Travel Predictions – Living with Covid-19

The future of everything is uncertain. Travel is no different. However, leading travel experts and CEO’s have analysed travel in the aftermath of previous setbacks and data regarding the current pandemic, and together with leading analytical experts from Google, they have made best guess predictions about the future of travel.

The current year has understandably been the worst that the worldwide travel industry has ever seen. We aren’t just dealing with travel restrictions from the UK, but we also can’t travel to much of the world and inbound tourism has also been affected. People’s reluctance to travel means that even within the UK, we have seen a decline in domestic tourism. Next year (2020-2021) is predicted to fair better than this year, although much of that will depend on how people react now. At the moment, travel prices for 2021 are relatively low. However, with every industry taking a massive economic hit, prices are set to rise dramatically!

Airlines have been massively affected. As a result, future travel will look different. In a bid to absorb some of the losses, airlines have trimmed back their schedules so they now own less aircraft, depart from fewer UK airport bases, they fly to less destinations, their frequency is less and the seating capacity on board has been reduced. This means that in the future, it will be more difficult to book a flight because there will be fewer seats available. As a result, airlines will face a further financial shortfall, so to compensate, fares will undoubtedly increase. This will impact on flight only bookings as well as package holidays and tailor made holidays. There is a similar scenario with hotels, who are having to operate at reduced capacity in order to maintain social distancing. Therefore there are fewer rooms on sale, and the prices will inevitably rise to absorb some of the losses from 2020.

Therefore, if you are wanting to travel in 2021, it is strongly advisable to book now, whilst prices are low and availability is relatively high. This won’t be like normal years where a certain number of seats and rooms are held back to put on sale as availability reduces. Airlines and hotels won’t have that luxury because they will have to maintain a reduced capacity, so when it’s gone, it really will be gone! At the time of writing (mid-September 2020), there are lots of offers to encourage new bookings. I have many flights, accommodations and packages at reduced prices, but this won’t last. It is therefore crucial to get in touch and book soon to secure a booking at the lowest possible price.

Further predictions have been made regarding the number of travel businesses in operation. Before the pandemic, I had over 450 suppliers. However, that number has reduced slightly during the pandemic. But we are still in the government support period. Businesses can obtain bounce back loans, grants, and furlough. All of that is due to end in October, and with little to no income over 2020, many tourism related businesses with fragile business models will not have the cash flow to sustain them moving forward. Worldwide – Explorer Travel Holidays is in the fortunate position of being able to weather this storm, but that is due to a sensible account set-up. Many travel businesses are paying out what comes in instantly and if the cash stops coming in, they can’t pay out and will face liquidation. Therefore, with less competition, tour operators and airlines will be able to increase their prices, but it also means that there is likely to be less companies out there to provide travel products and therefore fewer travel products on sale to the general public.

In the last week, we have seen two major online travel agencies (OTA’s) giving up their ABTA membership. On the Beach and Loveholidays have been at the centre of much scrutiny and criticism for not refunding all of their clients (or not refunding them in full) when their bookings became affected by Covid-19. ABTA governs Package Travel Regulations, and part of this stipulates that clients are entitled to a full refund in cases where their holiday cannot proceed because the government’s Foreign & Commonwealth Office (FCO) has deemed it unsafe to travel to a given destination. At the height of the first wave of this pandemic, the entire world was off limits, with the FCO deeming non-essential travel out of the UK should not happen. This meant that clients were entitled to a full refund (minus any admin fees they had incurred for amendments to their booking pre-pandemic). ABTA – in this unprecedented situation – knew that the usual 14 day timescale was not feasible, so devised the Refund Credit Note (RCN) system, whereby the monies paid were fully guaranteed to be refunded via a RCN, which gave clients time to decide what to do. They could immediately re-book their holiday for a new date and/or destination, wait to see what happened and do this later, or wait until the RCN expiry date and get their full refund. However, if people knew they definitely weren’t going to travel at a later date, they could ask for their full refund immediately instead of the RCN and the refund would be processed as quickly as possible. I had all of the refunds through to my clients within 14 days of requesting them, but On the Beach and Loveholidays didn’t issue the refunds to many of their clients. ABTA insisted this had to happen, but to do so would have probably resulted in them going out of business, so they chose to leave ABTA’s membership and continue with the system they have been running.

At any time, but more so at a time like this, having both ABTA and ATOL cover on your booking is essential. They both do different things. ATOL is an Air Tour Organiser’s Licence and is issued if your holiday includes a flight. If an airline is based in the UK and the flight originates in the UK, if that business ceases trading, you would get your money back. However, this doesn’t always mean full payment. For example, if your hotel ceased trading but the airline was still able to fly to the destination, that wouldn’t fall under your ATOL protection. ABTA protection means that if your travel company goes out of business, you will be entitled to a refund which includes hotel costs. If you are abroad, your transport home will be covered. And if the FCO deems it unsafe to travel, ABTA protection would entitle you to a full refund. With less travel businesses predicted to be in operation once the financial support from the government ends, it is important that people ensure whoever they book through can provide both ABTA and ATOL cover. Please note, neither of these negate the need for travel insurance, which also usually covers you for the likes of curtailment, loss or theft of baggage and personal items, illness and injury. Having valid and suitable travel insurance remains a condition of booking.

One of the major predictions is that we will not see travel return to 2019 levels until 2024. This means less seats on flights, less rooms in hotels, less transfer availability, less excursion availability, etc. It will take time to re-build. Heathrow airport alone are having to make tens of thousands of employees redundant. When travel picks up, they will gradually need to re-employ, but that can’t happen in the space of days, weeks, or months. It will take years for travel businesses to have the financial security to be able to grow back to pre-pandemic levels. Until then, we will continue to live with disruption within the travel industry. However, it is vital that this re-growth does happen. The UK and world economy is heavily reliant on tourism. The industry is one of the largest employers and one of the largest revenue generators. We need tourism for our economy and our nation to thrive. It will look very different. Social distancing, wearing face coverings and hand sanitation are likely to be part of our everyday life for years to come. But we can adapt to this new normal within the industry. We have the versatility and flexibility to be able to respond to the changes that are needed. But we continue to need you to have a love of holidays and travel and to want to continue to go on holiday.

The future of the travel industry is in your hands.

Contact me to make your holiday or travel bookings. Created by: Julie @ Worldwide - Explorer Travel Holidays, September 2020