself in actual tickets being sold and we’re seeing it in the numbers,” he told me late last week when we reviewed ARC’s data together.

Even corporate travel is starting to see some incremental gains, as we all stare down that dour groundhog who was scared of his shadow in February. Reason number three.

Thackston credits this strengthening trend to increasing vaccine availability, more travelers demonstrating that they are comfortable in their destinations and a relatively quiet few months about air travel safety.

“The rate of recovery is going to continue to gradually improve,” he said. “I don’t think we’ll see a spike in Q2. But, on the leisure travel side, recovery is going to continue to accelerate.”

Another researcher whom I’m aligned with is Jan Freitag, National Director, Hospitality Analytics at CoStar, and Senior Vice President, Lodging Insights at STR, a leading lodging data firm. Freitag is meticulous with his analysis of lodging data and has never leapt into the “travel is coming back soon” cheerleader mode so often seen in others during this pandemic.

According to STR‘s latest data through Feb. 20, weekly hotel occupancy reached its highest level since late October – 48.1 %. That level is down about 24% from the same time last year. Meanwhile, average daily rate (ADR) hit US$101.57, off 22%

 

Airlines Reporting Corp.

 

Among STR-defined markets, the Florida Keys reached 93.5% occupancy, followed by Fort Lauderdale (80.1%), while Miami saw the highest occupancy (75.8%) among the Top 25 U.S. Markets.

Demand has now hit 17 million rooms the last two weeks in a row, Freitag told me last week. Currently, STR is forecasting that 2021 occupancies will only be 26.1% below where they were in 2019, with room rates just 18% below. STR believes that 2022 occupancy levels will be only 8% below full year 2019.

Like me, Freitag also has noticed how hotels are ramping up their hiring again. “That activity has drastically increased over the last 3-4 weeks, and you have to ask yourself, why is that?” he said. “Individual property owners are seeing forward booking momentum for the summer. They are saying, ‘we can see light at the end of the tunnel,’ and they need to start staffing up now.”

Freitag buoys his confidence based on other data, like American household savings during the pandemic. As Freitag and Oxford Economics noted recently, households have added a cumulative $1.6 trillion as a result of the lockdowns, which inhibited movement and other discretionary spending.

A goodly portion of that savings will be spent on travel as American consumers feel more confident about rewarding themselves with real vacations.

So, how can you take advantage of these green shoots in the near-term? Well, there’s not a lot of rocket science here. The Caribbean and Mexico are leading the way, along with U.S. destinations that have elbow room [read, NOT urban]. But it will require work on your part, if you weren’t already heavily invested in those markets.

As ARC’s data points out, through Q4 2020, airline ticket purchases as a share of overall international bookings were up 62% to the Caribbean, Mexico, and Central America.

“People want to stay closer to home. They want to have a good vacation,” Thackston said. And these destinations fit the bill.

Remaining Obstacles

While my optimism is hitting new heights, we are far from out of the woods. And because we’re humans, we are so eminently capable of screwing this up. First there are the variants that seem to be more transmissible and potentially more deadly. If we immediately attempt a return to life the way it was pre-February 2020, we could set ourselves back clear into 2022.

In the last month, average daily cases nationwide fell more than 50%, according to data from Johns Hopkins University—but then plateaued, and are ticking back up by low single-digit percentage increases.

So please. Wear that mask, physically distance, and support the science.

Second, we need to keep an eye on how the vaccines work and how many people get them. Remember, they don’t prevent transmission. They protect you from getting sick, or worse.

According to a Pew Research Center article published last week, 19% of American adults say they have already received at least one dose of a coronavirus vaccine—and 50% say they definitely or probably will get vaccinated. That 69% of the public, who intends to get a vaccine or already has, is up from the 60% in November who said they planned to get vaccinated.

Meanwhile, the Centers for Disease Control and Prevention is finalizing guidance aimed at clarifying what Americans who have received COVID-19 vaccines should and shouldn’t do. At a recent White House COVID-19 briefing, chief medical adviser, Dr. Anthony Fauci, previewed the guidance by saying that small gatherings among people who are “doubly vaccinated” are low risk—”so low that you would not have to wear a mask, that you could have a good social gathering within the home.”

Could this mean more travel bubbles? Could this lead to more travel confidence? Very possibly. I’m optimistic. How about you?

 


Richard D’Ambrosio is a master storyteller who, for more than 30 years, has helped leading brands like American Express, Virgin Atlantic Airways, the Family Travel Association (FTA), and Thomas Cook Travel tell their stories to their customers, the media, and employees. A professional business coach and content marketing consultant with his own firm, Travel Business Mastermind, Richard most recently has worked with The Travel Institute, Flight Centre USA and a variety of host agencies and tour companies, helping entrepreneurs refine their brands and sharpen their sales and marketing skills. Richard writes regularly about retail travel agencies, social media & marketing, and business management.

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