The travel industry is facing an unprecedented crisis as the pandemic has led to serious travel restrictions, cancellations, and overall uncertainty that harms the ability of travellers to plan for their future trips. While the damage to the industry is great, many changes are taking place to make the best of the situation and use technology to make travel and booking more responsive and adaptable to the conditions as they develop.
Travel Industry Seeing Sharp Decline in Revenue
The first half of 2020 saw sweeping cancellations and drops in spending for travel due to customers changing their usual travel habits for personal safety. Online travel firm Expedia Group saw their revenue drop 82% year-to-year in Q2 of 2020. A forecast prepared for the U.S. Travel Association predicted a 40% drop in domestic spending from 2019 to 2020, from $972 billion to $583 billion.
International travel has been hit even harder due to border closures and restrictions. The forecast predicted international inbound spending to the US to drop 75%, from $155 billion to $39 billion. Since the recovery process is uneven from country to country, international travel can be impaired from either end, and the tight quarters of commercial air travel make long flights less appealing. The International Air Transport Association predicted a 55% decline in revenue from 2019.
Travel Sites Implementing Changes in Booking
When the crisis began taking shape in March, Expedia, Priceline, Hotels.com, and other travel booking companies were overwhelmed by the number of cancellations and inquiries from customers. Expedia Group’s sites were unable to provide live customer service and switched to virtual agents and self-service options in order to handle the high volume of cancellations.
As the volume went down over time, travel booking apps were able to provide service more effectively, but this may illustrate a trend of automation in the industry, especially as financial losses lead to layoffs. The unexpected need for cancellations and the difficulty in getting them processed will also affect how customers book travel and lodging in the future. Mobile booking apps and sites that let customers filter for flights and hotels that offer free and easy cancellation will see those options in high demand.
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Signs of Recovery in Domestic Travel
Many travel professionals are feeling optimistic about a rebound in the second half of 2020, especially taking changes to the industry into account. A recent survey from MMGY Travel Intelligence found that about 40% of respondents expect to travel during the next six months.
While some kinds of travel and vacation are less viable at the moment, there are alternatives that are growing in popularity. Airbnb, Vrbo, and other services that offer vacation rentals are seeing a rise in interest. People looking to spend time away from areas with high infection rates are renting elsewhere, and travellers can take satisfying vacations if they are able to avoid hotels and commercial travel. National parks and other domestic locations free of crowds are also a popular option.
Another shift that has been observed is an increase in last-minute flights. Bookings within 14 days of the trip to destinations such as Las Vegas, Los Angeles, and Orlando have been the majority of recent U.S. flight bookings seen by Skyscanner. Customers are less willing to book far in advance, but unusually low prices for last-minute flights have caused many to take advantage and make more sudden travel plans.
With the instability and uncertainty of travel plans, convenience in mobile booking apps is a higher priority than ever. Additionally, companies are working toward more comprehensive plans and policies for responding to the pandemic.
Being able to find options with the best cancellation policies is a new priority for travellers, and with lower prices for flights and accommodations, travellers want to be able to compare prices and get alerted to the latest offers. Companies with the most customer-friendly options for booking will have the best chance at restoring confidence in booking travel and accommodations.