Travel in a New Light
Jul 7, 2021
Open up any newspaper, magazine or travel website these days and you will find no shortage of studies showing just how eager business travelers are to get back on the road. There are companies to rebuild, connections to re-bridge and a level of confidence to rediscover – but all that still lies ahead. For now, we find ourselves in a murky transition, knowing the new normal will be different but not quite sure how.
As planes fill up now, including occupying middle seats and serving passengers drinks, and as hotels and resorts are ratcheting up rates to meet rising occupancies, we look at what’s in store for travel in the coming weeks, months and even years.
So far the news has been good. Domestic flights are nearly 77 percent full, on average, according to trade group Airlines for America. Carriers are ramping up flights and routes, and international travel, however tentative, is set to get a big boost from the European Union as borders open up, one by one, mostly to vaccinated travelers.
“Pre-pandemic, the issue was overcrowding at airports that were operating over their planned capacity,” says Michael Taylor, travel intelligence lead at J.D. Power. “Airlines had done a fantastic job maximizing the load on flights, which is key to profitability. No flier likes a packed aircraft, but that’s not the way to operate a financially successful airline,” Taylor explains.
“Despite this, airlines have made great strides purchasing more comfortable aircraft with better in-flight entertainment and connectivity. Even the food has improved. Now, as we emerge from this pandemic, even with lighter loads, the traveling public has the greatest concern of infection onboard an aircraft. The ability to control who comes in and out of one’s personal space is key to controlling concern over infection,” Taylor says. “That’s hard to accomplish on an aircraft.”
However, adjusting to a new normal is something travelers have negotiated in the past, according to Ralph Kaiser, president and CEO, UATP, the airline-owned travel payment network. “We will adapt to the requirements of COVID on travel just as we adapted to taking our shoes off and limiting the size of liquids on board airplanes over the last two decades,” Kaiser says. “We take this for granted now and we will adapt accordingly in the postpandemic world.”
Recovery Around the Corner?
The travel that’s returning in the early stages is made up of leisure consumers who are mostly about visiting friends and family, and getting out for a short vacation while air fares are still tempting. It has not been about business travel, which, for airlines, usually accounts for 12 percent of bookings but 77 percent of the revenues.
“Domestic leisure travel is back and booming,” Kaiser says. “US airlines have already stated that the summer of 2021 will be record-breaking for leisure travel. We are seeing an increase in business travel but it is slow – we think that Q3 and Q4 will be key and expect more rapid growth then – assuming governments adequately coordinate sensible travel solutions.”
In a recent interview with the Wall Street Journal, Delta CEO Ed Bastion bemoaned a $12.4 billion loss for the airline last year – more than any other US carrier. Still, Bastian says he expects to see the steady return of US business travel as domestic businesses start to open. “We’re only right now at 25 percent to 30 percent of where we should be. I think by the end of the year it will be at least twice that. International business is going to probably be another year from now.”
Bastian sounded an optimistic note about the reasons for a return to travel. “A lot of people are interested in getting back and reclaiming their life,” he said. “Just getting back out is cathartic.”
But what just getting back out looks like among corporations is anyone’s guess. According to the latest polls from the Global Business Travel Association, 77 percent of companies surveyed had undergone a range of layoffs. Of employees still on the job, some threequarters say they are ready to travel again. Another 10 percent or so indicated they were not willing, or unsure.
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