Will 2021 Be The Year That Travel Returns To Normal? | #vacation | #seniors | #elderly
The travel industry has weathered many storms in the last few decades, but none as severe as the coronavirus pandemic. While flights were almost entirely grounded in many countries following the 9/11 terrorist attacks and the volcanic eruptions in Iceland, no other crisis has been as far-reaching.
Although travel has partially recovered from the early days of the pandemic, air travel is still at 46% of 2019 rates globally, with as much as an 80% reduction on U.K. flights. If you compare that to 9/11, in 2001, 1.66 billion passengers flew, the year after the attack, figures were back up at 1.63 billion passengers. Both 9/11 and the current situation have a lot in common; one of the main reasons people are not flying now is fear. Again, in both scenarios, airlines and airports have done everything than can to instill passenger confidence.
However, in 2020 safety is only one of many issues facing travelers. Uncertainty has been a significant factor with borders closing with little notice, airlines and travel insurers making refunds difficult, and even foreign travel being made illegal in the U.K. during lockdowns.
So with a vaccine already being rolled out, will 2020 bring a significant travel recovery? One of the most critical issues will be the stance that individual countries and airlines take towards passengers. Countries have broadly taken one of two approaches; almost a total border closure or allowing tourism with testing or low-risk countries. For those countries with open borders, it is expected that a two-tier system to travel may evolve. In fact, some countries have already started this by allowing those who can prove they have had coronavirus being allowed to enter without testing. Both Iceland and Hungary have recently announced that this will be a new option.
Cyprus is the first country to announce that it will allow vaccinated tourists to enter the country without COVID testing from March 2021. One of the main problems will be how proof of vaccination is provided. Governments have talked about vaccine passports, but as yet, no decisions have been made. It is highly likely that those countries that took the border closure route, such as Australia and New Zealand, could demand only tourists with proof of vaccination can enter. Air Asia has predicted that most Asian countries will require proof of vaccination to enter (although it is likely there may be exceptions for returning residents to test and quarantine instead). Numerous anti-vaccine objectors are already citing this as a restriction of human rights and civil liberties. However, yellow fever vaccination has long been a requirement to enter many countries.
Qantas, the Australian airline, has already stated that it expects to require international travelers to be vaccinated to travel on the airline. As the vaccine rollout is likely to take many months, this is an intriguing strategy that no other airline has taken. It is unlikely others will do so, given their precarious financial positions. The recovery of international travel will depend on how quickly vaccines roll out and how quickly countries react to changing their entry rules.
With elderly and vulnerable people being vaccinated first, it will take until mid-2021 until the general population starts to get immunized in most countries. In the meantime, countries may begin to open borders with more robust testing in place. Major US and U.K. airlines have been trialing various testing combinations to prove to governments that the two countries can operate a safe border policy using testing. The USA border has been closed to U.K. and European passengers since March, and at present, there are no firm plans to reopen. This is despite a recent European Centre for Disease report citing, closing borders and testing is pointless between countries that have endemic COVID as it does not lead to an increase in cases.
According to research by Hilton Hotels, domestic tourism has seen a rise in 2020, which is likely to continue. Searches for domestic hotels in key travel weeks of 2021 are remaining high, and 28% of Brits said they were planning a U.K. holiday next year. Even with vaccines, travel is unlikely to ever be quite the same again, particularly in the mix of business travel versus leisure. The growth of video meetings such as Zoom and Microsoft Teams is likely to reduce business travel for the foreseeable future. On the counter side, it has led to many companies allowing employees to work remotely, which probably will continue long after the pandemic. This may not help airlines much but has already generated a new type of long term tourism with Barbados, Dubai, and Thailand encouraging digital nomad travelers.
Airlines once courted business passengers, gearing many of their services around a working day, such as arrivals lounges to get your suit pressed and have a shower before heading to the office after a flight. With the expected boom of leisure travel from pent up demand, airlines will have to adapt to a large proportion of tourists with different requirements to business travelers. In Hilton’s survey, U.K. residents said they were planning to make up for lost time with two vacations planned for 2021. These types of travelers have different spending expectations as well, so low fares will likely persist. Airlines will need to tempt leisure travelers even on what used to be high yield business class routes. London to New York is an excellent example of this as it used to be the most profitable and one of the busiest routes in the world. With London-Dubai now taking over as one of the most frequented flights, prices to New York are now as low as $1349 (£999) in business class in the persistent airline sales.
First class cabins were already being reduced prior to the crisis, but now many routes have lost first class, probably for good. British Airways has always pledged it’s committment to a first class cabin. However, with the accelerated retirement of their Boeing 747s they have lost a signifcant number of First seats. Their newer Airbus 350 aircraft are being delivered without a first class section. 2021 will see a much smaller number of routes with a first class cabin, even when travel does recover. Private jet use rose dramatically in 2020, replacing the need for first class for the most wealthy.
Another facet to airline recovery will be how they balance cost-cutting with customer satisfaction. At the start of the pandemic, most airlines drastically cut their onboard food and drinks service due to safety concerns. As restaurants reopened worldwide, proving it was possible to serve proper meals safely, many airlines returned to an almost full service in their premium cabins, albeit served on a single tray to reduce contact. Some airlines have been much slower to do this, still using COVID as an excuse for boxed meals and plastic cups in international first class. This can be a dangerous game. While business travelers are usually most concerned with airline schedules and the ability to maximize sleep and a comfortable work environment, holidaymakers have very different requirements. Savvy passengers have been researching which airlines are giving a full service onboard before deciding which to fly. After all, no one wants to spend several thousand dollars to sip cheap champagne out of a plastic cup if they can get fine dining on another airline for the same price. By mid-2021, it is expected that airline service will be back to pre-COVID levels, although face masks may be here to stay until the majority of the population are vaccinated.
Customer loyalty is also an area in which airlines are in a no-win situation. All the major airlines initially extended status for their loyalty scheme members. While this may have been seen as a nice gesture by customers, it has also left them free to try other airlines without worrying about losing status. Now airlines face the dilemma of extending further status, which could encourage loyalty and could have the converse negative effect by not encouraging people to travel to make their status or try different companies.
How people booked holidays changed dramatically in 2020 as people had their fingers burnt by having last-minute cancellations due to government restrictions changing. During 2020, 64% of European stays were being made within 14 days of departure, up 18% on 2019. This trend is likely to continue until the situation stabilizes, although, for long haul booking, consumers have been booking far into the future, hoping that borders reopen. Airlines usually only sell tickets and holidays twelve months into the future, but British Airways opened up bookings for holidays for 2022 this year.
2021 will still be a highly challenging year for travel companies, and many may not survive until travel gets to a relatively normal level again. Companies face difficult decisions on continuing saving costs to remain viable without COVID as an excuse but still tempting customers back against the competition. They often describe housing as a buyer’s or seller’s market, but 2021 will be a buyer’s market for travel as COVID recedes and borders open.
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