Like other industries, we expect the effects of the COVID-19 outbreak to have long-lasting impacts on travel. Given current information, we’ve included what we believe will be important to consider moving forward.
What we expect in travel behavior
It is highly likely that for the rest of 2020 and part of 2021, the United States and Europe will continue to implement social distancing measures and might even remain locked down. We expect borders to remain shut, particularly to countries with latent infections. Safe corridors will reopen (e.g. Germany, Switzerland, Austria), but with restrictions and health checks.
In APAC, we may expect a separation between wealthier countries (e.g. Singapore, Taiwan, South Korea, Australia, Japan) that will re-open with very strict travel restrictions and checks. In densely populated developing countries (e.g. India, Indonesia) the virus may create a large and lasting health problem. Travel to and from these countries would be highly restricted.
In the next 12 to 18 months, leisure travel will be mostly domestic or regional. This is the pattern that we are seeing in countries with reduced infection rates such as South Korea. Such domestic travel might be sizable, given that people are looking forward to getting out of their houses.
What we expect in air travel
Air travel will be massively reduced and only happen between safe corridors. Passengers would be required to wear masks and there would be temperature checks before boarding as well. Current estimates are that air travel will be at 10-30% of 2019 capacity in 2020, ramping up to 70% throughout 2021 and only get back to pre-crisis capacity in 2022 (assuming that a vaccine is available then).
What will make it particularly difficult for the larger carriers is that business travel will be restricted to essential travel for the next 6-18 months. Low-cost carriers such as Easyjet or Ryanair would need to operate with a fraction of their fleet. Government support will be necessary for all of them to stay afloat.
What we expect in accommodation
Hotels would need to operate significantly below capacity, which will make it difficult for them to survive. Many hotels will remain shut until the crisis is over. Vacation rentals might benefit, as they have much less fixed cost than running a hotel and offer more physical separation from other guests.
What we expect in travel experience operations
Attractions could reopen with very limited capacity. All bookings will be online and in-advance. Crowds and lines will need to be avoided.
Guided tours will be more private or limited to small group sizes. Masks would be required to ensure the safety of all participants. Vehicles need to be clean and safe.
Airport transfers might become more important, as travelers will stay away from public transportation and value reliable service with guaranteed hygiene standards.
City cruises and hop-on hop-off tours will likely suffer as social distancing can be difficult to implement on a bus or boat, particularly with closed rooftops. They can only run with limited capacity and strong hygiene standards (like masks, etc.).
Our goal is to quickly adapt to this situation and help you navigate these uncertain times. Look at our post about what you can do now to be ready for the tourism upswing. We also suggest you to read our COO Tao’s key takeaways for the travel community and watch our webinars for regional insights. Other pieces of content are in the works and will be shared with you soon.
If you are interested in more details about the current impact of COVID-19 on our industry, see the Arival Coronavirus Pulse study here. They are doing a new survey now to update their results. Take the survey here.