Travel will begin to pick up in 2021 but the sector is not expected to fully recover from the impact of the coronavirus (Covid-19) crisis before 2025, according to a study of global tourism industry research company Phocuswright.
Presenting data to the audience of the virtual 4th International Hospitality Forum, held by the Hellenic Chamber of Hotels on Monday, Phocuswright Senior Market Analyst Peter O’Connor said that with the release of multiple vaccines, a recovery in travel should begin in 2021 but overall it is expected to be slow and constant.
“Part of the reason for this is that airlines and many other suppliers, including hotels and tour operators, have furloughed both aircraft and staff and it is going to take time to get these services back up and running,” O’Connor said, adding that consumers appear still relatively resistant to travel.
“It will take a significant amount of time for a vaccine to roll out to cover the majority of the population, even here in Europe… We do not expect a full recovery, to those lofty 2019 levels, before 2025,”
According to Phocuswright data, 2019 was an exceptional year in most European countries, with estimations of the total travel market topping 300 billion euros.
Following the arrival of Covid-19, Phocuswright estimates that European travel market revenues will realistically only reach some 107 billion euros in 2020, which is nearly a 60 percent drop.
With a recovery expected to begin in 2021, the market size is estimated to grow to 168 billion euros.
The good news for hotels
Although the data on travel’s recovery may sound disappointing, O’Connor said that Mediterranean destinations such as Spain, Italy and Greece are forecast to have higher than average growth rates over that period.
“This gives us hope that when things do come back, they will come back better than ever,” he said.
More into the study, O’Connor said that recovery is forecast to be more rapid in the hotel sector than in many other sectors of travel, driven by demand from domestic and customers in adjacent European markets (intra-European travelers).
According to the data, nearly two out of three travelers across the US and most major European countries stress that travel remains an important part of their lifestyle and want to return to it as soon as possible. Already one in four are ready to travel domestically or into adjacent countries, with the figures growing to three out of four within six months and nine out of ten within 12 months.
While presenting the research, O’Connor underlined that while many travelers are comfortable with returning to travel within a year, although only a small minority are comfortable travelling in the near term.
“This is primarily driven by uncertainty, over sudden border restrictions, quarantines, regulations, fear of being stranded, cancellation and refund policies,” he said, adding that until those fears are addressed extensively, most travelers are unlikely to stir far from home.
Vaccine is key to travel recovery
Phocuswright research showed that the announcements about successful developments of vaccines proved to be the key issue in encouraging consumers to return to travel faster.
“Nearly 60 percent of consumers said that the deployment of a vaccine would make them more comfortable taking a trip within the next 12 months,” O’Connor said.
As the vaccine rolls out, leisure travel is expected to return.
“As people restart to travel, they are much more likely to travel to familiar destinations closer to home, which gives you some good indications of where you should be focusing your marketing efforts for 2021,” he told the audience.
Focusing on European travelers, O’Connor said that at least two out of three have indicated their willingness to travel within Europe by July 2021, led by the British and the Germans.
He also noted the European travelers’ reluctance to venture towards long haul destination in the short to medium term, as less than half indicated that they would be willing to travel outside of Europe before July 2021.
Greece is a 2021 key destination for European travelers
“We have a lot of Europeans wanting to travel that could represent a very interesting market for Greek tourism, with the Italians and French in particular offering high potential,” he said.
O’Connor added that Greek hoteliers should concentrate their marketing efforts on the European market, reassure potential customers that they are doing everything possible to insure their safety and put an emphasis on what a great value for money destination Greece is.
“And get ready for a good 2021 season,” he said.
The 4th International Hospitality Forum (IHF) was held for the first time in partnership with Phocuswright.
The Greek Travel Pages (GTP) is a media supporter of the 4th International Hospitality Forum.