Here's what post-pandemic travel might look like - CNBC

Here's what post-pandemic travel might look like - CNBC

valentinrussanov | E+ | Getty Images

Many Americans are thinking of travel again.

And who can blame them? After all, it’s been more than a year of seesawing coronavirus infection rates, on-again, off-again lockdown restrictions, and simple quarantine fatigue.

As Covid-19 vaccination efforts gather steam nationwide, tourism suppliers are tracking increased interest, and even business, in vacations departing as early as this spring. Many aspects of the travel experience, however, have changed and may become permanent — for better or worse.

“We’re increasingly seeing people optimistic about traveling, either as soon as this spring or into the summer,” said Jeff Hurst, president of online vacation home rental site Vrbo in Austin, Texas, and marketing co-lead at parent company Expedia Group.

“What’s encouraging is that people are essentially putting their money where their mouth is and booking that trip,” he said.

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A recent Vrbo survey of 8,000-plus people found that 65% of Americans plan on traveling more in 2021 than they did pre-Covid.

A March survey of 535 adults by website The Vacationer found that once the pandemic is “officially” over, a quarter of people plan to travel more, while just over 58% will return to pre-Covid travel habits. The same study found that 67.72% of respondents plan to travel this summer.

Expedia Group’s 2021 Travel Trends Report, conducted in December, found that 46% of people said they’d be more likely to travel when a vaccine became widely available. By Wednesday, nine states will offer all their residents vaccinations, and President Joe Biden wants to make every U.S. adult eligible for vaccination by May 1.

Jon Grutzner, president of Insight Vacations and Luxury Gold — two high-end guided vacation brands owned by Cypress, California-based The Travel Corporation — said that “as the vaccine rollout continues to evolve, we’ve seen a dramatic uptick in our bookings.”

Reservations are now coming in for Q3 and Q4 of this year. “But it’s 2022 that is going to be a record year, I think, for all folks,” Grutzner said.

Air travel is surging, CNBC has reported, and both short- and long-term hotel bookings are beginning to recover, according to Nicholas Ward, president and co-founder of Koddi, a Fort Worth, Texas-based travel booking technology company.

Ward said he sees increased vaccination rates, more travel demand and good travel sentiment data as pointing to “the possibility of a great summer period, even if we don’t fully recover in 2021.”

While demand for traditional hotel accommodations remains down about 13% from last year and 20% vs. 2019, “that’s the least it’s been down for in some time,” he said. “We’re seeing things generally going in the right direction from a travel demand perspective and continuing to improve week on week.”

For all that, industry executives don’t see a return to the pre-pandemic status quo. There’s a new travel normal, they say, for better or worse.

“I don’t think there will be a future year that feels normal in the context of the past,” said Vrbo’s Hurst. “I’m not really not planning that way, and I’m not sure consumers are, either.”

I can tell you that everyone should add travel insurance to every transaction.

James Ferrara

co-founder and president of InteleTravel

James Ferrara, co-founder and president of Delray Beach, Florida-based InteleTravel — a network of some 60,000 home-based travel advisors — agreed.

“We’ll never return to what the industry looked like pre-pandemic, nor should we,” he said. “We have grown through the last year, we’ve learned some stuff — and so have consumers.

Ferrara said some changes, such as continued masking or cruise ships sailing at half capacity, will only be temporary, while others — like enhanced sanitation protocols and relaxed cancellation and rebooking policies from airlines and other travel suppliers — are here to stay. “This looks like a long-term change to me, and I think that’s excellent business for everyone.”

Koddi’s Ward agreed and predicted that the safe and “frictionless” check-in protocols that hotels, resorts and other accommodations instituted during the pandemic represent a sea change, with suppliers focused on upgrading technology such as smartphone apps.

“We’re seeing contactless check-in, mobile check-ins, really pick up quite significantly,” he said. “It’s a net win for consumers and really can for hotels, as well.

“They’re looking to operate — and in many cases have to operate — much more efficiently,” said Ward, noting it will take some time for accommodation staffing levels to rebound, so tech shortcuts are crucial.

Interest in travel advice is up

Igor Emmerich | Cultura | Getty Images

Speaking of staff, Ferrara said the silver lining to the pandemic for travel advisors — or travel agents, as they were once more commonly known — was that it proved their worth to consumers. A profession that has suffered repeated blows, from commission cuts to the rise of online booking engines, since the turn of the century finally got to prove it has the right stuff when Covid hit and vacations were scrubbed en masse.

“Here we are a year later, and we’re seeing some customers still struggle to get their refunds,” said Ferrara. “A professional travel advisor would do all that work for you and often at no cost.”

When he founded InteleTravel in the early 1990s, the credibility of travel advisors “fell somewhere around used car salesmen,” Ferrara said. But “consumers have learned the value of a professional travel advisor, particularly when things don’t go the way they want them to go.”

“In my career, which is over 30 years now, I’ve never seen interest and confidence in travel agents as high as it is now,” he added, noting he has seen surveys showing that two-thirds of prospective travelers plan to use a travel advisor for future trips.

Where are they headed?

Vrbo’s Top 5 Drivable U.S. Destinations for 2021

  1. Broken Bow, Oklahoma
  2. Boone, North Carolina
  3. Naples, Florida
  4. Miramar & Rosemary Beach, Florida
  5. Gatlinburg & Pigeon Forge, Tennessee

Source: The 2021 Vrbo Trend Report

Look for continued interest in domestic travel, beach vacations, vacation home rentals and “bleisure” trips mixing business travel and vacations — all trends that took hold or took off during the pandemic. Another is the road trip.

In a recent survey by Erie Insurance, 51.2% of respondents said they plan on taking at least one road trip in their own vehicle this year, while another 30% would like to but say it depends on the state of the pandemic. Of those who will travel, 55% plan to drive more than 500 miles from home.

Hurst at Vrbo says local, drive-to travel is here to stay. “The wanderlust to explore what’s close by, you know, has in particular for the younger generations potentially durable benefits,” he said. “You’re not going to be in the air as much.

“It is a different type of economically sustainable travel, and that you can invest more in local communities and things you might feel a different type of connectiveness to.”

Grutzner agreed that “travel with a purpose” is in. “We’re getting more questions now about what our company does to give back.” (All 40 The Travel Corporation brands collectively founded TreadRight Foundation, which supports 50 projects worldwide dedicated to sustainable tourism and community and environmental support.)

Grutzner also expects a resurgence of interest in escorted vacations, or group tours, although travelers may now prefer smaller contingents.

“We’re careful and very selective about hotels we stay in, the restaurants where we eat and the places that we go, so that we’re not putting our guests in danger,” he said, adding that Insight’s average tour includes fewer than 24 participants and Luxury Gold’s, under 20. “I do believe this will be more and more something that people will seek out.”

Something they’ll also look for — or be required to have — is travel insurance, especially for medical care outside U.S. borders. Grutzner said 85% of clients now buy insurance, compared with 40% to 45% pre-Covid.

“I can tell you that everyone should add travel insurance to every transaction,” said Ferrara, noting that travel suppliers relaxing change penalties does not mean vacationers don’t have to worry. “You do have to worry about being airlifted somewhere you trust the medical services,” he said. “And those bills — I’ve seen people put through claims for a quarter of a million dollars.”

While today’s travelers will largely be vaccinated and insured, the travel sector itself will end up healthier than it was pre-pandemic, Hurst said.

“We’ll have a new muscle as it relates to … how … we deal with hopefully a much more minor version of this in the future,” he said. “I think we’re all more prepared … so I’m optimistic that future such events are both smaller and less disruptive.”