Three important signs why Travel Demand is Recovering
Early demand signals create some room for optimism for the recovery of leisure travel demand, according to Deloitte Insights.
A new article from Deloitte looks at insights into the trajectory of leisure travel in the United States based on findings from Global State of the Consumer Tracker and InsightIQ business intelligence platform.
The number of US consumers concerned about their own health and the health of others is “forming an observable downtrend,” according to Deloitte. “Should reopening activities not alter COVID-19’s downward trajectory, it’s likely that the downward trend will continue—forming a foundation that supports more confidence to travel.”
The percentage of U.S. consumers concerned about making upcoming payments (27%) and delaying large purchases (43%) have yet to show signs of falling.
Travel safety will likely continue to be the more powerful driver of vacation decisions, Deloitte said, and safety concerns around flying and staying in hotels have increased slightly. As of mid-May, nearly a third of U.S. consumers said they would feel safe staying in a hotel—up from roughly 1 in 5 in early-April.
During the same time period, feelings of safety around more everyday activities, such as going to the store, improved from 30% to 42%. These signs of consumers warming up to more everyday activities are a good sign for the leisure travel segment.
Deloitte points to three signs that leisure travel demand has bottomed—a signal the industry may be entering its recovery phase.
The recovery window will vary across different segments of the travel industry. While leisure spending intentions show signs of growth for both hotel and domestic flights, other segments, such as car rental, cruise, and international air travel, have yet to show a material increase just yet, Deloitte said.
1. Consumers with summer travel plans are growing in number: As of mid-May, almost one-third of US consumers (31%) were planning to stay in a hotel for leisure during the summer months—slowly improving from a mid-April low of 24%. While intentions remain relatively low, the direction is positive. Summer travel plans are stronger among 18–34 year olds, hitting 36% for hotel and 34% for domestic air travel in mid-May.
2. Travel spending sees a slight uptick: Hotel, airline, and car rental spending has now sustained four weeks of positive year-over-year growth. In mid-April, when spending was down 80%–90% across travel segments compared to the prior year.
3. Consumers are returning to travel websites: Daily traffic to online travel agency websites and travel meta-search engines is slowly improving. It was down roughly 80% year-over-year in early-April, but somewhat improved in the third week of May, when it was down only 73% year-over-year.
