The travel industry has seen an uptick in demand as we move closer to summer. However, not all travel will be the same, as much of the demand is directly related to the COVID-19 vaccine and reduced CDC and state restrictions. Industry trends have emerged based on individual comfort levels as they apply to different modes of travel. While Memorial Day Weekend has historically been one of the busiest travel times of the year, things will still look different as this summer kicks off.
Below we'll explore some of the factors that have contributed to an increase in travel and how different travel industries are responding to it.
COVID-19 Vaccines and Traveler Comfort
The trends that impact individual willingness to travel this summer can be directly tied to two factors. First is the administration of the COVID-19 vaccine. According to the CDC, approximately 40 percent of the U.S. population was fully vaccinated as of May 28. Second is the CDC encouraging fully vaccinated people to travel within the United States, and the lifting of pandemic restrictions across the country. Both of these factors inform the types of travel people are willing to take. A Deloitte survey indicates 58 percent of travelers are comfortable staying in a hotel and 45 percent are comfortable flying as of May 26.
With this in mind, let's examine some of the impacts these trends have had on specific sectors of the travel industry.
Since the new year, interest and comfort in flying have steadily increased from 29 percent to 45 percent of individuals (Deloitte). The number of people passing through TSA has gone up significantly, from around a hundred thousand people a day in April 2020 to over a million people a day in April 2021. It's still a little less than half that of TSA's April 2019 travel numbers, but reflective of the increasing percentage of people comfortable with flying.
Comfort and the increased number of travelers have affected the way airlines are addressing social distancing and some in-flight operations. For example, Delta Airlines stopped blocking off the middle seat of their flights at the beginning of May. Other airlines did away with the blocked middle seat much earlier, but travelers will still be bound by the federal mask mandate while flying, vaccinated or not. Alcoholic beverages have been stopped or limited by some carriers, and adjustments to beverage and meal services have been made to decrease time with masks off.
Another big difference to consider is domestic versus international travel. The Deloitte study found that 34 percent of individuals plan to fly domestic, while only 19 percent plan to fly internationally this summer. Not all of that difference is due to flying comfort of course. Sure, some of it will come down to uncertainty of changing risks and restrictions abroad, but high costs of traveling internationally and other non-COVID factors are important variables as well.
Road Trips and Renting Cars
Avoiding large crowds and being able to make an experience out of the journey makes road trips ideal for those uncomfortable with flying. However, you might find this more difficult or expensive than expected (Sorry friends and family back home, I know it's hard to drive across the Pacific Ocean.). Some car rental companies sold off parts of their fleets in response to economic challenges created by COVID-19, and Hertz (arguably the first meme stock of the pandemic) filed for Chapter 11 bankruptcy protection last year. The Bureau of Labor Statistics reported a 16.2 percent increase in car and truck rental costs this April, the result of spiking demand and a supply squeeze coming together after a year of rock-bottom travel demands.
However, this doesn't mean road trips are out of the question. Just be prepared to pay a premium or not get your preferred car if you don't have your own to drive. The same goes if you need a rental car after getting off of a plane. Book early to avoid the risk of not having anything available, and be prepared for the higher price tag.
Average gas prices in the U.S. hovered around $2.85 to $2.88 a gallon for March and April, before climbing above $3 earlier this month. If you're coming to California, be prepared to see $4 or even $5 at the pump.
Cruises remain the least likely to see improvement this summer. Unsurprisingly, only 17 percent of Deloitte's survey respondents plan to take a cruise this summer. This, coupled with mandatory test sailing or exceedingly high vaccination rate requirements, means the cruise industry will likely continue to face economic difficulties throughout 2021. Royal Caribbean is the first cruise liner to receive CDC approval to run test sailings with volunteer passengers, which all cruise lines must complete before traveling with paying customers unless they meet a 95% passenger and 98% crew vaccination rate.
The travel industry is slowly recovering from the pandemic standstill of 2020. And although the industry is experiencing growing demand as we get closer to a post-pandemic world, we're nowhere near to what it was before COVID. If you're planning on traveling this summer, stay up-to-date on CDC guidance, restrictions and rules at each of your destinations, and review the U.S. Department of State’s information and travel restrictions before finalizing your trip.
The growing demand for travel will impact the prices of everything from plane tickets to car rentals and hotel stays. Be sure to adhere to local laws and guidance, keep the information above in mind as you plan your summer, and be thoughtful of the health and safety of those around you. Stay safe and be well.
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