The whole travel industry is grappling with the ongoing impact of the COVID-19 pandemic. Travel priorities have changed radically for both leisure and business customers—with dramatic consequences for airlines and hospitality businesses.
An end to the pandemic may be on the horizon. But will the travel industry ever look the same again?
Many believe the Summer of 2021 will be a strong boost to recovery. However, business travel—the staple of the global travel industry—is likely to recover much more slowly. To survive the next few years, airlines and hoteliers must adapt quickly to capture the opportunities in this new industry landscape.
The imperatives? To refocus the strategy around leisure travel.
The pandemic fundamentally changed the priorities, values and behavior of travelers—whether by necessity or choice. Unsurprisingly, the emphasis is now on traveling as safely and healthily as possible. But consumers are also much more aware of the environmental and societal impact of their travel choices, building on a trend that predates the pandemic. There are four key areas of change:
Integrated personal wellness
Health and wellbeing are now priorities for travelers. Every business now has to be a wellness business.
Living for local
The pandemic has refocused people’s attention on their local communities. Domestic travel will be a priority for leisure travelers in the short term.
Doing real good
Travelers in the post-COVID era are looking for sustainable experiences that blend their own need for wellness with that of the planet.
Whilst people have been connecting virtually throughout the pandemic, there’s no substitute for seeing loved ones face to face.
What do the next twelve months hold for airlines and hospitality businesses? So much depends on the speed of the global COVID-19 vaccine rollout. Amazing progress is being made in some countries, while others are lagging.
In addition, the profile of demand has changed fundamentally—and in some ways permanently—as companies around the world realize much of their business can be done remotely. The need to travel and stay overnight for a face-to-face meeting will likely be much lower. So the travel market is now, in effect, a leisure market. And that’s a structurally smaller market than airlines and hotel companies have been used to operating in.
This structural shift changes how those companies need to go about attracting, converting and retaining customers. It also means they need to think creatively about what to do with underutilized assets.
The travel business is now a leisure business…and a smaller business.
There’s no doubt the travel industry is going through a seismic shift. Revenues from traditional business models built around business travel have disappeared overnight. Those revenues will not return immediately. Indeed, they may never recover to pre-pandemic levels. The leisure travel industry is the travel industry for the time being.
That’s why it’s essential that airlines and travel companies take action now. The risk of delay is high. But the opportunities for those that can adapt quickly are huge. This is the time to refocus on leisure, not business, and find new growth in the post-pandemic travel industry.