Thursday Thoughts: Travel Forecast Update

Planning for the future requires information, and our goal is to monitor industry research/data to assist our partners in understanding short and long term COVID-19 ideas and opportunities.

Pictures: @simonrae;@leio

Perspectives on Travel Forecasts

We are - depending on who you ask – in week 11 of the travel and tourism industry shutdown.

According to the U.S. Travel Association and Tourism Economics, weekly spending on travel declined from $19.8 billion the week of March 7 to a low of $2.3 billion the week of April 25, the lowest point for travel spending during the COVID crisis. This decline represents a decrease of 130 percent.

Despite the devastation that has occurred within the travel industry as a result of this precipitous decline, it appears that we are beginning to see tiny green shoots of growth to indicate recovery. In the weeks since April 25, there has been small, but steady growth in tourism spending. As of May 21, weekly tourism spending reached $3.0 billion or an increase of about 30 percent.

We are also seeing U.S. airlines demand exhibiting slight upticks. Last week, airlines announced customers were booking more flight reservations than cancelling them. In addition, airlines are beginning to add additional flights, including making statements about plans for restarting international flights.

So, what is behind this apparent small resurgence of the U.S. traveling public?  MMGY and the U.S. Travel Association have been periodically surveying would-be travelers to try to understand motivations for wanting to travel again. Although the positions of the four primary motivation areas shift slightly over time, the “slowdown of COVID-19 spread” is consistently the most important factor for would-be travelers getting back on the road. According to MMGY, in early May, 58 percent of those surveyed stated this reason for willingness to travel again, followed closely by “CDC reducing risk advisory” and “easing of domestic travel restrictions.” Notably, the least most popular answer was “great travel deals,” with consistently fewer responses at 37 percent. These responses indicate travelers’ feelings about health juxtaposed against taking advantage of discounts.

As more states reopen business, everyone is closely watching the public health reporting from these jurisdictions. Further growth in spending will likely increase if the spread of the COVID virus can continue to exhibit stabilization and decline.

Travel forecast data can assist you in developing your recovery scenarios. Take advantage of resources available in the market to inform your decision making.

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