Optimistic news of a COVID-19 vaccine becoming available before the end of the year has the hospitality industry sighing with relief as we head into the holiday season. The UK became the first Western nation to grant emergency-use authorization for a COVID-19 vaccine, clearing a shot developed by Pfizer Inc. of the U.S. and BioNTech SE of Germany. Inoculations began for UK citizens in early December in limited numbers, and will likely be followed by other western nations shortly. The FDA issued the first emergency-use authorization in the U.S. on December 11 and the first vaccine shot was administered December 14. Medical experts believe this is the first real step in the direction to control the spread of COVID-19, and travel experts have already seen consumers react accordingly with sizable spikes for 2021 travel.
The following is a summary of trends and industry shifts that MMGY NJF has compiled from media feedback, widespread coverage and webinars:
- Experience Now, Publish Later – As vaccine news has sparked immediate bookings from consumers, the publishing world has also made critical shifts to editorial processes. As a result of several conversations from key travel media players, editors will begin shifting away from the scant and hamstrung media visits of the past nine months. We are already seeing signs of them rapidly scheduling domestic and international travel. The caveat being that destination coverage of a destination could be held for longer periods of time before publication, ensuring that any additional shifts in travel restrictions do not undermine the efficacy of a story’s content.
TRAVEL TRENDS IMPACTING THE INDUSTRY:
- News of Vaccine Boosts Bookings to Big Cities – With publicly available vaccines around the corner in the U.S., Business Insider reported significant consumer confidence for 2021 travel, pointing to Skyscanner’s November spikes in both searches and bookings on the days that news of a potential coronavirus vaccine hit. On November 16, when news of the Moderna vaccine hit, searches for economy class round-trips from the U.S. rose by 63% compared to the previous day, and bookings spiked 17%. However, the top U.S. cities Americans were searching for came as a surprise, as most of the list consisted of large cities, with New York, Los Angeles and Miami rounding out the top three.
- Future of Short-Term Rentals – The hospitality industry unanimously agrees that short-term rentals led the tentative recovery in the spring and into the summer in many parts of the world. But a key question will be how will they respond when hotels and cities come back in earnest – and with vaccines available, they will need to maintain momentum in order to sustain a competitive edge in a notoriously crowded market. The much-anticipated IPO of Airbnb happened this week which marks a significant milestone for the future of short-term rentals.On the day Airbnb debuted on Wall Street, at one point it reached a market cap worth more than Marriott, Hilton, IHG, Accor, Hyatt, Choice and Wyndham combined.
- Brexit Adds Salt in the COVID-19 Wound for the UK – Just a couple of weeks shy of the final Brexit, the UK and the U.S. signed a new bilateral open skies agreement to ensure flights between the two countries would continue as of January 1, 2021. But uncertainty is exactly what European destinations are dealing with in the absence of clear guidance on how tourism will operate seamlessly between the UK and the European Union starting in the new year.
- Americans On Board to Get Aboard Cruises – After what will have been a shutdown of more than nine months, the cruise industry is preparing to sail again in the U.S., and all major cruise companies have said bookings are optimistically strong for the second half of 2021. Cruise Lines International Association (CLIA), the leading trade organization for the industry, found that 73% of cruisers say they are “likely to cruise” in the next few years, and 50% say they will cruise within the year. These findings were gathered even before news broke about vaccine availability in December, allowing a battered cruise industry a much-needed jolt in optimism. A long journey remains for cruise lines to be compatible with CDC guidelines, with one component being mock voyages with volunteers – a process akin to test sailings when cruise lines launch new ships.
- Window of Opportunity – Online travel agencies (OTAs) have dominated the online travel market space in the last few decades, but COVID-19 has brought increased opportunity for suppliers to boost their own market appeal given their inherent ability to provide quick refunds directly to consumers. The process of refunding a customer from an OTA is considerably more complicated, leading hotels and airlines to have an advantage in servicing customers in 2020 and beyond. Even with a vaccine, consumers will remain more inclined to book with flexibility in mind, extending the window of opportunity for travel providers to meet this demand. GlobalData
- Hybrid Events are Possible… Closed borders and country lockdowns have made international travel difficult, and restrictions on large gatherings have created barriers for the Meeting, Incentives, Conventions and Exhibitions (MICE) industry that relies on in-person events to share knowledge and build networks. Singapore has emerged as a leader in what the future might hold for the meetings industry where government support for hybrid events, actionable roadmaps and safety measures blaze a trail for the industry’s new normal.
- …But the Future of Business Travel Looks Bleak – Despite Singapore leading the charge on the future of hybrid virtual events, The Wall Street Journal’s Middle Seat columnist Scott McCartney reported that the COVID-19 pandemic could cut business travel by 36% – permanently, sending shockwaves through the industry. By McCartney’s calculation, between 19% and 36% of all business trips could disappear, given efficiencies developed during the lockdown. Estimations by airlines remain in flux, with CEOs of American, United and Delta all saying business travel will come roaring back in full, though it may take a few years. But, observers like Bill Gates recently suggested half of all business travel will never return.
- Train Commuting in the Era of Remote Work – Traditional rail tickets for commuters are generally structured around the average workday, with peak and off-peak prices shaped around rush hour and weekly/monthly tickets. But with many commuters planning to continue working from home in some capacity into 2021, railway experts in the UK are reviewing fares and ticket changes to reflect new commuter patterns that will ultimately be a welcomed relief for commuters’ wallets. Americans will remain a step behind in this category, as mass transit faces huge service cuts across the U.S., with The New York Times deeming the U.S. railway industry in “existential peril.”