Travel Industry During and After Corona Pandemic

The pandemic is affecting the industry as a whole, but each sector has its specifics. We have summarized some relevant insights from each of them.

The U.S. travel and tourism industry could lose at least $24 billion in foreign spending this year because of the rapidly spreading coronavirus, according to data produced by Tourism Economics and first seen by CNBC.

The outbreak is inevitably having an enormous impact on the travel industry, ranging from hotel and cruise ship quarantines to airlines halting flights in some regions.

Travel Industry During the Pandemic 

The pandemic is affecting the industry as a whole, but each sector has its specifics. We have summarized some relevant insights from each of them.

How The COVID-19 Outbreak is Affecting Aviation: 

  • According to IATA, annual loss is expected to be $113-252 billion for the airline industry. 
  • What that means to the industry’s annual revenue projection is that it went from a 4% increase to 13-30% YoY decrease (vs $838 billion in 2019) 
  • Total profit in 2019 was $26 billion or 3.1% of total revenue, which suggests even IATA’s “best-case scenario” for 2020 would not be bearable by airlines.

How The COVID-19 Outbreak is Affecting Tours and Activities:

  • According to Arival, the whole sector is valued at $254 billion for 2019, consisting of 1 million operators. 
  • 86% of operators generated less than $250K in sales in 2019, which implies small businesses could be hit the hardest. 
  • Based on last week’s survey, 28% of operators are at risk of closing business within the next 3 months or 46% within 6 months. 
  • Average YoY decline in bookings is about 52%, partially due to a 37% cancellation of total 2020 bookings.

How The COVID-19 Outbreak is Affecting Hotels:

  • Right now, none of the global brands are ready to give guidance. Group is the only OTA that has issued some sort of guidance. They expect lodging businesses to decline 60-65% for Q1 YoY. 
  • According to STR, the US occupancy level is still held above 50% for the second week in March but is expected to follow the trend line set by China and Italy. 
  • In other words, US occupancy could drop sharply below 10% before bouncing back and is tracing about 8 weeks behind China and Italy. China’s occupancy grew from 9% to 18% during the first two weeks in March.
  • In terms of on-the-books, during the same period, Trip.Com Group reported a 20x increase in prepaid hotel bookings.

But with the storm clouds come a silver lining. Without the steady stream of cruise ships (some of the worst polluters in the world), the canals of Venice have become clear for the first time in centuries; pollution around the world has dropped dramatically and cities that had been trampled by overtourism are recovering.

And travel experts say that when the world recovers from the rampant spread of COVID-19, the industry will come back stronger than ever.

Covid-19: Global Survey Insights 

As the Covid-19 pandemic unfolds traffic, bookingtrends, searches and site data are extremely helpfulin telling us current behaviors of travelers. Wewanted to take these findings a step further, andhear from users globally how they were feeling. Overthe last two weeks Tripadvisor worked with Qualtricson a survey in five key markets to understandsentiment. The key findings:

  • More travelers are rescheduling than cancelingtrips entirely
  • Respondents feel comfortable traveling soonafter Covid-19
  • Travelers are extremely excited about their nexttrip
  • Respondents say they are more likely to take roadtrips and beach vacations after Covid-19

Status of Current Trips

Image: TripAdviser
Image: TripAdviser
Image: TripAdviser

The current travelver mindset

Image: TripAdviser
Image: TripAdviser
Image: TripAdviser
Image: TripAdviser

Future travel planning changes 

Image: TripAdviser

As we mentioned, the universal grounding of global travelers has already had a positive impact on a planet wracked by the effects of climate change, and when borders do reopen, a more mindful approach to travel will likely be top of mind: fewer trips, longer trips, more meaningful trips. As we emerge from months of social distancing, we might be craving human connections — cooking in the countryside, or meeting craftsmen in rural areas, or a family road trip to Niagara Falls. People call it the great reset and It’s undoubtedly creating awareness for a better kind of travel.

Source: New York Post, Plug and Play Tech Center, TripAdviser

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