Travel is being redefined as health risks are balanced with financial concerns. Now is the time to evaluate how we want travel to return

24 September, 2020

The recent call from International Air Transport Association (IATA to introduce Covid-19 testing before allowing people to travel is the latest in a series of measures all designed to get the industry back on its feet. Being cleared to travel would put many people's mind at ease because despite airlines and airports maintaining tight protocols there are still those that slip through the net and travel while infected meaning dozens are then required to self isolate and potentially suffer the virus themselves.

So much is changing in the way we travel, and quickly. At the start of the pandemic in March, Skyscanner reported seeing a predominance in one way bookings as people made their way back to wherever they wanted to be for lockdown. Six months on and the metasearch engine and travel agency is still seeing one way bookings tracking higher than normal, particularly in Australia, South Korea and Italy.

These findings are included in Skyscanner's recent report 'The New World of Travel' which brings together their global flight search data together with expert opinion. The report reveals that while the travel industry is facing significant immediate challenges, travellers have been fast to adapt, with pent-up demand prevalent across the globe. It also shares how critical it is that the industry, governments and providers consider this crucial moment to redefine how travel should return.

In March, Skyscanner's data showed a dramatic increase in one-way searches as travellers throughout the world rushed to get home before quarantine and lockdown restrictions were enforced (Source: Skyscanner 'The New World of Travel')

Tracking searches has shown that domestic travel continues to dominate, particularly in countries such as South Korea and Japan. International searches meanwhile are well below normal. After plateauing in July there has been an upward trend from August, particularly from Australian and UK travellers. In South Korea and Japan there was an early rise in international searches which then dipped but since August is back on the rise again.

Regionally, the Americas saw searches in August reach 50% for domestic travel, while in Asia domestic and international searches were around 44% each. Europe on the other hand has seen 48% of all searches looking at regional travel.

As to how far in advance of travel searches are taking place, Skyscanner reports that travel for departure within a week peaked in March then declined through to June, but is back on the increase again in all countries with the exception of Australia and Brazil.

Searches for travel departing within a month has increased significantly since March. The report highlights that large search fluctuations versus the global average are visible in some European countries (Germany, Italy, Netherlands and Spain) throughout May, June and July. Searches in Brazil remain low but are now trending upwards.

According to the World Travel & Tourism Council (WTTC), travel and tourism accounts for USD8.9 trillion of the world's GDP and around one in 10 jobs globally. Getting the industry back on its feet is therefore essential. With Covid-19 shutting borders and country quarantines continuing to hamper recovery, countries that traditionally rely on inbound travel and tourism have been suffering. Spain, Italy and Greece have been hit hard, whereas in Asia early stages of recovery are now being seen, particularly in domestic and regional travel as people look to explore regions closer to home.

It's likely that many countries will have to take a different approach in order to welcome visitors. Those that relied on mass tourism may need to reconsider. Town centres, theme parks and attractions won't be able to cater for the same numbers and so revenue will be down. They will need to create a new approach that focuses on delivering high value experiences where fewer people are prepared to pay more. That can only be a good thing when you bring the environment into the equation.

Is there a future for business travel? With the very real prospect of another worldwide economic downturn on the horizon, many companies will strive to keep costs low, leading to a de-prioritisation of corporate travel, believes Skyscanner (Source: Skyscanner 'The New World of Travel')

Skyscanner reports that new travel behaviours are emerging too. "These are re-shaping the travel sector and the economic benefits it provides in real time," it says and its demand data reveals that recovery won't be linear but rather multispeed. "The spread of COVID-19 and its impact was defined by geography and the proximity of countries to one another. This won't be the case for recovery. Our modelling shows 'clusters' of countries with similar infection rates and traveller behaviours," it explains.

Business travel has almost certainly changed for good. The use of technology won't replace the need for business travel totally, but with budgets under strain many companies are going to be looking hard and whether a trip can be justified or whether video conferencing would suffice. For airlines, business passengers may have only made up around 12% of the passengers but they accounted for between 50-75% of the profits.

Skyscanner's chief commercial officer Stuart Middleton believes it will take several years for business travel to return and, when it does, it might look very different. "The economics of air travel are fundamentally changing - airlines that relied on business class for a large proportion of their profits will need to re-think their strategies and cabins will need to be reconfigured," he explains.

"Remote working and private flying are making all the headlines right now, but ultimately innovation - whether in ticketing, pricing or the overall experience - will be key to re-attracting business travellers. In the short term, confidence in health and safety measures will be paramount, but the blurring of lines between business and leisure travel is a key trend I expect to see over the next few years," he add.

As with destinations, airlines need to adapt. Skyscanner suggests that ways in which this could happen include the promotion of bleisure travel, with bolt-ons becoming increasingly popular. New cabin classes are likely to emerge with a premium economy 'plus' option being offered to travellers who are willing to pay more. Who knows they may bring back the glamorous old days of travel which included a cocktail bar, gourmet dining options and loads more space.

While chartering has become popular in recent months, it is considered likely that this will fade as environmental concerns re-emerge forcing a re-evaluation of health risks versus sustainability.

Low cost carriers with their low margins, point-to-point approach and agility will likely drive the recovery, not least as they specialise on domestic, short haul and regional flights, the current markets seeing most demand. They are likely to become more innovative as they look for more ways to entice us back into the air with flexibility being central. Full service carriers are also having to relook at their offers to remain nimble in the face of a stalled recovery. Many have removed change fees, are offering Covid-19 insurance or funding testing.

The Skyscanner report showcases the latest trends from its global flight search data, as well as commentary from industry leaders, to explore some of the most important issues facing the travel sector right now.

Skyscanner concludes by saying: "The pandemic has forced the world to consider like never before how individual actions impact wider society. This can and should lead to a path to not just a sustainable future for travel, but a more conscious one. A future where the impact of travel and tourism is thought of holistically, for both people and planet. Where there's a net benefit for destinations and local communities. And where travellers are educated and empowered to make decisions about where, when and how they travel."

The human race has always strived to look beyond the horizon and never shied away from the challenge of discovery. It will take more than Covid-19 to stop us travelling but the way we travel may well change as we adapt to an evolving world.