Teletext Holidays chairman Steve Endacott looks at how Covid-19 might shape holiday purchases in the next year
The biggest impact of Covid-19 will be the post-lockdown recession we are about to enter, with large-scale job losses and economic uncertainty set to hit demand hard.
Most airlines have already cut capacity by 30% next year, but with fuel prices low and aircraft on the ground, capacity could be added back.
Holiday demand will vary across age groups, with over-70s unlikely to travel anywhere in the next year and the 50-70 bracket more cautious, which will adversely impact the cruise and coach touring sectors most.
Cruise lines may be able to mothball some older ships, but any recently launched and heavily financed ships will need to operate, forcing a likely excess of supply over demand and amazing value for money, as cruise lines seek to entice younger clients on innovative new itineraries. Brits tend to bounce back fast when there is a bargain to be had!
Mass-market beach holidays will also change, as the cost of delivering all-inclusive holidays in a socially distanced environment soars. Most Mediterranean all-inclusive hotels rely on buffet food delivery and low staff-to-guest ratios; however, these costings go out the window when social distancing rules require large increases in staffing to deliver ‘table service’ dining.
A number of all-inclusive hotels will not open their doors this summer, even though holidaymakers are now returning, as the cost of delivering the board basis sold exceeds the price it was sold at. Normality may return for summer 2021 but hotels may price cautiously until they know, forcing all-inclusive prices up.
Post-Covid-19 customer demand will, naturally, move towards accommodation offering more isolation, boosting self-catering, villas and Airbnb-style private accommodation sales as customers steer away from crowded hotel pools and buffet dining.
Destination choice will be impacted massively by further Covid-19 flare-ups and we are already seeing destinations and hotels moving to reassure customers with free medical insurance included as part of their holiday offering. Alternatively, destinations like Dubai are demanding evidence of Covid-19 medical insurance or personal guarantees before allowing tourists in.
The Covid-19 lockdown may boost activity and adventure holidays. Let’s face it, you’re either fatter or fitter after lockdown. Many people will have got used to taking long walks or bike rides during lockdown and are likely to want more-active holidays to replicate the feelgood factor this has given them.
Domestic and self-drive holidays are set to boom as cars provide sanitised travel for family bubbles. Having free access to the NHS and less distance to travel in the case of emergency will also be considerations.
How quickly parents are willing to take their children overseas again will be the key issue in January sales. If you’re transferring a summer 2020 booking, you are likely to rebook early, but how many will commit early for a summer 2021 holiday with Covid-19 uncertainty still rife? The hangover of summer 2020 holidays being rebooked with no new cash or commission is going to hit profits and demand as most people are unlikely to book two holidays for summer 2021.
Travelling through airports will take longer while compulsory luggage check-in remains in place, and I’d expect airlines to increase the cost of carrying luggage and airports to charge more for “fast-pass security clearance” as all seek to make more from fewer customers travelling.
Booking routes may also be impacted by Covid-19, with many retailers having lost loyal customers because of the refund logjam caused by airlines. A lot of brand damage has been done, although Travel Counsellors and On the Beach seem to have fared better than most.
Booking channels with high human interaction may do well as customers seek reassurance about what happens if Covid-19 flares up again and causes further holiday disruption. However, OTAs’ low deposits and offers of final payment two weeks before departure may counterbalance this.
If you have not decided how to implement videoconference tools such as Zoom into your sales process, you’re behind the curve. Sharing online content and seeing customers’ buying signals will markedly improve conversions.
We are now at the start of the beginning. And that’s not just to the restart of holiday travel, but also to a new chapter in the UK travel industry’s evolution.
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