USA spotlight – business travel may have started again for around a quarter of Americans, but the majority of those not back on the road or in the air are still looking beyond six months for its likely resumption

14 September, 2020

The near term outlook on the pandemic among Americans remains largely unchanged albeit research suggests the business travel is a little more active and the recent Labor Day weekend has given a nice helpful boost to travel spending.

Latest findings from Destination Analysts into when corporate travel might catch up to leisure travel found that almost a quarter (24.2%) of American travellers who work for companies in which employees travel for business say that this travel has started again. A positive indication that some level of business travel is returning across the United States.

However, of the three-quarters whose companies are not yet back to business travel, less than 10% have announced a timeline for return – just over 9% expect this could occur before the end of 2020, around a quarter (24.2%) anticipate their company’s business travel to return in Jan-2021, around one in five (19.7%) in the subsequent couple of months, but nearly half expect that it will be after Apr-2021 or later.

In terms of the Labor Day federal holiday weekend, which happens annual adjacent to the first Monday in September, latest analysis by Tourism Economics for the US Travel Association highlights a positive +18% rise in travel spending, a much needed industry fillip following two months of modest growth and highlights that there is a sentiment to travel.

In the week ending 05-Sep-2020, travel spending reached USD15.4 billion – the largest one-week increase since May when lockdown measures began easing. Nevertheless, travel spending remained 30% below last year's levels (a USD6.7 billion loss). But it continues a journey in the right direction – Aug-2020 ended with USD44 billion in travel spending losses, a 14% gain on the USD51.2 billion recorded in Jul-2020 and the best month since the onset of the pandemic

The influence of the public holiday meant that every state enjoyed a double-digit percentage gain in weekly travel spending and the number of states posting weekly losses of less than -40% increased from 28 to 39. Despite the positive effects of the holiday weekend, Puerto Rico, Washington, DC, New York and Hawaii continued experiencing losses exceeding -50%.

Positively, Louisiana experienced a +10% year-over-year increase in travel spending and Mississippi only saw a single-digit percentage decline from the prior year, although these gains are more tied to increased hotel demand related to displacements and evacuations from recent hurricane, notes the Tourism Economics research.

The latest Transportation Security Administration (TSA) updates of passenger screening numbers shows new pandemic peaks. The Friday (the busiest Labor Day travel day) ahead of the holiday weekend, delivered 969,000 screenings, by far the highest number since the start of the pandemic. Air travel over the Labor Day holiday travel period (Thursday-Monday) in 2020 was still -64% lower than the same period in 2019 tits performance was much stronger than the 70% year-on-year declines seen in recent weeks.

Meanwhile on the ground, the daily travel index from Arrivalist, which measures consumer road trips of 50 miles or more in all 50 US states, shows that road travel over Labor Day weekend 2020 (Thursday to Monday) was just -5.1% lower than Labor Day weekend 2019 and by far, the lowest weekly year-on-year decline since the start of the pandemic.

ADARA's Traveler Trends Tracker of travel-related consumer behaviour including hotel volume and flight bookings for both business and leisure travel shows US domestic air and hotel bookings for future travel have been slowly but steadily improving throughout the summer – from a low of -73% year-on-year in early Jul-2020 to -61% year-on-year at the end of Aug-2020 – but remain deep in negative territory.

There are significant regional variations. Domestic bookings to Montana, Wyoming and Idaho have the lowest declines with year-on-year levels of less than -25%, but New York and Hawaii are at the other end of the scale with declines deeper than -75%.

International bookings for future travel to the US is showing some light and has improved slightly through the summer – from a low of -79% to -70% year-on-year at the end of August, albeit they remain significantly lower than domestic bookings.

The regional variations across the United States remain clear to see in the Tourism Economic travel spending analysis for the US Travel Association, but again the Labor Day weekend has influenced the results in a positive manner.

In the latest week’s research losses in the Northeast improved 22% to USD1.8 billion, but that was actually the smallest relative improvement of the four census regions. The Midwest and West saw travel spending losses shrink 30% and 32% to USD1.1 billion and USD2.1 billion, respectively. The South’s travel spending losses abated to USD1.7 billion, a 43% reduction from the prior week. Over the past 27 weeks though, cumulative losses have reached USD75.2 billion for the Northeast, USD57.2 billion for the Midwest, USD123.3 billion for the South, and USD111.5 billion for the West.