40% of People Expect To Travel Less After the Coronavirus Crisis than Before

Capitalizing on a New Travel Industry

Despite a projected decrease in air travel, 74% of Americans prioritize experiences over physical products and will be searching for safe experiences and travel options. This will lead to a new travel industry with more localized travel that can be reached by car, as well as “staycations” where consumers spend on accommodations and experiences near their hometown. This may require travel companies to change their marketing strategy such as cutting international advertising spend. Tour operators have already altered their products by offering virtual experiences or products that appeal to locals. Vacation rentals will need to establish strict cleaning protocols that hotels are currently adopting to ensure consumer safety to use in their marketing strategies. Airbnb is rolling out new cleaning protocols in May where hosts can either receive an enhanced cleaning certification or opt into a 72 hour booking buffer between guests. 

For the 60% of respondents that plan on air traveling the same amount or more once the quarantine is over, the way in which they air travel will undoubtedly be different. There will most likely be some sort of passenger health test prior to boarding such as temperature testing. Dubai-based airlines Emirates has taken more extreme measures by carrying out COVID-19 blood tests on passengers prior to boarding. Some airline carriers, including American AIrlines, are reassigning seats to customers so they can maintain social distancing and avoid middle seats. Other prototypes of seating designs have been created that include face shields or alternate seating directions to ensure isolation of passengers seated next to each other. 

All of this creates an opportunity for the travel tech industry and operators that can capitalize on these changing trends. Loyalty programs in particular will become even more important to build consumer allegiance to certain brands. Point-based loyalty programs have become status quo and many times do not offer a strong return to the consumer. More service level perks are needed to ensure consumer loyalty beyond a one time purchase. For instance, airlines such as Delta offer priority boarding and overhead capacity space for a flat annual fee. Many times it is not the mode of transportation or lodging, but the experiences that make a trip. Offering unique booking experiences as part of a loyalty program can provide differentiation. With 36% of respondents decreasing their discretionary spending once the quarantine is over, offering discounts or promotional bundles that include activities may also help to attract consumers. 

While the travel industry has been one of the hardest-hit verticals during the pandemic, better days are ahead when the economy reopens, and consumers gain comfort being in public places again. Until then, the current slow down should allow operators in the industry to make the necessary adjustments and system upgrades to adapt to this changing landscape brought on by COVID-19. 

Sources:

1. Economic World Forum
2. IATA
3. Bureau of Transportation Statistics 
4. The New York Times
5. Worldometer
6. OAG and TSA
7. CBRE
8. STR Global
9. Arival