Greetings From Travel's Intermission

Dear Valued Traveler: 

Fear not - the joys of travel will soon be upon us once again. 
This break is only temporary. 
The best of travel will be ready to welcome you back. 

Seats that are too close. 

People reclining making the use of a laptop all but impossible. 

The toddler behind you kicking the back of your seat. 

44 frequent flyers on the upgrade list for the 2 available first class seats. 

Your "VIP boarding group" (because you have the airlines credit card) 
will still account for 77% of passengers boarding the plane. 

All of that shall return… 

Highlights

• COVID-19 is changing the types of trips that travelers are interested in. Those accustomed to group travel (cruises, tours) are likely to look at those as higher-risk options (health-wise), thus, opting for FIT (independent) options,
• Airlines are trying to hold on to cash by issuing vouchers instead of refunds. Many customers are (unknowingly) entitled to refunds. Getting refunds is not always easy, however,
• The manual process of cancellation and rebooking has pushed airline call centers to their breaking point. Do old tricks of "cutting the line" to shorten hold times still work? In situations like this, is it better to book with an online travel agency?
• Are governments going to step-in and save airlines? What sort of protections are being offered to consumers when booking travel?
• What considerations should be given careful attention when planning your next trip? Where to go, when to go, when to book, and what if there is a COVID-19 relapse?
• How does watching videos of Arnold Schwarzenegger and his "pets" help you de-stress?

What a peculiar time to be writing about travel. Let's face it, an exciting travel opportunity these days is going down the street to the grocery store. That blissful feeling of getting out of the confines of your home. Maybe I will wear my jeans instead of my sweats? But do my jeans go with my facemask? And remember, if someone is walking towards you, it is now socially appropriate to swerve away from them like they were coming at you with a knife.

After social distancing is no longer mandatory, it may be hard to break our newly acquired behaviors that are quickly becoming instinctive. However, some instinctive behaviors will never be broken. For instance, my wife finds comfort in having a trip on the calendar that she can count down the days to. COVID-19 has put all future travel planning in a holding pattern (I miss holding patterns…), she was already getting "twitchy" without a confirmed trip to be obsessing over. With Easter now in the rearview mirror, it has escalated well beyond twitchy and I'm feeling the increasing pressure to book some trip simply for the sake of preserving the fragile peace in our shelter-at-home household.

Having spent the vast majority of my 25+ year career with at least one foot in the travel industry, let’s explore how travel is shaping-up in a post-COVID-19 world.

   COVID-19 > 9/11 + SARS + Volcano Eruptions + '08 Financial Crisis

The State of the Hotel Industry

The US hotel industry is running a pace where 80% of hotel rooms are empty which is translating to an average loss of $3.5 billion every week (source: American Hotel & Lodging Association). Hotels have been quick to furlough employees and the job losses since the mid-February escalation of the public health crisis and are now approaching 3.9 million jobs lost. Lost earnings for the jobless amount to $2.4 billion per week with 70% of hotel employees having been laid off. Most hotels in the US are owned by individuals or medium sized companies – 33,000 small businesses are at risk of closing their doors. While hotels are not going to disappear, seeing them reopen will take government efforts to help the industry survive the COVID-19 pandemic.

The State of the Airline Industry

Major US-based airlines are reporting that almost 90% of flights have been eliminated and on the remaining flights, 90% of the seats are flying empty. The Transportation Security Administration (TSA) reports that screening traffic across the US on March 31 was down 93% year-over-year. On Easter Sunday, April 12, traffic was down 96% year-over-year. The industry has dealt with SARS, multiple volcano eruptions, 9/11 – however, the impact of each of those were localized and resolved in a matter of weeks. COVID-19 is different from anything the industry has ever faced before – it is global and it is prolonged in duration. It may not be overstating when it is suggested that the "survival of airlines is at stake". Despite the gloom and doom, there is reason to be hold out hope for the future of many of the world’s airlines.

Governments Are Stepping-In

         1 in 10 jobs in the developed world depends on tourism.

