If things go well, we might be at the threshold of a new age of travel.
NB: This is an article from McKinsey & Co.
Although COVID-19 variants may affect conditions, it seems only a matter of time before travelers in some parts of the world hit the road and take to the skies again, thanks to rising vaccination rates and manageable caseloads. Some countries have begun gingerly relaxing travel restrictions and reopening borders.
As the worst effects of the COVID-19 pandemic ebb, most indicators point to travel coming back—with a vengeance—as people look to reconnect, explore new destinations, or revisit reliable favorites. Many just want to get away from the confines of their homes.
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A McKinsey survey reveals traveling to be the second-most-desired activity among respondents (in first place: dining out). In the United States, air travel has hit two million daily passengers, closer to the prepandemic level of around 2.5 million than to the low of around 90,000, in April 2020. Hotel reservations and rental-car bookings are surging.
All these trends should taste sweet for the industry, but ill-prepared companies may find themselves facing the wrath of a cohort of leisure-focused vacationers who might already be struggling to keep up with new travel protocols. If the industry doesn’t work to increase capacity now, the ecosystem may buckle under the pressure, forcing travelers to endure long wait times and inflated prices.
This article projects two broad trajectories of how travel will likely bounce back, comparing countries that have near-zero caseloads with those that have more, but manageable, caseloads and higher vaccination rates. In both scenarios, travel companies that don’t prepare themselves for the forthcoming influx of travelers risk missing out on a valuable opportunity to recoup losses incurred during the height of the pandemic. On the flip side, we believe that by focusing on four key areas—building capacity, investing in digital innovation, revisiting commercial approaches, and learning from critical moments—travel companies can seize value as they exceed the needs and demands of their customers.
The tale of two travel recovery paths
Wherever in the world you look, you’ll see people itching to travel. Most high-income earners have not lost their jobs. In the United States, the savings rate among this demographic is 10 to 20 percent higher now than before the pandemic, and such people are eager to spend their money on travel. Leisure trips are expected to lead the rebound, with corporate travel trailing behind.
A recent survey of 4,700 respondents from 11 countries around the world, conducted by the International Air Transport Association (IATA), revealed that 57 percent of them expected to be traveling within two months of the pandemic’s containment, and 72 percent will do so as soon as they can meet friends and family. In our China travel survey, we see more and more respondents yearning for leisure trips further afield; 41 percent say they want their next trip to be outside China, the highest level we’ve seen, despite borders remaining sealed.
Yet it’s worth noting that despite the near-universal desire to travel, countries will likely manage their plans to reopen differently. Two main factors come into play here: current COVID-19 caseloads and vaccination rates. People living in countries with limited access to vaccines and uncontainable levels of cases—such as a number of countries in Africa and Southeast Asia—will continue to be bound by tight travel restrictions for some time to come.