As people around the world line up for their Covid-19 vaccines, the global travel industry is anxiously looking for the light at the end of the tunnel. The debate will still ensue as government officials weigh the options of requiring proof of vaccination as borders begin to open to international travelers. In April 2020, air travel was down by 96% but has slightly rebounded to be down by 58% in our current environment.
Travelers still have hesitancy to book their dream vacations as the vaccine roll out continues. Industry experts do not expect travel levels to reach pre-pandemic highs until 2023 or 2024. “Many medical experts believe the solution to this uncertainty is herd immunity, which occurs when a sufficient percentage of a population becomes immune to infection through vaccination or previous infection.”[1] As immunity grows globally, there is not a “host” to allow the virus to flourish. The vaccine adds additional protection for those who choose to get it, but it is not infallible. Variations of the virus are emerging, and the long-term effectiveness of the vaccine is still unknown. South Carolina reported today that they have found two cases of the more contagious strain from South Africa. The variants found in this strain of the virus can be combatted with the vaccine but those with antibodies may not be immune. Virus variants have also been found in Brazil.
While countries still debate the topic of requiring proof of a vaccine before entry, companies like IBM, Microsoft and the Mayo Clinic are developing processes and apps that would allow people to keep their immunization records and other vaccines in the palm of their hands. The current environment allows for those who are vaccinated to have a paper copy of their immunization record. Countries right now have their own travel requirements, but the long-term goal is that vaccination requirements will be standard throughout the world. The protocols for what that looks like are still uncertain.
As the travel industry works toward recovery, not all companies are as optimistic about this year. Boeing posted a 2020 loss of almost $12 billion. The company’s issues began with two deadly crashes of their 737 max planes and were compounded with the pandemic. Boeing was in the process of selling their newest 777X jet for international travel. Those international routes are the ones suffering the most through 2020. “Its 777X program had already been beset by engineering delays. Boeing now says it expects to deliver the first one at the end of 2023, more than two years later than its forecast last April, because of weaker demand and increased certification requirements in the wake of the 737 Max crisis.”[2] Boeing lost $15.25/share in Q4 when analysts predicted that they would lose $1.80/share.
As the world looks to get people moving internationally again, we would anticipate some changes because of the pandemic are here to stay. Airlines and hotels must listen to their customers and adjust policies accordingly. We likely will still see flexible options in booking like no change fees and refundable fares from the airlines, and no monetary penalty from the hotel industry if the trip is cancelled. One trend that is anticipated is “revenge spending” in 2021. “Consumers are anxious to start ‘revenge’ spending on the things they have been denied over the last year—like travel, dining and in-person entertainment.”[3] The timing on reenergizing the economy is going to be dependent on how confident consumers are as they enter back into social settings.
[1] https://www.travelandleisure.com/travel-tips/travel-trends/covid-vaccine-travel-impact
[2] https://www-cnbc-com.cdn.ampproject.org/c/s/www.cnbc.com/amp/2021/01/27/boeing-ba-q4-2020-earnings.html
[3] https://www.ustravel.org/toolkit/covid-19-travel-industry-research
