What will the future look like for travel after the abrupt standstill in early 2020?
NB: This is an article from PWC
With vaccinations on the rise and infections on the decline in the US, a growing number of consumers are eager to get away. Many have the financial wherewithal, having been hunkered down at home for much of the past year, with fewer-than-usual opportunities to spend money.
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Despite this enthusiasm, many travel companies are struggling to visualize—and shape—the future of travel, recognizing that they need to acknowledge newly formed consumer expectations for trips to the mountains, the beach or the boardroom.
To understand the latest shifts in travel expectations, attitudes and behaviors – as well as the sustainability of those shifts – we surveyed more than 1,300 US consumers in April 2021 and compared the results to earlier surveys conducted in April and August of 2020. Most respondents to our latest survey told us they have at least one flight and/or an overnight stay planned for business or leisure within the next 12 months.
1. Pent-up travel demand is bubbling up. Will the bubble burst?
Consumers are on the move again, requiring travel providers to think about how best to balance supply with demand in the wake of nuanced consumer considerations: Despite the propensity for price to dominate travel purchase decisions, consumers also have health and safety concerns.
Higher income households have seen an increase in savings. Combined with increased vaccination rates, this bodes well for travel. In fact, our survey indicates that consumers are willing to spend more money (13%) for nicer accommodations (28%) and for longer periods of time (24%) on future travel. Moreover, with borders starting to open up to vaccinated travelers, more of them are starting to plan international trips: almost 25% are planning trips to Europe or the Caribbean.
Meanwhile, some consumers remain tentative: 24% told us their leisure travel plans won’t match pre-pandemic levels until at least 2023, and 14% plan to spend less on their next vacation than they did before the pandemic.
Cruises are not high on travel lists: 80% said they’re neutral or unlikely to take a cruise in the next 12 months, an increase from both our previous surveys in 2020. Exceptions are 18-to-24-year-old deal-seekers and high-income consumers (household income over $250,000).
Once consumers have satisfied the urge to travel with spring and summer trips, will travel slow down again? Consumers may well base holiday travel decisions on their experiences in the coming months.
“Only 3% of consumers who received stimulus checks spent that money on travel; more than half saved their checks to spend later. Of those, only 15% plan to spend it on travel.“
Key takeaways
To gain market share by appealing to willing travelers, look to eager-to-travel customer segments, as well as how best to target them. Leveraging the right customer tools and insights platforms can help effectively match demand with media spending to optimize ROI.
2. Public health remains paramount
Safety matters to consumers; they underscored that for us. Our survey found that a clear majority—85%—have either already been vaccinated or plan to be. And 70% favor vaccination verification while traveling.
More than half (56%) support policies that would prevent those without proof of vaccination from traveling. Meanwhile, 14% would be upset if asked for proof of vaccination, creating both opportunities and risks for providers to design future travel experiences around health policies.
In response to consumer public health and safety concerns, travel companies have upgraded safety protocols and infused policies with more flexibility. Many of those changes appear likely to remain in place for the foreseeable future.
Public-health concerns linger:
- More than half (56%) believe brand-name hotels are safer than short-term rental properties. Only 13% feel short-term rentals are safer alternatives.
- Almost a third (28%) plan to stay at higher-end properties than they did before the pandemic, associating them with better public health protocols.
- A third of travelers (36%) are willing to spend more to increase the distance between themselves and others on a flight. On average, they would spend 16% more.
85% of consumers are concerned that current vaccines will not be effective against variants; optimism in travel recovery could be fragile.
Brand trust, always a factor in purchasing decisions, took on outsized importance at the beginning of the pandemic when consumers sought the assurance of cleanliness. By the fall of 2020, price replaced brand trust as the #1 factor, with brand trust a close second—but only for consumers who had actually ventured out to travel. For all others, brand trust still held sway. Today, with more consumers vaccinated and case counts down, traditional purchase drivers have surpassed brand trust, and flexibility seems to be increasing in importance.
Key takeaways
Consumers are still emerging from more than a year of pandemic-related anxiety. Provide more options and greater flexibility for travelers (such as offering flights or communal areas exclusive to vaccinated customers) to help accelerate revenue recovery while also offering safe, meaningful experiences.
