The Return of Travel: Is it too little too late?
Travelers are starting to return to the roads and in the the air. Airlines are reporting large increases in seats being sold on flights. But when you go down to zero passengers and zero travelers...any seat sold is a huge increase from month to month. So while the news seems positive, it may be too little too late to save a large portion of the travel industry.
Airlines have been able to stay "in the air" over the past 6 months due to large amounts of bailouts received from the government. But even those bailouts were not enough to save thousands of airline employee jobs. And more airline cuts are expected over the next couple of months.
We are entering an interesting time of the year. While colder temps means we are about to enter the peak season for warmer destinations such as Mexico and the Caribbean, it also means we are exiting the usual peak season for places destinations like Europe, Bermuda, California etc. And this means some of the hoteliers who rely on a summer peak season will not be around for next summer's peak season.
A recent article in the LA Times brought the tourism crisis to the forefront when it said 1 in 4 hotel properties are struggling to pay their mortgages. Luxe properties on Rodeo Driver are already closing their doors. The Hilton Times Square in Manhattan has gone out of business earlier this month. Go-to hotels in places like Curacao are announcing they will be closed at least until Summer 2021 which means they will be missing their entire peak season for tourists. And that means they most likely will not make it out of this tourism crisis.
And no part of the tourism industry is immune. Hertz Rental Car announced bankruptcy a few months ago as their demand for rental cars basically hit zero for the first time ever. Tour operators and even some online booking engines have closed up for good.
Those are the facts as they relate to the effect this virus, and the world's reaction to this virus, has had on the industry we love.
So what does this mean for the travelers of the future? This means fewer options that us travel professionals will be able to offer our clients. There will naturally be less hotel options but we are expecting fewer flights options as well. Flight routes are determined by demand. As demand stays relatively low vs pre-virus demand, airlines will be reluctant to add flights to existing routes until they see consistent full flights to on those routes and a maintained amount of increased demand.
Convention travel is all but gone at this point which means areas of the Country like Orlando are going to see large hotels close their doors which will affect thousands of tourism employees. Disney and Universal are treading water at this point, but even their reduced capacity limits are straining their parent company's bottom line.
Now this is pretty simple economics. Lower supply and low demand will not equal "great deals." The only exception to this is Mexico where we are seeing a larger supply of resorts to choose from along with lower than usual demand. Mexico is the place right now for great options and great pricing. But when it comes to other destinations in the Caribbean that are not yet fully opened up or where resorts are still closed, prices are higher due to low supply.
Commercial flights to places like St Kitts or St Lucia are not reflecting cheaper prices regardless of the virus. The demand is still too low and all of the resorts have yet to open back up in many Caribbean destinations.
So here is what needs to happen and fast. We need people to get back to traveling and get over any remaining fears that are hindering that decision. Airlines have made flying safer than going into a grocery store, as far as a virus is concerned. Resorts are basically cleaner than they ever have been in the past. Not that they weren't clean before, but now every inch is being sanitized and numerous precautions are in place. Mexico is ready for everyone to come back and that is a great place to start when it comes to getting the negative trend reversed.
If resorts and hotels and tour companies are going to survive, we have to get people back on planes and sitting on beach chairs. The tourism industry's survival depends on it right now.
Have you flown recently? Have you been to a hotel and resort in the last few months? Would love to hear your feedback in the comments section.