• Surveys provide encouragement

A range of surveys have pointed to an encouraging expectation of recovery in travel volumes, over coming months.
But to improve the return, there are also calls for greater coordination and clarity over current travel restrictions.
While many are hailing resurgent leisure travel, research by Accor in Europe suggests business may not be far behind. A survey of corporate travel managers found one third think their business travel programmes will recover within six months. Of those asked, 21% think previous levels of travel will return in less than three months, with just 7% expecting it to take longer than 12 months.
Hoteliers will be pleased to hear that just 15% are considering a review of hotel categories they book, while location remains the key selection criterion (38%) ahead of price (25%).
“Face to face interactions with clients and business partners are vital in many industries and we know there is significant pent up demand from corporates wanting to get their executives back engaging directly with key contacts,” said Jonathan Pettifer, director of corporate sales and TMC partners at Accor UK & Ireland. “To support this process, it is vital the hospitality industry follows through on its commitment to safeguard traveller safety.”
And an informal poll by Reuters of Asia Pacific travel professionals also found travel professionals noting pent-up demand. Jo Sully, regional general manager Asia-Pacific at American Express Global Business Travel in Sydney told the news service she expected travel volumes in 2021 to be around 60-70% of normal volumes. Corporate travel agents are also detecting a move towards them, away from companies booking direct on low-cost carriers, as they seek clarity over travel arrangements, and want to ensure the safety of employees while travelling.
Despite improving travel volumes, there are concerns that confusion is restricting bookings. The World Travel & Tourism Council has called on European authorities to work more closely together, warning that a lack of alignment is putting travellers off.
“It is urgent that governments learn from the past and take quick and effective action to coordinate and harmonise travel rules and border requirements to bring consistency for everyone across Europe,” said Gloria Guevara, WTTC president & CEO. “The lack of coordination among countries has created inconsistencies which means we are failing to rebuild the trust of potential travellers. Anyone travelling from one European country to the next faces a bewildering difference in travel advice, covering masks, testing and contact tracing.”
“Previous crises, including the 2008 financial crash, shows where governments coordinate to align policies, their leadership resulted in a quicker recovery.”
Brushing aside concerns over returning consumers, it appears hotel investors remain in confident mood. A new buyer registration index collated by Christie & Co noted a surge in UK buyer interest, as lockdown restrictions started to ease. Of eight sectors the agent covers, hotels have been one of the biggest upticks in interest. “We are seeing that investors still have a strong appetite for this market,” said Carine Bonnejean, managing director of hotels.
With the medium term outlook less than certain, facing weaker business, international and MICE demand, there could be more opportunities for buyers: “We do not anticipate the market to return to pre-Covid-19 levels until 2022, at the earliest. Unfortunately, over-rented or over-leveraged hotels may not be able to wait that long and we have already seen a few casualties – we do expect to see a pickup in distressed situations towards the later end of 2020/early 2021.”

HA Perspective [by Chris Bown]: With governments and regional authorities playing whack-a-mole over local flare-ups of covid-19 cases, the coming months are set to be trying for anyone seeking an overseas trip – whether a summer holiday, or an important business foray.
As we went to press, worried UK authorities imposed quarantine on Brits returning from Spain, while the Spanish insisted they didn’t really have a fresh problem with an outbreak of the virus. Such issues are going to chip away at any returning desire to travel – and will test the resolve of companies keen to get back to normal.
A call for greater clarity from the WTTC is all very well, but this pandemic will continue to be a localised issue, so broad-brush directives are likely to be of limited use. That said, it’s hard to understand how scientific advice on, say, masks can be interpreted so differently, across a national border line.

Additional comment [by Andrew Sangster]: In the UK, the hospitality sector lost GBP30bn of sales in Q2, according to UKHospitality, based on data from CGA. Kate Nicholls, CEO of UK Hospitality, said: “We are only on the very first steps in a long recovery.”
To put that GBP30bn in context, hospitality generated GBP133.5bn in sales in 2019. The rolling annual value of sales in hospitality has already dipped below GBP100bn and is set to fall further. Q2 2020 had sales of just GBP4.2bn compared to the GBP34.2bn in Q2 2019.
It is certainly true that there is latent demand for travel and hospitality, both business and leisure. But it is foolish to think it will recover quickly to pre-pandemic levels.
Businesses are feeling the pinch and have enjoyed the bounce resulting from reopening but a return to full profitability is going to take several years.

Share →