Forecast: Q3 2021 will record the largest travel volume increase since 9/11

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Forecast: Q3 2021 will record the largest travel volume increase since 9/11Global travel recovery reaching pre-pandemic levels by early 2022

CEO of MMGY Global Clayton Reid published the following report under the title "Travel in 2021 will be better and worse than you think": 

As we all process the short- and long-term effects of COVID-19 in our lives, jobs and leisure pursuits, I have been conflicted with the reality of a very real lethal threat to the world community and the incredibly important role travel plays in the success and lifeblood of small businesses, service workers and government tax-based human services. Yes, we need to wear masks, socially distance and protect others, but we also need to move our economy forward with travel as a lead economic boon.

In March, I shared a POV and still believe that many of our insights hold true and remain good guidance for the future. But I also must admit that the global cost, in terms of lives and economic struggle, has been larger than I ever expected. Over 1 billion people have been impacted by the virus and close to $2 trillion has been lost in travel, in addition to the over 4 million jobs lost in the U.S. alone.

As we look into 2021, there are many reasons to be optimistic as travel intent is climbing and vaccines are on the near horizon. In China, hotel occupancy and domestic flight numbers are now 90% of 2019 levels, and a study from McKinsey shows that Chinese intent to travel rose from 15% to 70% between May and August.

So, what does that mean for the year ahead in terms of demand, short-term trends, and long-term impacts in the rest of the world? Can we expect a quick bounce like many parts of Asia are experiencing?

The Consumer Mindset

As we talked about in March, travelers have moved through the four cycles of Fear, Understanding, Action, and Rational Behavior over the last nine months. You see it in the MMGY Travel Intelligence intent data that reflect moves in and out of this cycle.

Most interesting are the quick pivots consumers made as they began to understand the virus and the precautions necessary to travel safely. Flight, occupancy, and visitation numbers continue to be devastatingly below norms, but consumers have slowly tipped into travel albeit in different and constrained ways. As with the post-9/11 travel period, people will now prioritize travel in new ways that allow a connection and authentic experience that acts as a salve for the sense of deprivation in 2020, both in leisure and business settings. This socioeconomic and emotional reality, in aggregate, sets up for a very strong demand recovery despite the prognostications of some industry analysts.

While some suggest 2021 will reach only 70% of 2019 travel revenues, we think it will be much higher with a global travel recovery reaching pre-pandemic levels by early 2022. We think this could mean growth records in Q2 and Q3, though it will likely be a “K-shaped” recovery, with winners and losers. We base our more positive forecast on how intent data historically plays out, plus a much stronger household economic standing than was in place during past “recessions.” Savings rates are at peaks, consumers have been restricted in their movements (and therefore spending) and businesses have gone months without seeing customers and colleagues. As additional evidence, there is growing optimism in our social analytics tracking data that, along with the announcement of global vaccines, will lead to stronger than anticipated activity.

In MMGY Travel Intelligence surveys ending 2020, just over 50% of travelers told us they will get a vaccine immediately, but this data from Kaiser Family Foundation is much more hopeful for wide acceptance. We believe that 2021 will introduce a new vernacular around the rollout of vaccinations, almost a peer pressure to receive the shots. In travel this could very well take shape as a requirement to “pack your vax,” if you want to engage with suppliers, events and venues. We see vaccinations as a line of demarcation before many people will enthusiastically embrace collaborative work space as well as large leisure gatherings, and it is likely to become a social expectation (if not regulation) for global travelers to be vaccinated. Perhaps we will see vaccination vacation packages in 2021 or a trend tied to a term we have coined, “Vaxication,” to commemorate the first trip people take after treatment. In this way, the timing of vaccines is quite important to a recovery timeline.

The lack of travel this year has created a window of opportunity for start-up concepts such as Under Canvas, Selina, Avail and Bunkhouse, as we often see disruptors born in challenging market conditions. As travelers signal in our research that they desire something more original and authentic, new brands and travel experiences will have an opportunity to create a market.

Read the full report here

RELATED TOPICS: GreeceGreek tourism newsTourism in GreeceGreek islandsHotels in GreeceTravel to GreeceGreek destinationsGreek travel marketGreek tourism statisticsGreek tourism report

Photo Source: pixabay.com

 

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