Analysis for The Americas

The complexity of travel "has dramatically increased" due to the coronavirus pandemic, said Paul Dear, senior director of global supplier strategy and management at travel and expense management software as a service specialist SAP Concur during the latest monthly edition of CAPA Live.

Leisure travel in America will push the US domestic airline industry to a COVID recovery by early 2022, according to a new report from consulting firm Oliver Wyman. A year ago, we would have thought that a full domestic recovery in this timeframe for the US was almost impossible, but the combination of “pent-up demand, economic stimulus, and access to vaccines is making a difference,” says Tom Stalnaker, a partner and global aviation practice leader at Oliver Wyman.

Regular travellers don’t necessarily get pulled in by low-cost –though admittedly they are happy to accept cheaper fares – but it is more about good value. Whether that is through service, convenience or even price, if we seem to get a good return on our investment then we can put a favourable rate on that offer.

The impact of COVID-19 has been considerable and from an economic perspective that is not any more obvious than the annual 2020 figures on travel spending released this month by the US travel Association. The US economy lost nearly USD500 billion in lost travel spending, resulting in USD64 billion in missed federal, state, and local tax revenue since the pandemic hit the country in the beginning of Mar-2020.

There may be strong pent up demand for leisure travel and increasing number of business travellers that want to get back on the move, but we are still a long, long way from seeing levels return to post-Coronavirus pandemic numbers. Travel restrictions, especially in terms of international mobility, continue to inhibit the recovery of travel and tourism, but remain a key weapon in the arsenal of governments working to reduce COVID-19 spread.

“While individual sentiments differ, one thing is clear: there’s a pent-up demand for travel and a clear appreciation for the benefits that it can bring,” says Audrey Hendley, president of American Express Travel about the findings of the latest edition of the American Express Travel: Global Travel Trends Report. The research provides some important insight into consumer sentiment toward travel around one year after the COVID-19 pandemic began.

When we talk about the importance of corporate travel to airlines, Lufthansa is often used as an example of one that relies on business travel. However, Lufthansa Group chief executive Carsten Spohr last week noted that the importance of this market has actually been following a downward trend over the past years.

For many businesses and corporate travellers the idea of being able to enjoy the quality of a traditional chauffeur, with the convenience of riding within minutes of booking certainly is rather compelling. Plans can quickly change and the knowledge that you can secure a trusted, professional and safe ride within moments has lots of advantages, especially at a time that many may still feel uncomfortable travelling while COVID-19 remains a threat.

The World Health Organization (WHO) has warned it is “premature” and “unrealistic” to think that the pandemic might be over by the end of the year even if there is now clear evidence that the recent arrival of vaccines could at least help dramatically reduce hospitalisations and death.

Travelling for business has emerged to be the type of travel people miss the least and as such it will likely mean it will be very different in type and scale in the future. Recent research of over 1,000 American adults by ClearPath Strategies for online accommodation marketplace Airbnb found that the impacts of the coronavirus pandemic has meant traveller mindsets have been altered and business travel is now the lowest of their priorities.