Travel Sector Snapshot: The Americas

In Blog by Ulrike

Every fortnight, the team at HRS will be examining our proprietary booking data to discover more about the changing travel mindset as we navigate the COVID-19 pandemic. What is the state of play now, and what does it mean for travel managers and hoteliers?

With the advent of COVID-19, the travel industry is experiencing unprecedented effects across every aspect of corporate travel. Our insight into the data behind corporate travel gives us a unique perspective into shifting traveler behavior.

Providing week-by-week snapshots of the travel industry, we’ll be providing travel managers and hoteliers with critical information as it comes to light. Based on our exclusive position in the industry, we will offer recommendations and insights for travel managers and hoteliers to encourage bookings and attract business.

This week, we are focusing on the Americas region, and how its travel industry has been specifically impacted.

The global story so far: From 1 January 2020 to now

Since the start of this year, across the globe, we’ve seen over a million cancellation requests and thousands of changed bookings. The world-wide wave of lockdowns and travel bans has caused a ripple effect on our industry. The good news is that this story is changing.

Global cancellations have fallen by the thousands since the start of 2020. And, in great news, for the first time since 24 February, these cancellations make up only 35% of booking statuses. This is the lowest share seen since mid-February.

The most positive indicator of appetite for travel is the number of new bookings: there was an 88% rise in bookings on the week before. New bookings now represent the majority of bookings made (60%), and last week marked the seventh consecutive proportional rise in this type of booking.

This demonstrates that travelers and travel managers are feeling more secure about the prospect of travel. With the increase in safety measures in air travel and more stringent cleaning standards in the hotel industry, the global travel sector might see these increases in new bookings continue as travelers take advantage of more flexible options and the world moves toward the end of lockdown.

Given that regions such as the Baltics and the trans-Tasman area are looking at opening travel between sanctioned countries using a “bubble” approach, international travel within certain areas is sure to increase shortly. Should the latter “bubble” area be a success, there are already plans to open this to other Pacific areas – a good indicator for the strategy’s potential for use elsewhere.

Focus on the Americas

Last week, we saw the fifth consecutive weekly rise in new bookings – a promising threefold increase on the week before.

Of those made, 55% were made for the same day or the following day, more than double the share of the week before (22%). 15% were made only one day before the stay was due to take place. This indicates that shorter-notice booking interest has risen recently.

Additionally, advance booking in the Americas has become more cautious. Only 1% of new bookings were made for stays 42 or more days in advance. Given the 3% drop from the week before, this indicates a wary approach to booking too far in advance.

The above trend indicates that short-term bookings – particularly those made for the same day – are seen as more secure, and that there is still only tentative interest in booking for the as-yet unknown future. To compensate, the travel industry is already introducing more flexible rates and cancellation policies to entice travel managers to make bookings for the more distant future.

Travel Sector Snapshot

What factors could be causing this trend?

With approximately 48,710,000 people deemed essential workers in the United States alone, many travelers will be required to fly for work commitments cross-state and cross-country borders. US airlines are still spending $10 billion per month on running domestic flights, even with fewer than an average of 17 passengers on board.

As individual countries and states within the Americas move towards the end of lockdown, we can expect to see bookings rise. However, with the US coronavirus death toll now approaching 84,000 and continuing isolation procedures in Latin America, many travel managers are unwilling to book until the situation is more certain.

Given recent news that the US travel restrictions for incoming travelers are unlikely to be lifted this year, travel to and from the country may see only a slow rise in the number of bookings from abroad. This is likely the reason why the majority of bookings in the USA have been made by domestic clients, and why there is still only cautious future activity.

Despite the opening of several states with federal support, there are still state-level political battles being waged as to how and when each area emerges from lockdown. Understandably, this means that travel managers are cautious about spending funds on an uncertain future.

That being said, the Americas’ travel sector is still showing strong signs of recovery, with a gradual rise in bookings and reduction in cancellations as seen globally.

What does this mean for travel managers and hoteliers?

For travel managers, this means that bookings are dependent on immediate needs and concerns. As noted in our [recent Global Flash survey] , though travel managers are willing to potentially sign 15 to 18-month agreements and plan ahead, they will prioritize partners that can enact COVID-19 hygiene protocols. Additionally, there will be an increased focus on preferred hotel partners and streamlined supplier numbers.

We recommend travel managers use trusted travel partners and consolidate their suppliers to ensure they are able to fulfil travel needs while maintaining duty of care for their employees.

For hoteliers, the focus should increasingly be on providing accommodation that lives up to COVID-19 hygiene standards as well as offering competitive rates and negotiation opportunities for travel managers. As corporate travel now focuses on immediacy, we recommend offering flexible options and committing to duty of care to provide reassurance for travelers and booking managers alike. We envision that this might mean sensitive rate adjustments, more bundling options and an even greater focus on hygiene standards to encourage interest.

For advice and guidance on corporate travel and hotel partnerships, please get in touch .