Normally at this time of year I send you the results of our annual Pulse of the Industry Survey. This year, well, let’s just say that the pulse is a little bit hard to read at the moment. Once the patient stabilizes a bit (sorry to torture the metaphor) and there’s more clarity in the marketplace, we’ll survey our industry peers to understand their feelings about business and where it’s going.
In the meantime, I have been speaking to a number of travel advisors about the current state of affairs and thought it worth sharing a few of the common threads I’m hearing. Not surprisingly, everyone wants to talk about the omicron variant and how travelers (and we) are reacting to it. The general consensus: Travelers are feeling anxious and confused, but suppliers feel fairly confident things will pick up as omicron fades.
Here is how I see the current state of affairs and the trends that are taking shape for 2022:
DESTINATIONS. Many places are suffering, whether they’re on lockdown, have intense quarantine regulations (Hong Kong or India, for example), or are seeing widespread cancellations from travelers afraid of contracting the virus or getting stranded. For the first half of the year at least, many consumers are staying close to home. Kimberly Wilson Wetty of Valerie Wilson Travel says her clients are planning domestic trips for winter and Spring Break. Paul Tumpowsky of Skylark reports strong interest in Mexico and the Caribbean. Don’t expect a resurgence in international visits to Asia or India until 2023.
AIRLINES. The recent spate of cancellations — due to weather, labor shortages, the 5G rollout, and other factors — is beginning to disrupt global traffic and has consumers worried. It plays into their primary concern of getting stranded away from home. Service cutbacks, like Cathay Pacific’s drastic recent cuts, aren’t helping matters (though there are also positive signs, such as Singapore Air’s reinstated service to Newark). We should expect mask mandates to continue for some time, but no one thought U.S. airlines would begin requiring vaccinations anytime soon.
HOTELS. On the groups side of the business, cancellations due to COVID are causing pain. So is having to restrict services due to staff shortages caused by illness and recruitment issues (as I have recently covered).
CRUISE. The cruise lines are “most improved” in how they are handling COVID, says Albert Herrera of Internova Travel Group, who adds that they are under enormous scrutiny, unlike most other sectors. But the U.S. CDC’s recent recommendation to avoid cruise travel — followed shortly thereafter by making its COVID protocols optional — sends a confusing message. The financial difficulties facing Crystal Cruises is eroding confidence in the sector’s stability as well. Nonetheless, cruisers will continue to cruise. Olga Placeres of Preferred Travel of Naples, who was sailing Regent Seven Seas in the Caribbean when we spoke, said that while some clients are unsettled, passengers on her ship were already booking their next sailing.
TOUR OPERATORS. Cancellations are taking their toll, and escorted group tours in particular are struggling, according to Wetty. But operators like Micato Safaris that offer “once-in-a-lifetime” experiences are doing well, says Herrera. Antarctica has proven popular as well. “What was a dream trip has become a reality with many options to choose from,” he says.
TRAVEL ADVISORS. Agents are working flat out to get clients where they want to go but are dealing with multiple changes — from airline cancellations, changing restrictions at destinations, and clients testing positive before departing or returning home. With every booking having an issue, the amount of time spent per booking has easily tripled — not counting the time spent reassuring clients.
So what does all this mean? Here’s what the next six to 12 months are going to be all about:
MESSAGING IS CRITICAL: I have written about this before, however communication in every category is going to be vital. It’s all about reassurance and a positive approach. Placeres sent her agents out and about in November and December so they can tell clients they’ve experienced a destination firsthand, which helps set clients’ minds at rest. Nonetheless, she says agents still have to “sell” the same trip two or three times before they book.
THERE IS STILL PENT-UP DEMAND. This is always hard to measure, but as a trend it is right up there. Most travel advisors are expecting growth to pick back up after Q1 but are remaining cautious in their estimates for the full year. Consumers want to travel, but they have so many questions — including whether and how inflation and supply chain issues should impact their purchasing decisions. All of which brings us right back to MESSAGING.
WE MUST PUSH INNOVATION. The old ways won’t necessarily work anymore, so it’s critical to move forward by discovering and creating new ways to operate our businesses. Hotels providing COVID testing is a great example of that, and I like the one-upmanship of resorts like the Bahamas’ Baha Mar, which will provide guests who test positive a free extended stay or private jet home.
Business models need to adapt as well. I’m thinking particularly of travel agencies, which, again, are spending inordinate amounts of time rescheduling trips and hunting down refunds in case of cancellation. I predict we’ll see a few testing out additional fees for rescheduled or canceled trips.
SUSTAINABILITY IS STILL TOP OF MIND. The environmental and cultural impact of travel will continue to be an important discussion in 2022 and will receive more attention. I salute Google for adding carbon emission scores on its flight search results and suspect more such awareness-raising measures, in the absence of actual solutions.
CONSUMER CONFUSION WILL CONTINUE. In the U.S. the CDC’s mixed messages on coronavirus have been a disaster, frankly, and not just in its travel advice. Both traditional and social media are contributing to the muddle. This trend will be with us all year and links back to points 1 and 2. How do we continue to move forward with clarity?
STAFFING PROBLEMS WILL STICK AROUND. Burnout and mental health concerns, recruitment and retention challenges (the subject of my last letter), and just plain old illness will remain huge issues as we enter the third year of the pandemic, and nearly all sectors — airlines, hotels, advisors, destinations — cruises being the exception — are suffering. Creating a safe and caring environment in the office is essential, as is maintaining morale among a remote workforce.
What about you? Where do you see the business heading this quarter and the rest of the year? And what challenges, trends, and rewards do you expect 2022 to bring? Let’s keep the conversation going!