
The travel and hospitality industry will have a very difficult time surviving without at least moderate return to normal patterns of business travel. Under the worst case, airlines and hotels will return to capacities under 20%, which will not be sustainable for an extended period of time. Given the economic realities and political pressures to get back to “business as usual,” airlines and hotels will need to focus nearly all attention on the “essential business travelers.” The long-term implications of a sustained pandemic on the industry will be catastrophic and depend on government support to keep business travel and accommodations available. Contraction and consolidation within the industry will be common. A prolonged pandemic will force major and sustained shifts in how those who previously traveled for work will continue to do their jobs. The longer the low level of business travel persists, the longer it will take to return.
Mike Bellmont
Senior vice president, U.S. Senior Client Officer, Ipsos
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Brand shakeout is inevitable. The pressure on brands is going to come from at least three sources: customers, hotel owners, and employees. Customers are going to be looking for meaningful and identifiable differences between brands. Those brands that are not able to establish clear and distinct “swim lanes” are going to perish.
Hotel owners are going to be putting brand value under increased scrutiny. Those brands that cannot show a clear and compelling delta between value delivered (top line occupancy, rate and reservations delivered) and value extracted (fees, royalties and other charges) are going to fall out of favor. Employees are going to be returning to brands that they trust and respect. Those brands that abandoned their employees with no heart are going to have the hardest time staffing for increased business. As better brands emerge, I fully expect a few brands to be phased out and/or consolidated.
Chekitan Dev
Professor, School of Hotel Administration, Cornell SC Johnson College of Business
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The economic woes and ongoing battle to control the virus deal a serious blow to travel and hospitality companies. Many private and small hotels go bankrupt, and many hotel chains also struggle to stay viable. Many licensed, private owners of chain-owned hotels can’t keep the lights on. Airlines also struggle. Business travel remains very soft, most companies continue to prohibit all but the most urgent trips both for safety and also to minimize costs during the economic crisis. Add to this the fact that airlines must operate at well below capacity when they do fly in order to maintain social distancing, so they continue to lose money daily. The government must intercede with cash infusions as they did with the auto industry during the Great Recession. Most airlines file for bankruptcy, and there is consolidation within the industry. This makes travel truly an exclusive and very high-end pursuit. The ultra-rich are the only ones able to rise above it all, by flying private, by renting villas, by paying for a level of care and cleanliness that they can afford. We also see the rise of high-end RVs and growth of “glamping” for the ultra-affluent to enjoy discovery and experience, all while keeping to themselves. However, most consumers and the mass-affluent continue to defer travel and stay home or take road trips.
Michael Baer
Senior vice president, team lead, Ipsos Affluent Intelligence
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Even though the demand for certain types of safe travel returns, consumer fear and fierce government regulation prevent widespread tourism. Short-term vacation rental platforms, overrun with ever-changing restrictions, prohibit rentals on their sites, forcing owners to shut down, halting travel, tourism, and the short-term rental economy.
Lauren Hudson
Vice president, team lead, Ipsos design studio; and co-founder, chief brand architect of the Wildwood Collective short-term rental company
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There will be virtually no travel, at least not at a level that creates meaningful room tax collections for communities. No visitor spending will eliminate the infusion of the outside funds needed to help a community grow and thrive. Take away visitors and you eliminate opportunity for many people within the community. The hospitality industry provides a pathway to the workforce for many young people and people from underserved communities.
The industry also provides an outlet for the creativity of chefs, artists, musicians and mixologists. The unique aspects of a community’s culture or cultures is buoyed by visitor interest and visitor spending. The essence of a community will erode, if not disappear, in this scenario.
While destinations with “bucket list” attractions, such as the Statue of Liberty or Mount Rushmore may see a certain number of outside travelers, mid-size and small-size communities that rely upon their “vibe” for visitor attraction will be limited to regional visits from people seeing family and friends.
This will not contribute to overnight stays and corresponding room tax collection. Travel itself may revert to a luxury for the few who can afford to meet the high costs of this new tourism reality. Travel as an egalitarian leisure and learning experience may disappear.
Rob Gard
Director, PR & Communications, Destination Madison
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Want more visions of the future of travel?
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Read more from the mixed coronavirus future