Happy Independence Day! I hope you will be able to take time and enjoy the long weekend. For some of you, this is the start of summer travel and you might be taking a trip somewhere. The travel industry has begun to see growing demand as we move into the summer travel season. However, not all travel will be the same, as much of the demand is directly related to the COVID-19 vaccine and reduced CDC restrictions. Instead, industry trends have emerged based on individual comfort levels as they apply to different modes of travel.
Below are some of the factors that have contributed to an increase in travel and how different industries are responding to it.
COVID-19 Vaccine and Traveler Comfort
The trends that impact a person's willingness to travel can be directly tied to two factors. First is the administration of the COVID-19 vaccine. In fact, according to the CDC, approximately 39 percent of the U.S. population was fully vaccinated as of May 2021.1 Second is the CDC’s reduced travel restrictions within the United States for those who are fully vaccinated.2
Both of these factors are contributing to the types of travel people are willing to take. According to a study from Deloitte, 54 percent of travelers are comfortable staying in a hotel, compared to 44 percent taking a flight or 35 percent attending an in-person event.3
With this in mind, let's examine some of the impacts these trends have had on specific sectors of the travel industry.
Since the start of 2021, interest and comfort in flying have steadily increased from 29 percent to 44 percent of individuals.3 Furthermore, the number of individuals passing through TSA has gone up significantly, from around 100,000 people a day in April 2020 to over 1 million people per day in April 2021.4 While this is a huge increase, the number of people flying is much lower than in 2019 where over 2 million people passed through TSA per day.4
Comfort and the increased number of travelers have also affected the way airlines are beginning to respond. For example, Delta Airlines stopped blocking off the middle seat of their flights at the beginning of May 2021.5
Another big difference to consider is domestic versus international travel. As of April 2021, 36 percent of individuals plan to fly domestic, while only 21 percent plan to fly internationally.3 This, along with the data above, indicates that individuals are becoming more accustomed to the idea of flying, but would be more comfortable with a flight within the United States.
Avoiding large crowds and staying isolated 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 Furthermore, the Bureau of Labor Statistics reported a 16.2 percent increase in car and truck rental costs for April 2021.7 Rental cars are an in-demand item, and you should be prepared to pay a premium on them this year.
However, this does not mean that road trips are out of the question. Around 49 percent of individuals plan to book a hotel in the next three months.3
Cruises remain the least likely to see improvement during summer. Not unsurprisingly, only 19 percent of individuals plan 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 nothing close to what it was in 2019 and prior years. 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.
The growing demand for travel will impact the prices of everything from plane tickets to car rentals and hotel stays. The exact amount will depend on the location and time of your trip. Be sure to enforce CDC safety restrictions, and keep the information above in mind as you go off on your 4th of July trip and / or plan your summer vacation.
This content is developed from sources believed to be providing accurate information, and provided by Attune Financial Planning and Twenty over Ten. The opinions expressed and material provided are for general information only.