Happy Memorial Day! Here is Where the Travel Industry Stand as We Kick Off Summer

Last year was a historically bad year for many industries, however the travel industry was one of the hardest hit during the Covid-19 pandemic due to lockdowns and travel bans. However, the travel industry has finally begun to see growing demand as we move closer to summer. This growth in travel demand is closely linked to the rollout of 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. While Memorial Day Weekend has historically been one of the busiest travel times of the year, we can expect things to look a little different as we officially kick off Summer 2021.

Continue reading as we will look at some of the main 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 individual 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 inform 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 As more of the U.S. population gets vaccinated, our comfort level to travel will only increase and these percentages will increase.

With this in mind, let us examine some of the impacts these trends have had on specific sectors of the travel industry. 

Airlines

In 2021, the interest and comfort in flying have steadily increased from 29 percent to 44 percent of individuals.³ Also, the number of individuals passing through TSA has gone up significantly, from around 100 thousand people a day in April 2020 to over a million people a day in April 2021.⁴ 

As passengers' comfort level to travel increases along with the demand, many airlines will be forced to adapt to keep up with the high demand. For example, Delta Airlines stopped blocking off the middle seat of their flights at the beginning of May 2021.⁵

The information above shows that there is a growing level of comfortability in airline travel, however, it must be compared to previous years to help gauge where the industry is at. For example, over 2 million people passed through TSA a day in 2019.⁴   

Another significant difference to consider is domestic travel 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, as well as the data above, indicates that individuals are becoming more accustomed to the idea of flying, however many are still more comfortable flying within the United States. 

Car Rentals

Road trips may be an ideal alternative for many families this summer as it allows you to avoid large crowds while staying isolated. There is still a lot unknown about this virus and the vaccine so, avoiding large crowds may be more comforting for many. 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

Cruises are expected 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, as well as the challenges of 2020, means it is likely that the cruise industry may continue to face economic difficulties throughout the remainder of 2021.

After an economic downturn in 2020 it appears that the travel industry is recovering very nicely. Although 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. For those planning to travel this summer , you 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 your 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 plan your summer vacation.