Airlines are essential to a thriving tourism industry and government leaders have been clear in communicating the need that airlines are key to economic restart efforts. That is not to say that every airline is going to survive – some carriers were already staring over the cliff’s edge of financial ruin – COVID-19 may be what pushes them over the brink. Airlines in the US had until Friday, April 3 to make their initial application for $50 billion in federal loans and grants to help them survive. The UK Treasury has been slower to act and is taking a less comprehensive approach in extending credit facilities to UK-based airlines such as EasyJet – Virgin Atlantic and IAG (British Airways parent company) are working on similar programs. IAG has suggested that the UK airline sector needs a ￡7.5 billion bailout package in order to survive.

Getting A Refund Has Not Been Easy

Airlines are still reeling as they are in the midst of managing millions COVID-19 caused cancellations. Being at the beginning of a cash flow crunch, they are encouraging customers to take voucher credits vs a refund. If the airline cancels the flight, customers are usually entitled to a full refund back to the original form of payment. Even on “non-refundable” tickets. This is true in both the US and in EU countries – EC261 regulations protect EU consumers and UK (thru December 31, 2020 for UK consumers), despite Brexit. For problems securing a refund in the US, submit a complaint to the Department of Transportation and those are generally (and surprisingly) resolved in a matter of days. In order to keep your cash, airlines are offering bonus credits for taking the voucher credit over the refund – American Airlines was giving a 20% bonus on the value of the ticket and Frontier Airlines was giving a $50 bonus voucher. However, most airline cancellation policies where customers initiate the cancellation will result in being given a voucher for future travel and those will come with expiration dates. But, if you have the ability to have your cash returned to you, that is always your safest option.

Getting through to airlines’ customer service agents in the era of COVID-19 will try anyone’s patience – airlines have massive numbers of flight cancellations / changes to deal with and many have decreased the size of their call center staffing. Hold times are frequently 3+ hours and many of the rebooking and cancellation actions cannot be accomplished online – you HAVE to talk with an agent. If you are a frequent flyer with status, you may be successful in using the number just for top flyers – the hold times should be less than the general phone queues. If that isn't producing much better results, try a Jedi-master level trick that frequently works with carriers that fly to international destinations. Use Skype and call to the airlines reservation number in another country. With American Airlines, my go-to call is Japan. The agents are based in Tokyo, speak English, and can do almost anything a US-based agent can do. Plus, the agents are super-friendly. Buenos Aires and Sao Paulo are other good options, as well. Whether this is an effective technique in these extraordinary times, I have yet to test (these call centers may have been furloughed). One of the possible outcomes of COVID-19 could be that airlines will finally address the sub-optimal cancel / rebook process to make it so that most all transactions can be completed online by the traveler.

Booking through an airline vs an online travel agency can make a difference in your experience. Airlines generally insist that you work with the online travel agency that you booked your tickets with when it comes to refunds. So, you are unfortunately stuck with whatever level of service the online travel agency is offering. Online travel agencies operate on razor-thin margins and their customer service can easily get backed-up at times like these.

For citizens of the UK who were traveling / planning to travel on packaged holidays, COVID-19 will likely go down in history as the single largest test of the country’s ATOL scheme protecting packaged holidays. There was a massive repatriation airlift to return British citizens back to the United Kingdom that started on March 30 – this included those who booked with the airlines directly as well as package holidays protected by the ATOL scheme (the ATOL scheme does not cover flights booked directly with airlines). European regulation EC261 is still in effect for UK businesses and consumers. Hence, there is a good deal of consumer protection between ATOL and EC261, including, provisions that require airlines to exercise duty of care with delays and flight cancellations, and, package holiday providers being required to provide refunds once the UK government advised against non-essential travel to the riskiest COVID-19 destinations. However, for those hoping that the provisions within EC261 obligates the airline to provide extra compensation (over and above the refund of the trip cost itself) for cancellations made within 14 days of your booking date, airlines are generally protected under the “extraordinary circumstance” clauses. Seeking compensation over and above the refund owed are more than likely to be denied when extraordinary circumstances are involved. If an airline goes under / ceases to trade, regardless of where you live, your most likely protection will come from your credit card company who can issue you a refund for the failure to deliver services by the vendor.

