As states and countries relax their restrictions on quarantine and social distancing, airlines and hotels will likely start offering generous discounts in order to generate demand and entice travelers back out into the world beyond their front doorstep.
It is already becoming clear that travel segments and behavior are changing as a result of coronavirus and hotels should plan now for a change in the guest profile and where their guests are coming from.
There are many that believe business travel is likely to recover faster than leisure as companies who need to travel frequently take up the option of low airfare to resume critical business that’s been on pause for almost 2 months. A major step towards recovery in this segment is likely to come when larger corporations relax business travel restrictions, and other smaller companies follow suit. It is estimated that 5-10% of business travel may be eliminated permanently due to reduced travel budgets, business closure, unemployment, and the growth of online meetings.
Leisure travel is likely to adapt to the post-coronavirus world in several ways. A survey conducted by LuggageHero, indicated that 58% of Americans are planning to travel between May and September 2020, as long as their destinations aren't in quarantine. That said, a quarter of participants said they will avoid big cities and public transportation.
Some analysts predict that air travel will not return to full strength until at least mid-2021 which means that leisure travelers are more likely to be taking staycations or car trips to surrounding states. This is also likely to impact trip duration, where leisure travel may shorten i.e instead of long 2-week trips to foreign countries, people will be more inclined, at least initially, to take 2-3 day trips.
2020 may bring the re-birth of the road trip and hotels should pay particular attention to their drive markets as the likelihood is this segment is going to be the most likely to celebrate their post-quarantine freedom by taking a short trip within 2-3 hours' drive.
Those that are comfortable travelling further are likely to be a younger demographic, happy to balance the perceived health risk of travel next to low airfares and reduced hotel rates. A Forbes study outlined that initially "Leisure travelers, especially in those in the financial middle and lower classes who are most likely to experience significant financial pain because of the pandemic and resulting near-shut down of economies, simply won’t be able to afford to travel as much. Thus, they will spend less - perhaps even nothing - on leisure travel over the next few years."
For these reasons, along with continued fear around the pandemic, leisure travel may recover at a slower pace and only recover to previous levels once a vaccine is developed.
The best way to manage your segmentation mix is to take a data first approach. Segment towards drive markets and test what works before expanding your reach and media spend. Also try to understand in-bound travel data as an indicator of where guests are arriving from and choose to target those areas first.
For more information about building your COVID-19 Recovery Plan, visit Vizergy's blog or contact us.
