THE FUTURE OF TRAVEL
Stories and studies about the future of travel are rolling across my laptop every day. Sometimes every hour. We’re all curious about what the future looks like for air travel, hotels, destinations and cruise lines. Not to mention travel agents and travel journalists like me. With that in mind, and given my 11 years as a full-time travel writer and now 42-year (yikes) career as a full-time journalist, I’m going to be writing a “FUTURE OF TRAVEL” blog pretty much every weekday, or maybe every day, from now until we get a better picture of what’s around the corner. I can’t say I’ll always be right, but I’ll try to make things interesting and informative. I hope this helps a little bit. Here’s my first FUTURE OF TRAVEL report.
I hate to be the bearer of bad news in a difficult time, but here goes.
There seems to be a current of thought out there that runs something like, “Gee, the airlines will have a hard time convincing people to fly in the next few months, once travel restrictions ease. I guess there will be some great sales.”
There surely will be some. But there’s a real problem looming in the industry. If airlines decide to create more space between passengers, and that seems likely to happen by force or by airline choice, that means more safety for passengers. But it means less money. Potentially a lot less money.
Not only that, but COVID-19 measures have accelerated the rate at which we’ve adopted new meeting/interaction technologies like Zoom. That almost certainly will cause cash-strapped companies to ease off on expensive (and potentially unhealthy) long-distance travel for their executives, at least in the short term And that’s another revenue problem for airlines, as those $5,000 lie-flat seats on flights between New York and London or Vancouver and Beijing are big money-makers for the airlines. Major airlines will tell you it’s those business and first-class air fares, in fact, that subsidize the rest of us poor schleps flying with our knees in our faces in economy.
This is what we’re used to in the sky, but it may not fly in a time of social distancing. Suhyeon Choi Photo/Unsplash
So, that’s two revenue sources down for the airlines in the new world that’s approaching. And they’re going to make up for this by lowering air fares? I’m not an economist (I can’t even balance a my own accounts at home), but I don’t think so. And neither does the head of the International Air Transport Association.
In a story in The Guardian today, Alexandre de Juniac, the director general of IATA, said that “if governments ordered airlines to adopt physical distancing onboard aircraft, at least a third of seats would remain empty and airlines would have to raise their ticket prices by at least 50% or go bust.”
“Either you fly at the same price, selling the ticket at the same average price as before, and you lose enormous amounts of money so it’s impossible to fly for any airline, particularly low cost; or you increase ticket prices by at least 50% and you are able to fly with a minimum profit,” he said. “So it means that if social distancing is imposed, cheap travel is over.”
IATA is warning that airline recovery is likely to be slow. While domestic routes will open sooner than long-haul, weak consumer confidence amid recession fears will undermine a quick recovery, said Brian Pearce, the group’s chief economist.
Pearce pointed to China, The Guardian wrote, where air travel bounced back initially when domestic flights resumed in mid-February, but said the recovery had since stalled with the number of domestic flights at just over 40% of pre-pandemic levels.
In a related story, The Guardian also says the chief executive at Europe carrier Ryanair says his planes won’t return to the skies if they have to leave middle seats empty to comply with “idiotic” social-distancing rules in the sky.
“The boss of the no-frills carrier, which has thrived by packing its flights as full as possible with passengers lured by low prices, has previously said that blocking out the space in between aisle seats is “nonsense” that would have no beneficial effect,” The Guardian wrote. “He doubled down on the comments on Wednesday, saying that if governments insisted on social distancing measures, then Ryanair’s business model would be in tatters and the carrier would not fly.”
Frederic Dimanche, Professor/Director at the Ted Rogers School of Hospitality and Tourism Management at Ryerson University in Toronto, told me in an email that he also sees a slowdown on business travel, “particularly on long-haul/international trips. Revenue managers will have a very interesting job to do in playing with fares and demand.
“Airlines won’t give away the seats but they need to be attractive enough from a fare perspective to entice travellers. For non-essential travel, people and in particular couples and families will think in terms of opportunity cost: What else could I do with that money? Is that trip worth the expense? Could I have a better holiday experience within a few hours driving distance?
“I think the appeal for international travel will have to be very strong. For example, first generation Canadians or PR (people) like me will invest in travelling because the VFR (visiting friends and family) “back home” will be a strong motivation. But I would not spend that amount of money to go to a resort at the beach in the Caribbean.”
I hope the experts are wrong. I hope I’m wrong. But I don’t think so.