China: First-In, First-Out. Early Indicators in Changing Travel Preferences and Behaviors

China is just exiting its lockdown phase in Wuhan and are allowing people to leave the area. A survey conducted by Trip.com Group shows that 77% of Chinese prefer to travel domestically for their first post-epidemic trip. That same survey also indicates that travel styles are changing – 71% saying that they would avoid tour bus excursions and 55% avoiding cruises due to perceived health risks which could be indicative of growth in FIT-type trips vs packaged tours. Chinese travelers are also looking for flexible options – seeking to purchase hotel vouchers that can be used at any time rather for a fixed date. With only 10% of Chinese travelers holding passports, there are suggestions that it will take some time before they return to global travel in a major way – opting to take domestic trips, then branching out for regional trips to neighboring countries in Asia, before returning to distant destinations in the Americas, Europe, and Africa.

Will the rest of the world follow China as they start to travel again? That is likely to governed by multiple factors at the very least to include economic (the financial state of travelers), availability (which destinations will be available to welcome travelers), and transportation logistics (which destinations will be easy to get to based on transport options).

Cruise Industry Outlook Remains Optimistic Despite COVID-19 Tarnish

Surprisingly, cruise is already showing early signs of the resiliency of their market – retailers like AAA and CruiseCompete.com are reporting that bookings for 2021 are looking strong, and, cruise review mega-site CruiseCritic.com conducted an online poll in which 75% of respondents reported interest in returning to cruising after COVID-19 subsides. And, we have yet to see aggressive marketing combined with attractive discounts that make cruise lines arguably the best retailers in the travel industry. While CruiseCritic.com may represent the most hard-core cruisers, 2020 and 2021 could hold great promise to those who enjoying taking multiple cruises per year.

Carnival, the world's largest cruise operator, has seen its stock price drop by 80% and recently sold 71,875,000 shares of common stock at $8 per share. One of the major buyers, Saudi Arabia's Public Investment Fund was able to pick up 8.2% of the cruise line as a result. This is in addition to recently raising $4 billion in cash financing to help it weather the storm. The future still looks optimistic for Carnival despite being at the center of travel industry focus during the COVID-19 pandemic with impacted sailings drawing global attention to Diamond Princess in Japan (February), Ruby Princess in Australia (March), and Zaandam in South America / Ft. Lauderdale (April).

Planning Travel In A Post-COVID-19 World

Is booking your summer holiday in Maui or Ibiza now a considerate 
act of noble public service? Maybe... 

When should you book and when is it safe to start your trip? If the temptation of low airfares seem too impossible to resist, don’t necessarily feel pressured to “get this done today”. Even when things start to settle down with COVID-19 and we see some restrictions lifted on our ability to move about our communities, airlines will be motivated to get people flying again. While there may be an increase from the incredibly low prices, fares will likely stay low for some time until the load factors pick-up. You should have some time to consider your plans and still secure a great deal. If you want to lock something in now, the safest bet for circumstances being OK to travel are in the July thru September timeframe. Travel may return in June, however, the number of cancellations may still be above average requiring travelers booking in that timeframe to have a higher probability of changing their plans. But, you would be doing airlines a cash-flow favor to book now rather than waiting –booking your summer vacation in Maui or Ibiza may be a considerate act of noble public service. That is going too far, but, so long as it is safe to travel, you are helping the economy and your fellow citizens in doing so.   

