With an eye on how the industry is prepared to pivot in a post-pandemic world, travel and hospitality industry leaders joined Yahoo Finance’s All Markets Summit: Road to Recovery on Monday to discuss the future of the sector that has been rocked and ravaged by the pandemic.
CEOs Ed Bastian of Delta Air Lines, Chris Nassetta of Hilton, and Glenn Fogel of Booking Holdings — the parent company of brands like Booking.com, Priceline, Kayak, Open Table, and Rentalcars.com — all agreed that repairing the tourism and travel industry is not going to be a quick fix.
“Recovery from travel is not going to be in quarters,” Glenn Fogel, CEO of Booking Holdings, said. “It's going to be in years.”
Even with an approved vaccine, distribution likely will be slow and adoption could be hotly contested. The “couple year journey,” as Bastian put it, means that there’s an appetite for travel, but under the circumstances that suit each traveler.
Here’s how travel after the pandemic might look, according to these experts.
#1 Cleanliness is here to stay
Hotels are tasked with restoring the confidence of guests and now that safety and hygiene is a top priority for guests, it’s incumbent on hotels to “step it up and make it so that it is safe to go to a hotel and people feel that it's safe,” Fogel said.
Nassetta said his team sprung to action during the pandemic’s onset in March and worked with the Mayo Clinic, Lysol, and Dettol to establish Hilton CleanStay, a new standard of hygiene and cleanliness that has since been rolled out to the company’s 6,300 hotels.
But cleanliness doesn’t stop in the guests’ rooms. It is carried out through modifying check-in, exercise facilities, and dining. All that said, guests can count on one hotel stay hallmark — the breakfast buffet—returning, Nassetta said.
“A lot of people love the breakfast buffet. Trust me, there is a way to do it safely and ultimately, you will be able to enjoy your breakfast buffet once again,” he said, forecasting it would return as soon as mid-2021.
Although Booking Holdings doesn’t have properties of its own, it is aiming to democratize information by including a description of what each hotel is doing to assure cleanliness and social distancing.
#2 Flexible bookings will take root
Planning anything in 2020 is like trying to hit a moving target and the travel industry has taken notice by extending financial grace to customers whose plans change at the last minute.
The optionality to cancel without a fee near the booking date is a request increasingly made by customers whose travel plans often hinge on government mandates that range from required self-quarantines to denied entry.
“Because it's not just whether or not they should travel, it's whether the governments want you to travel or not,” Fogel said. “It's very complicated” and it’s detracting people away from traveling.
Booking.com boasts a free cancellation policy, and Delta and United recently announced change fees have been permanently eliminated.
#3 Domestic travel will the norm for a while
Until the world reopens to Americans, travel will be relegated to domestic exploration.
“Domestic will come back faster than international [travel],” Bastian, Delta’s CEO, said, “We are staying focused every day to continue to see small signs, but encouraging signs, of light at the end of the tunnel.”
Fogel remarked that since interest in air travel has fallen, driving to destinations has picked up tremendously, forecasting that people’s “hyper-local” travel habits will “continue for some time.”
#4 Alternative accommodations will rival hotels
Travelers are opting for the comforts of home when they’re traveling, even if it isn’t their own home. Fogel explained that alternative accommodations — meaning short-term rental properties — is a trend that’s been building and the momentum will continue.
The de-emphasis on traditional hotel accommodations has really taken off in the pandemic-era among people who want to socially distance themselves and that includes keeping from hotel staff like housekeepers and receptionists, as well as other guests.
For Booking.com, more than 40% of new bookings were alternative accommodations in the second quarter — roughly doubling 2019’s bookings in the same category.
“Clearly, people said they want to go to a place where there aren't other people they have to worry about,” Fogel said. “Instead of getting into a crowded lobby or a crowded elevator, you're going to a home and you don't have to worry about anybody else.”
But it’s not all or nothing. Fogel emphasized that both can coexist in the hospitality industry and customers get another choice.
#5 Leisure travel will return before business
For those who are financially capable of traveling, Nassetta predicted they will take advantage of freedoms being afforded to them by remote work.
“People have a lot more flexibility with their time,” Nassetta said. “You put more flexibility with their time together with a burning desire to get out and travel, and a burning desire to create new memories, and that's brought you a whole bunch of leisure business.”
Historically, leisure travel is “more resilient than business travel” after crises, Nassetta said, but demand and activity is still slowly returning.
“It'll just take some time to get there and this has been a big health crisis,” he said. “It's created a lot of fear, and it's going to take time to sort of work through that.”
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