NEW YORK–Eight experts have weighed in on a subject of interest to many in credit unions—when will people be able to travel again, and what will the future of travel be like?
The Wall Street Journal sought out the insights from eight “travel pioneers” for their predictions, including current and former chairmen and chief executives of travel companies and a former secretary of transportation. All have experience from past crises and recoveries, the Journal noted.
“Most foresee a lasting decline in business travel, but think leisure travel will bounce back robustly,” the Journal reported. “That means airlines and hotels will have to change their business plans, being unable to rely as much on rich revenue from corporate travelers. Expect higher ticket prices and room rates for vacationers to cover the costs with fewer high-dollar customers to subsidize bargain-seekers.”
The Forecasts
Here are the forecasts:
- Robert Crandall, the former chief of American Airlines, told the Journal he believes video technology has matured enough to affect business travel in the future.
“The airline industry is going to have to examine its business plan,” said Crandall. “You are never going to see the volume of business travel that you’ve seen in the past.”
Crandall estimates one-third to one-half of business travel will go away as more meetings will take place electronically. Trips once thought necessary will be seen as superfluous, the Journal reported.
- David Tait, founding architect of Virgin Atlantic Airways. “Will it be as necessary to send road warriors out? I have serious doubts about that,” said Tait. “The business market is seriously endangered.” Speaking to the issue of video links that may enable processing of international passengers before they depart, rather than having them go through passport control lines upon arrival, Tait said, “There’s just so many parts on the ground that have to be worked out before we get it right in the air. The airport part of it has to get less daunting.”
- Jeff Potter, former CEO of Frontier Airlines said the frequently traveled hops will probably take the hardest hits, the Journal reported. “We’re all dealing with a case of the unknown,” he said.
- Hotels may be faring slightly better because many people have chosen to drive to destinations for summer getaways, according to Arne Sorenson, CEO of Marriott International, who told the Journal a significant rebound can happen without a vaccine. The Chinese and U.S. hotel markets have similar dynamics, according to Sorenson, who noted about 90% of guests in both places are domestic travelers. Occupancy rates are now over 50% in China, he says, up from 10%. “I suspect we will see travel mostly come back,” he told the Journal. But leisure travel will be a bigger piece of hotel business—a trend that started before the pandemic.
- “We’d like to see the world start to try to coordinate,” says Matthew Upchurch, CEO of Virtuoso, a network of luxury travel agencies, told the Journal. The lack of government coordination and reliability has left potential travelers with a fear of being quarantined or stranded, he says. The lack of clarity on airline and hotel refund policies has inhibited travelers as well, the Journal noted. Virtuoso agencies polled customers recently and found that relaxed cancellation policies were more important to people considering booking trips than a vaccine, the report added.
- William Franke, whose Indigo Partners owns Frontier, along with low-cost airlines in Europe, Mexico and South America, agrees on the lack of government coordination. “There is no unanimity from a regulatory perspective in the world,” he told the Journal. “It’s a mixed bag. It’s hard to keep track.”
- “Confidence is something you earn. It’s not a switch you flip,” Gordon Bethune, former CEO of Continental Airlines told the Journal. “It’s going to get fixed. But what we’ve gone through leaves scar tissue. So there’s some residual barriers. It will change behavior in some of us, not all of us.”
- Ray LaHood, U.S. transportation secretary from 2009 to 2013, told the Journal right now he wouldn’t get on a plane. Government needs to reassure a worried traveling public by imposing strict safety rules that would help build confidence. “If I were secretary, I’d be requiring temperature checks before anybody boards a plane and requiring all people wear masks,” said LaHood. “I think those requirements ought to be there. If they were, people would feel a lot safer flying. And I think that would help airlines.”