Issued 14 April 2020 - ideaworks ... resumption of travel behavior during this time of crisis and pain

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  • Issued 14 April 2020

  • Flight Plan 2020: How Travel Will Be Different IdeaWorksCompany.com LLC © 2020 Page 1

    Flight Plan 2020: 8 Ways Travel Will Be Different

    a Few Months from Now

    This CarTrawler-sponsored report focuses on post-virus consumer behavior and how airlines can

    best serve a travel economy in recovery.

    Contents

    We are travel people ................................................................................................................................ 4

    1. Capacity and inventory will decrease through business failures ............................................. 5

    2. Closer to home will define leisure travel for the near term ................................................... 6

    3. Health safety will become an ever-present factor ..................................................................... 7

    4. Consumers will expect low prices, and low prices will stimulate traffic .............................. 8

    5. Government investment will have strings attached................................................................... 9

    6. Change fees will be even more unpopular .................................................................................. 9

    7. A portion of business travel will never return ......................................................................... 11

    8. Google will be distracted by other opportunities ................................................................... 11

    “It’ll be OK” .............................................................................................................................................. 13

    The free distribution of this report is made possible through the sponsorship of CarTrawler.

    CarTrawler brings opportunities to life through a global online marketplace connecting

    partners, customers and suppliers. Its market-leading B2B mobility platform expands airline

    and travel partners’ offerings to their customers, while deepening those relationships and

    creating substantial ancillary revenue opportunities.

    CarTrawler provides unrivalled breadth and depth of mobility suppliers across the globe,

    including car rental, private airport transfer and ride-hailing services. CarTrawler works in

    partnership with many of the world’s biggest travel brands, providing mobility services for

    over a quarter of the top 100 airlines globally, including Alaska Airlines, Jetstar, SWISS, KLM

    and Emirates. As a B2B company they are focused solely on helping airline and travel

    partners build their brands, not their own. CarTrawler creates innovative, data-led

    solutions for some of the largest airlines and travel partners in the world, operating from

    headquarters in Dublin, Ireland, and offices in New York and Melbourne.

    Issued by IdeaWorksCompany.com LLC

    Shorewood, Wisconsin, USA

    www.IdeaWorksCompany.com

  • Flight Plan 2020: How Travel Will Be Different IdeaWorksCompany.com LLC © 2020 Page 2

  • Flight Plan 2020: How Travel Will Be Different IdeaWorksCompany.com LLC © 2020 Page 3

    About Jay Sorensen, Writer of the Report

    Jay Sorensen’s research and reports have made him a leading authority on frequent flyer

    programs and the ancillary revenue movement. He is a regular keynote speaker at the

    annual MEGA Event, spoke at IATA Passenger Services Symposiums in Abu Dhabi and

    Singapore, and has testified to the US Congress on

    ancillary revenue issues. His published works are relied

    upon by airline executives throughout the world and

    include first-ever guides on the topics of ancillary revenue

    and loyalty marketing. He was acknowledged by his peers

    when he received the Airline Industry Achievement

    Award at the MEGA Event in 2011.

    Mr. Sorensen is a veteran management professional with

    36 years experience in product, partnership, and

    marketing development. As president of the IdeaWorksCompany consulting firm, he has enhanced the

    generation of airline revenue, started loyalty programs

    and co-branded credit cards, developed products in the

    service sector, and helped start airlines and other travel

    companies. His career includes 13 years at Midwest

    Airlines where he was responsible for marketing, sales,

    customer service, product development, operations, planning, financial analysis and

    budgeting. His favorite activities are hiking, exploring and camping in US national parks with

    his family.

    About Eric Lucas, Editor of the Report

    Eric Lucas is an international travel, culture and natural history

    writer and editor whose work appears in Michelin travel guides,

    Alaska Airlines Beyond Magazine, Westways and numerous other

    publications. Founding editor of Midwest Airlines Magazine, he is

    the author of eight books, including the 2017 Michelin Alaska

    guide. Eric has followed and written about the travel industry for

    more than 30 years. He lives on San Juan Island, Washington,

    where he grows organic garlic, apples, beans and hay; visit him

    online at TrailNot4Sissies.com.

    Disclosure to Readers of this Report

    IdeaWorksCompany makes every effort to ensure the quality of the information in this

    report. Before relying on the information, you should obtain any appropriate professional

    advice relevant to your particular circumstances. IdeaWorksCompany cannot guarantee,

    and assumes no legal liability or responsibility for, the accuracy, currency or completeness of

    the information. The views expressed in the report are the views of the author, and do not

    represent the official view of CarTrawler.

    Eric, at his favorite summer retreat, Steens Mountain, Oregon.

    Jay, with son Aleksei and daughter

    Annika, in North Cascades National

    Park in Washington.

  • Flight Plan 2020: How Travel Will Be Different IdeaWorksCompany.com LLC © 2020 Page 4

    Flight Plan 2020: 8 Ways Travel Will Be Different

    a Few Months from Now

    We are travel people

    I have had the privilege of working in the travel

    industry for 36 years and I am determined to make it

    40 years. If anyone tells you the travel industry will

    not rebound, tell them they are “full of hops.”1

    Travel has been in my blood my entire life. This begins

    with a grand opening photo of infant Jay sitting on his

    mother’s lap poolside at the Travelodge hotel his

    parents built in Sarasota, Florida. It continues through my adult life in travels all over the world with my

    family, which includes visits to more than 90 national

    parks with my kids. My wife and I brought our three

    adopted kids from Latvia and South Korea courtesy of

    standby passes for airline employees.

    My son Aleksei continues the work tradition with a

    young career in the hotel business. It’s a generational

    thing, and my current mission has become doing my

    part in the recovery of our travel industry. I’m

    working to ensure a new generation can join an

    industry that has delivered a lifetime of enjoyment for

    me. Many of you reading this report can share similar stories. It’s certainly true – this

    business gets in your blood.

    Fortunately for us, travel is an essential element of being human. We work in a business

    that is a very meaningful part of modern life. People love to travel and business people need

    to travel. Travel will return again. Much will remain the same, but elements of it will be

    very different. This report helps you anticipate the changes that will occur as consumers

    return to airlines, hotels, vacation rentals, and car hire companies. We can learn from past

    economic challenges and global events that have tested the travel industry. However, I also

    rely upon a fair amount of conjecture because this pandemic is unlike anything I have ever

    experienced. Let’s begin the analysis of how travel will be different a few months from now.

    1 I live in Milwaukee which is a beer-brewing town; hops is a core ingredient of beer. It’s also a local

    replacement for the usual vulgar word one might use in this phrase.

    Hotel industry son Aleksei and airline business

    father sharing a hike in the Superstition

    Wilderness in Arizona, February 2020.

  • Flight Plan 2020: How Travel Will Be Different IdeaWorksCompany.com LLC © 2020 Page 5

    1. Capacity and inventory will decrease through business failures

    IATA estimates global passenger traffic will drop nearly 40 percent for 2020 based upon a

    spread of COVID-19 beyond earlier predictions. Who knows, subsequent estimates could

    place the reduction at 50 percent of 2019 traffic. IATA believes revenue will decrease by

    more than $250 billion for the year. Last year’s revenue estimate was approximately $900

    billion, so this represents a nearly 30% loss. As bad as this appears, IATA’s projections

    might be overly optimistic. As goes the airline industry, so go vast swaths of the travel