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Updates on U.S. Travel Segments

Posted Date:  June 16, 2020

According to Phocuswright‘s latest travel research report- U.S. Travel Market COVID-19 Update, the U.S. travel industry was on a stable growth prior to the pandemic. The industry was steady throughout the last 10 years after falling significantly in 2009 after the Great Recession. Even though annual growth slowed considerably to just 2% in 2019 due to fears of a looming economic slowdown, Americans were still planning their vacations - all the way up to mid-March.

Key developments and outlook by segment:

Airlines

Key Developments: With the number of passengers flying in the U.S. now down about 96% from 2019, airlines obviously need assistance to maintain their fleets, workers and crews so they can fly once restrictions are lifted.

Outlook: Airlines will endorse policies to make travellers feel safe again, as well as outline the new security measures like testing or certification to board flights. Any recovery this year will be for short, domestic flights until international restrictions are lifted, which could take months or longer.

Hotels 

Key Developments: With almost zero occupancy for some properties and bailout funds unpredictable, individual hotels are fighting for their survival. Even though there is relief from the government it won't be enough to cover payroll and debt payments as the industry asks for more.

Outlook: Some postponed meetings might be moved to the fall, hopefully creating a strong fourth quarter for those larger hotels and brands that reopen. There will be strict guest restrictions in place along with certification for cleanliness for the survivors, and should operate with a difference in terms of the amenities and services they provide.

OTAs

Key Developments: OTAs are hugely affected by the coronavirus in several ways. Judging by consumer sentiment and cancellations, many OTAs played catch up on cancellation and refund policies.

Outlook: The way OTAs strived through 9/11 and the 2009 recession, will be more subdued this time. In previous downturns travellers flocked online for shorter, last-minute, discounted, domestic trips. Now, even though OTAs will package their most attractive offerings (including "certified" for safety) to stay relevant, the greatest shift to online has already occurred. Moreover, travellers will prefer to go direct to suppliers for more assurances.

 

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Author: Sathish Kumar .S

Sathish works as Project Manager in Teknokraaft and heads our OTA team

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