Vaccine and Pent-Up Demand Could Drive Potential Comeback for Travel


A new study from Strategic Vision surveyed affluent consumers and travel advisors on their outlook for travel this year.

The results show that luxury travelers are hopeful about their plans and advisors are cautiously optimistic about business returning.

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“Affluent travelers have been constrained by the pandemic, and they’re intent on fulfilling their travel dreams as soon as they’re able,” said Peter J. Bates, president and founder of Strategic Vision. “Our research shows this pent-up demand is generating keen interest in safaris, European vacations and far-flung destinations—if not in the immediate term, then in the near future. At the same time, luxury travelers are being careful and following the science on vaccines, testing and therapeutics.”

The annual Pulse of the Industry Survey includes the viewpoints of executives from the top travel management firms in the United States and, for the first time this year, included high-end consumers to reveal a comprehensive behavioral outlook of the American luxury traveler.

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This year, the survey found that 48 percent of luxury travel consumers said they feel somewhat or very positive about their leisure travel outlook in 2021, while 44 percent said they feel somewhat or very negative.

According to the survey, of those with a positive outlook, 14 percent identified as “very positive” and indicated they would definitely be traveling in 2021, whereas only 4 percent said they felt “very negative” and don’t plan to travel at all.

A majority of consumers are already booking travel. Fifty-three percent said that they had already booked a trip for 2021, and 41 percent indicated that they are likely to do so. Most are planning trips for the second half of the year.

Travel farther out had an overwhelmingly positive outlook. Two-thirds of respondents signaled their intention to book a trip for 2022 or beyond.

“While the results were closely divided, we were pleasantly surprised to see that more consumers felt positive momentum going into 2021. And this was before any vaccines were approved or administered,” said Bates. “It bodes well for a year of recovery that will start slowly but pick up steam in the second half.”

Travel advisors were also upbeat. Ninety-six percent said that their clients were anticipating domestic trips, 63 percent said their clients were planning an international vacation.

Many have made placeholder bookings in hopes that travel will resume, however, of those who have booked a trip, 65 percent are cautiously optimistic that the trip will actually take place, versus 25 percent who are not as confident.

For those with future plans, Strategic Vision research shows that 58 percent of travelers said their 2021 planned trips are do-over vacations.

North America and Europe were the most popular destinations with Florida and Italy the most sought after. Other destinations that are showing increased interest include Mexico, Colorado, Hawaii, France, California, the United Kingdom, Greece, the Caribbean and Japan, which will host the 2020 Olympic Games.

Oia town in Santorini, Greece.
PHOTO: Oia town in Santorini, Greece. (Photo via iStock/Getty Images Plus/Maglara)

For those who have yet to make plans, 50 percent said that they were likely to plan a domestic trip in 2021 that includes a flight.

A majority of travel advisors (53 percent) reported planning long-haul trips, including Africa, Asia, and South America.

“We predict that long-pent-up wanderlust among luxury travelers is making farther-flung locales seem even more appealing than before,” said Bates. “Our research shows a striking amount of interest in African safaris for later this year and beyond. That reflects a desire for unique travel experiences in remote, wide-open locales, where it’s easier to maintain social distancing and limit exposure to the virus.”

For obvious reasons, travel advisors have had a rough year. Almost all (94 percent) said their 2020 revenues were down over the previous year, with the vast majority reporting decreases of 70 percent or worse.

Forty-one percent reported increasing their number of independent contractor (IC) advisors, which suggests that full-time employees were replaced by (or converted to) freelancers.

“As a host agency, we only have ICs, and the demand is growing,” said Vanessa McGovern, co-founder and chief sales officer of Gifted Travel Network. “We are seeing inquiries every day from ‘desk agents’ and former employees from brick-and-mortars expressing interest in hosting with us.”

Bates predicts that the popularity of ICs will only continue to grow.

“The pandemic has made clear that the host agency model—where an agency can expand or reduce the number of IC’s on its team as demand fluctuates—provides the flexibility that travel management firms need to succeed,” said Bates. “For better or worse, this is the way the industry is going.”

The PPP program, despite all of its problems, has helped agencies survive. The research showed that more than 82 percent of firms in the survey took advantage of PPP funds or other programs last year, and 78 percent said they would do so again.

Respondents generally see this year as one of recovery. Seventy-six percent of respondents said that they expect to increase their revenues over 2020. Most do not expect a full recovery until at least 2022. Only 12 percent said they see revenues returning to 2019 levels this year. However, 51 percent see a return in 2022 and 35 percent in 2023 or beyond.

“International travel will take longer to recover, so there will be fewer high margin, ‘big ticket’ trips this year,” said Bates. “In addition, travel has become more complex, so advisors will spend more time managing a booking – which also impacts profitability.”

One of the positive ways the pandemic has impacted the travel advisor community is that travelers are aware of their value more than ever.

“I can’t tell you how many advisors told me about the countless hours they spent rescheduling trips, figuring out quarantine rules, and pleading for refunds. But if the trip ultimately didn’t happen, they didn’t receive their commission,” said Bates. “More work for less pay is not going to cut it in the future. The consulting model, where clients pay travel advisors a set retainer, is only going to become a greater necessity.”





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