Cancellation policies on newly booked tickets are rapidly changing. Some of the changes give consumers greater protection in making bookings during this uncertain, volatile period. Before booking, verify what the airline’s cancellation policy is as they can vary depending on the airline. And there are some outstanding airfares in the market for peak summer travel – up to 50% discounts (or more) off of what would typically be charged. To encourage consumers to book now, many airlines are offering one-time waivers on their very expensive change fees – some even offer the one-time change on their “basic” economy tickets which are typically not changeable at all. These policies are generally in place, depending on the airline, on new tickets booked until the end of April or May for travel at any time in the future. The airline’s website will have information on what their policy is and how long it is good for. However, many of these policies are "one change only" – if you need to make a second change, or, there is a recurrence of COVID-19 lockdowns that prevent your travel according to plans, you may find yourself at the mercy of the airline when you go to change for a second time.

One of the questions being asked by travelers is how soon will international travel be an option? The answer to this requires a great degree of speculation as it is unknown how and when countries will open up their borders to non-essential travelers and start granting travel visas again. China is reporting that the vast majority of new COVID-19 cases are coming from imported / foreign sources. When considering that data, many governments may opt to take a cautious approach and delay opening-up their borders to international travelers right away. Hence, if you are looking to make reservations sooner, your safer bet may be to plan on a domestic trip. As a result of this, there is a high probability that domestic travel destinations could book-up quickly once people gain confidence regarding the economy and the timing of when travel will be possible.

When choosing a destination, keep in mind the likelihood that the airline will be actually servicing that destination when they restart service. With thousands of airplanes grounded, it will take weeks for airlines to restart service in a complex process that will need to juggle return to service maintenance checks, equipment location, prioritization of routes, revenue / passenger yield management algorithms, and more. Given airlines reliance on a “hub and spoke” network – flying from smaller markets to concentrate passenger volume through major “hub” cities – there are certain destination cities that may be prioritized lower when it comes time to restart service. If you are trying to get from New York to Spokane, Washington, you may see an available flight for sale now, but, depending on what happens during the re-start, the flight to Spokane might not fly. The safer path would be to plan your trip to Seattle instead and then get a rental car to drive to Spokane. Yes, it will be inconvenient with the 4-hour drive, but, the likelihood of your flight between New York and Seattle getting cancelled will be much lower than the likelihood of the connecting flight to Spokane being cancelled thus jeopardizing your entire trip. 

Should you use miles to book airline tickets or should you pay cash? Some airlines have been good about extending the life of miles so they don’t expire. However, this is varying on an airline-by-airline basis. So now is a good time to check out what the policy is to determine whether you should use cash to book your tickets, or, should you use your miles. Some airline loyalty schemes will honor requests to extend the life of the miles in your account, but, you will need to ask for this. The bottom line is to not let those hard-earned miles sitting in your account expire.

Did This Make Your Head Hurt?

Let me offer some advice that I learned when reading an article by the Wall Street Journal’s sports writer, Jason Gay. If you need to clear your head and de-stress yourself, watch Arnold Schwarzenegger on his electric mountain bike chasing his “pets”, a miniature donkey and horse, around his backyard. After you have finished laughing from watching the former Terminator / Barbarian / Mr. Olympia / Predator-killer / California Governor playing with his pets, Whiskey and Lulu, you can’t help but be in a better state of mind.

Schwarzenegger has found himself in a bizarre, COVID-19 lifestyle that he appears to actually be thoroughly enjoying. There are more videos – Whiskey and Lulu, as it turns out, are actually indoor pets. Arnold seems to be enjoying his quarantine a bit too much. Good for Arnold for giving us a laugh. This is exactly the type of diversion we all need. 

Now go start planning your first post-COVID-19 trip. And (please) wash your hands. Gov. Schwarzenegger, perhaps it is best to leave Whiskey and Lulu at home when you start traveling again.

About David Tossell

David Tossell is a 25+ year IT industry veteran – much of that travel marketing & distribution technology. Today he is a IT solutions and strategy senior executive at DataArt covering travel/hospitality, healthcare/life sciences, finance, retail/distribution, and media/entertainment. David is the market leader based in the company's Dallas office.

Contact David at [email protected] if you are interested in learning more about how DataArt can help your company in the design and/or execution of Artificial Intelligence, Machine Learning, and Data Science projects.

Any opinions expressed are David's personal point of view.