It has been interesting to review the MMGY Intelligence travel sentiment surveys over the last 20 weeks. The steady and marked improvement of travel intent that built into late June and then abruptly reversed weeks later has been clearly tied to infections and the media narrative. Even commercial demand showed signs of life before turning down in August. The abject lesson: today’s traveler quickly pivots and evolves. Perceptions of travel safety have been fueled for years by social media and 24/7 news, but it is significantly more pronounced with Covid-19. The industry’s hopeful climb back into early Summer demand materialized as fast as did the ensuing decline. As Natalie Compton wrote in the Washington Post, “Our realities shifted slowly at first, and before we knew it, the coronavirus took over completely.”
So what does this mean for the rest of 2020?
The good news is that consumers are proving to be highly adaptive and plan to take leisure trips in a more understated way, without the usual fanfare of social posts and elaborate planning. We expect more travel to resume as the landscape improves into Fall, and contrary to what some have suggested, we think it materializes quickly. As travel and hospitality suppliers are becoming more confident and clear in communicating what is possible during crisis, travelers indicate that safety measures make a difference in easing booking decisions.
Nothing has changed about pent-up demand for leisure travel, mostly by car and in shorter distances. Even in the midst of the current consumer “fear phase,” some destination communities have remained busy with a level of consumption that travelers appear to be hiding from social channels for the fear of “travel shaming.” And as we see infection rates decline, we expect a commensurate and dramatic rise in travel for the ensuing months, including by air and across an expanding map of destinations.
Specifically our data tells us that leisure trips planned for late July and August were shifted to out-months, thanks to loosened cancellation policies and brands that have remained in the marketplace. We also know that many destinations historically relying on group business will seek to replace that base revenue with a new source of Fall leisure travel.
It is our firm belief that these conditions will permit much stronger travel demand in the Fall and early Winter for brands willing to conquest against a lost Summer season. As traditional patterns give way to adaptive traveler realities, we are expecting “The Stretch Season” as a resulting market truth. We think this next phase of travel expansion will not only be led by short-haul car travel but will be enhanced with strengthening air and longer-haul itineraries.
Consider some important conditions that could drive historic demand, and not just for beach and mountain communities as was the case in early recovery.
- In MMGY’s August data, 52% of travelers are more likely to travel in Fall ’20 vs ’19.
- More than 30% of travelers have postponed travel plans (vs canceled) for this year.
- 16% of travelers in MMGY DKSA data will travel in the midst of a travel advisory.
- Many traditional events such as weddings, graduations and family events have been canceled, and affected consumers have shown interest to supplement this with travel.
- Millions of children will not return to school, with families therefore looking to create out-of-home experiences.
- According to labor statistics from a Harris Poll, as many as 51% of Americans will be working from home, creating a combination of discretionary time and additional home fatigue.
- In this bifurcated economic recovery, households negatively impacted will seek travel deals traditionally available in the Fall, while wealthy households who have actually improved their standing will pay for more enhanced travel experiences.
All of this creates an opportunity for travel brands to drive new revenue through the end of 2020. Using smart value inducements, brand safety communication and marketing tools that create strong call-to-action, demand can be converted. To support this market condition, MMGY Global brands are launching a “Stretch Season” campaign bringing together companies to tell a collaborative story. A chance to communicate the joys of responsible travel that buoys the industry and helps to drive economic recovery.