Travel will begin to pick up in 2021 but the sector is not expected to fully recover before 2025, according to a new study from the global tourism industry research company Phocuswright. This they say is because vaccines will take a significant amount of time to roll out globally. Airline, hotel and tour operators who have lost or furloughed staff will also be slow to get back to 2019 capacity.
Presenting data at the virtual 4th International Hospitality Forum, held by the Hellenic Chamber of Hotels , Peter O’Connor of Phocuswright said that with the release of multiple vaccines, a recovery in travel should begin in 2021 but overall it is expected to be slow and constant.
Mr O’Connor stated “Part of the reason for this is that airlines and other suppliers, including hotels and tour operators, have furloughed aircraft and staff and it is going to take time to get these services back up and running, while consumers appear still relatively resistant to travel. It will take a significant amount of time for a vaccine to roll out to cover the majority of the population, even in Europe. We do not expect a full recovery, to those lofty 2019 levels, before 2025.”
According to Phocuswright data, 2019 was an exceptional year in most European countries, with estimations of the total travel market topping €300 billion. The study estimates that European travel market revenues will realistically only reach €107 billion in 2020, a 60% drop.
With a recovery expected to begin in 2021, the market size is estimated to grow to €168 billion. Mediterranean destinations such as Spain, Italy and Greece are forecast to have higher than average growth rates over that period.
Recovery is forecast to be more rapid in the hotel sector than in many other sectors of travel, driven by demand from domestic and customers in adjacent European markets (intra-European travellers). Two out of three travellers across the USA and most major European countries stress that travel remains an important part of their lifestyle and want to return to it as soon as possible. Already one in four are ready to travel domestically or into adjacent countries, with the figures growing to three out of four within six months and nine out of ten within 12 months.
While many travellers are comfortable with returning to travel within a year, only a small minority are comfortable travelling in the near term. This is primarily driven by uncertainty, over sudden border restrictions, quarantines, regulations, fear of being stranded, cancellation and refund policies. Until those fears are addressed extensively, most travellers are unlikely to stir far from home.
Phocuswright research showed that the announcements about successful developments of vaccines proved to be the key issue in encouraging consumers to return to travel faster.
As people restart to travel, they are much more likely to travel to familiar destinations closer to home. Focusing on European travellers, two out of three have indicated their willingness to travel within Europe by July 2021, led by the British and the Germans.
European travellers have a reluctance to venture towards long haul destination in the short to medium term, as less than half indicated that they would be willing to travel outside of Europe before July 2021.