Summer of Recovery: Where does the Travel Industry stand?
So far through the middle of the summer of 2021, the travel industry in the U.S. has been recovering at a more rapid pace than expected. We will highlight some of the factors that have contributed to the increase in travel and where the overall industry stands.
COVID-19 Vaccine and Traveler Comfort
Individual willingness to travel can be directly tied to two factors. First is the administration of the COVID-19 vaccine. According to the CDC, approximately 48% of the U.S. population has been fully vaccinated as of July 14, 2021.1 55% of the population has received at least one dose of the vaccine. In addition, the CDC has loosened travel restrictions within the United States, especially for those who have been fully vaccinated2.
Both of these factors inform the types of travel people are willing to take. According to a recent study from Deloitte, 54% of travelers are comfortable staying in a hotel, compared to 44% taking a flight or 35% attending an in-person event.3
As of July 5, 2021, approximately 2.1 million people traveled through US airport security checkpoints, which was nearly twice as many as 2020; but still 20% fewer than in 2019. Most domestic airlines have stopped blocking off middle seats, as Delta has been selling all seats since May 2021.5 People are still favoring Domestic travel vs. International travel. As of April 2021, 36% of individuals planned to fly domestic, while only 21% planned to fly internationally.3
Car Rentals & Hotel Occupancy
While flights have certainly picked up, many people are electing to travel by car instead. Avoiding large crowd and mass transit makes a road trip an ideal alternative. However, individuals may find this difficult or more expensive than expected. Some car rental companies sold portions of their fleets in response to economic challenges created by COVID-19.6 As a result, rental cars are an in-demand item, and prices have soared this summer with rates at 60%+ higher than normal depending on the location. 7
Hotel occupancy was only down 10% from 2019 through June. This has been a significant recovery since it was down 69% at its worst point.8 Also, due to high demand in some areas especially in the coastal areas, travelers should expect that prices will be remain high and availability limited. This is also due in part to some labor shortages in some areas.
Cruises remain the slowest of the travel industry to rebound. Many cruise lines are starting to resume service with more planned in late summer. However, some locations including many international cruises have been cancelled for the remainder of 2021. Not unsurprisingly, only 19 percent of individuals planned to take a cruise in the next three months.3 This, coupled with the challenges of 2020, means the cruise industry may continue to face economic difficulties throughout the remainder of 2021.
The travel industry is recovering from the economic downturn of 2020. And though the industry is experiencing growing demand as we near a post-pandemic world, it is still not recovered to 2019 levels. Those planning to travel should remain up-to-date on guidance from the CDC and review the U.S. Department of State’s information and travel restrictions before finalizing their plans.