There is latent demand for travel despite the ongoing Covid-19 pandemic, but consumer behaviour is changing and travel companies should employ methods other than asking their customers to find out how to respond to these changes, a study has found.
“Customers are interested in traveling again when restrictions lift, even willing to do so before a vaccine is available at scale. China—which, as of the time of writing, has effectively controlled the spread of the virus—is seeing both the leisure and business travel segments recover domestically,” McKinsey & Company said in a report called “The travel industry upside down: Insights, analysis and actions for travel executives.”
Europe shows encouraging first signs of recovering travel demand, while other geographies, including the United States, have not yet effectively controlled the spread of the virus; even so, there is a considerable increase in searches and advance bookings.
“Travelers are keen to travel but feel restrained. Indeed, due to necessary public-health measures and safety precautions—such as quarantines, closures, and other restrictions—the leisure space may be curbed by the inability to do anything meaningful at a destination,” McKinsey said.
Many business travelers who are ready to fly again may be limited by corporate travel policies and companies’ understandable focus on duty-of-care obligations to employees.
“The working-from-anywhere trend could permanently blur the lines between leisure and business travel. Digital nomads and “bleisure” travel predate COVID-19. However, the pandemic and the rise of remote work seem to accelerate growth of these travel segments,” the report said.
Players across the travel value chain—including destinations, corporate travel managers and hotels —need to think through key implications.
Nonprice factors have become more important to customers. The industry needs to cover other terrain before “demand stimulating” its way out of the crisis and instead restore traveler confidence. The travel industry is only as strong as its weakest link, so customers need to be comfortable with all touchpoints in their journeys.
“Self-reported sentiments may not accurately reflect preferences or behavior, despite being easy to gather, and especially in the depth of a crisis. For this reason, travel companies cannot rely only on stated preferences; they need to improve the way they keep a pulse on travelers’ actions through leading indicators,” McKinsey pointed out.
Roger Frizzell, SVP & Chief Communications Officer at Carnival Corporation & plc, the world’s largest cruise shipping group, agreed with the report’s finding about latent demand. “We believe there is pent-up demand to cruise again, especially among loyal cruisers. We also are implementing new health and safety protocol, in close coordination with health authorities and destinations, as well as outside experts, that are among the most robust of any industry,” he told CruiseBusiness.com.
