A brighter outlook? More Americans feel worst has passed, nearly two-thirds believe life will return to something close to normal by next year, but sentiment remains significantly down from early stages of the pandemic

11 September, 2020

As we now enter the northern hemisphere late summer and move into autumn, more Americans were feeling the worst of the Covid-19 impact had passed, according to the latest and last report from international research company BVA BDRC tracking the impact of the coronavirus crisis on the overall sentiment and confidence of domestic and international consumers.

In the Aug-2020 update of its ‘Tracking Consumer Sentiment on the Impact of Covid-19’ report more respondents felt the worst had passed in the US compared to the previous edition in Jul-2020 (22% versus 18%), while less felt there is worse to come (42% versus 52%). A positive sign, but these numbers highlight a continued concern and remain down on the levels seen in late Apr-2020 when almost two thirds believed things would not get any worse (34% then believes the worst had passed and 29% felt things would not change).

The slightly more optimistic viewpoint is also apparent in the numbers of Americans that believe that life will return to something close to normal by next year. Almost two thirds (61%) believe that will be the case, up ten percentage points in a month since Jul-2020’s report, while one in five (20%) remain optimistic that things could improve in the very short-term and return close to normal by the end of this year.

This outlook does not translate directly into Americans willing to engage in a leisure activity outside their homes where sentiment remains stable since Jul-2020, although levels of uncertainty persist for visiting a museum, planning a vacation and booking a flight. This strikes a cautious note for the travel and tourism industries as they develop messaging to rebuild confidence amongst consumers.

To date more than half of Americans are cautious or have been hit hard financially by Covid-19 and in Aug-2020 confidence in both federal and local government was at its lowest level since the surveys launched in Apr-2020.

The numbers of Americans that have been hit hard has risen by a third in Aug-2020 compared with both the Jun-2020 and Jul-2020 editions, but those feeling cautious (the largest grouping) has shrunk a little during that same time period (from 44% down to 39%). Around one in ten consumers remain positive and feel they are actually better off than before the pandemic.

When it comes to travel, Americans’ expectations to plan a domestic break and book hotel accommodation within the next month peaked in Jun-2020 and have gradually subsided through the mid summer. But, expectations for an autumn or end of year domestic break appear to be holding steady for both trip planning and hotel bookings.

For international travel there are more reservations. Among those that want to book a flight or an international break more than two out five (40% and 41%, respectively) remain unsure over the timescale that this will be completed. In the case of booking a flight that is the highest level of any of the eight surveys completed by BVA BDRC. On the whole, the proportion of Americans who plan to book a flight and/or are planning an international break have barely moved since mid-April, illustrating a sustained level of uncertainty for air and non-US travel.

If they have the confidence to book the change in preferred hotel booking channels during the pandemic to OTAs or comparison and review/booking sites continues as many Americans increasingly look for value with their accommodation booking. Direct hotel bookings, while still the main channel are down almost ten percentage points compared to before the arrival of Covid-19. The preference for comparison sites has doubled over the period and levels have risen to a new high in Aug-2020.

Meanwhile, the intent to book a hotel via an OTA is highest among millennials and Generation X, the two age cohorts that have the highest overall travel intent. The ability to compare all the hotels in a location is one of the main motivators for using an OTA.

BVA BDRC has used the findings from the last two editions of its survey to build some profiles based around different consumer segments. From the Covid concerned, via the Covid cautious and pragmatic policy supporters, to those that belief live goes on, these profiles can provide organisations with further insights to guide their marketing focus while navigating the phases of recovery.

Its findings suggest that the biggest group is life goes on – defined as “people aching for lockdown to be lifted” and a segment that is “not worried about the risks associated with Covid-19 and are supportive of lockdown lifting in order to protect the economy and get back to living their lives”. Over two in five people (42%) are positioned in this segment, based on its research, and which comprises the youngest segment of American consumers, with a median age of 41.

There are very clear differences in attitudes and sentiment among these different profiles with the life goes on segment much more open to engaging in activities, booking trips, or staying in hotels in the near short-term. But, interestingly when it comes to booking a flight, it remains low on the list of priorities among all groups – no more than 50% of any segment intend to do this in the next 12 months and at least a third say they are not planning to book a flight regardless of changes in the Covid situation.

Worryingly, for the corporate sector, a majority of consumers across all the segments also say that regardless of developments in the Covid situation, they do not plan to take a business trip in the next 12 months. In the Covid concerned segment that comprises around 17% of the American population that level is at 80%.