Starving for leisure and travel

People will be itching for travel. However, that is likely to be quite limited in range and possibly complicated to get across borders. It will likely begin with local and regional travel by car and other smaller vehicles rather than buses, trains or planes. Resorts located within driving range of large metro areas can recover quickly, assuming they rethink their format and rearrange the furniture to keep their space broadly open. Buffets are out as that is a bad combination of crowding and exposed food to everyone coming up to the buffet. Buffet stations could remain with cook to order and no exposed food. That’s what rethinking their format means: even well after the crisis, people will have new instincts and reservations about certain environments that they perceive as unhealthy or unsanitary.

The virus crisis will also have unexpected repercussions in global tourism as people will remain hesitant to congregate in crowded places and may favor destinations that are less popular, thus less crowded, which in turn will boost these less popular spots and provide some relief to the destinations who have suffered from overtourism. For example, Venice would benefit if tourists choose to visit Ravenna instead or shorten their visit and continue on to Trieste. Hiking in the Swiss Alps instead of a lake Lucern boat cruise.

Even vacation shopping will change as people have grown accustomed to shop online while being stuck at home. They will still do their duty-free shopping, but instead of going to a crowded outlet mall, they will shop online with the same outlet stores provided that they offer same-day delivery to their hotel.

Cruises will suffer for a long time as people will now fear being trapped on a cruise ship with a spreading disease. It will take rethinking marketing and quite possibly refitting ships to reassure the public about health safety on board. The refitting, particularly air circulation, will be very expensive and may not even be economically viable on older ships. The cruise industry is heading into rough waters.

When international travel by air opens again, ticket prices will be significantly higher … or lower! Prices could go either way because the airline industry already had some serious problems before the crisis and these problems, now combined with the effects of the crisis, will trigger major changes and disruptions in the industry which could result in bargains for the consumers or severely reduced choices of flights, leading to steep increases in ticket prices.

Let’s open a parenthesis to understand what is happening in air travel. Before the crisis, the airline industry had some serious headaches because the philosophy in airline route systems is changing, and so is the marketing to match those changes. The old way was the “hub and spoke” route system where you bring all the flights to one place, like Atlanta or Dubai, where passengers then switch to the next flight to their destination. That’s what the double-decker A380 is best for. The new way is the “point to point” route system requiring smaller narrow-body, but long-range aircraft. That’s what the Airbus A321 and the Boeing 737 MAX were designed for. You already guessed one of the headaches: the B737 MAX that airlines need so badly have been grounded since March 2019 and production halted since December of that year. For some airlines that will set their business plans back by two to three years. Another headache is what to do with all those fuel-guzzlers wide-body aircraft which airlines need to retire and sell. Selling them is the real headache as nobody wants used fuel-guzzling wide-body aircraft and even after depreciation, these are very expensive assets that most airlines can’t afford to just write them off. So, some airlines, mostly the traditional, legacy, carriers are stuck with big planes they can’t use and cannot sell while other airlines, mainly low-cost carriers, cannot meet demand because they can’t get the smaller planes they need.

And then the Coronavirus crisis occurred and most airlines had to shut down entirely and will now face a recovery period with many unknown conditions while being handicapped with either too many wide-body aircraft or not enough narrow-body ones. The combination of limited flights on some routes due to either travel restrictions in some destinations or the lack of aircraft to serve secondary routes could drive tickets prices up sharply. On the other hand, the supply of seats on many routes will far exceed the demand until enough narrow-body aircraft become available again and that would drive ticket prices sharply downward.

People’s sensitivity to crowded spaces may also have some unexpected effects on demand, like for example, travelers being more inclined to pay extra for more space like Premium Economy seating if not business class.

This crisis will change social behavior and consumers may develop new perception values for the things and services they purchase.