5 Emerging Trends in the Travel Industry

Travelers are shifting to private properties instead of crowded hotels and resorts. Many prefer driving to flying and have returned to using travel advisors and trip insurance. As the industry is relentlessly transforming, businesses need to follow emerging trends to stay afloat. I had the opportunity to sit down and talk about the hottest emerging trends in the travel industry with Tatiana Buyanova, a head of business development at Travelpayouts, an affiliate marketing network focused on travel, shared insights on five emerging trends.

1. Domestic and regional travel

Forced to stay within the borders of their own countries, travelers will start exploring their surrounding regions and cities. As soon as it’s more or less safe to leave the house, people will want to make up for the downtime and look for domestic travel opportunities. For example, go on road trips, visit family, escape the town by travelling to the countryside, and so on. 

It’s expected that countries will gradually lift travel restrictions and domestic travel may be allowed first. Right now, in China, there are more than 5,000 daily domestic flights, while international flights are multiples less:

The example of Turkey shows that domestic tourism will return earlier than international travel. Turkish Airlines has drafted a flight plan and will resume domestic flights in June and gradually resume international flights during June, July, and August.

According to statistics on hotel reservations in the UK, France, Spain, Italy, and Germany, domestic tourism in Europe is also recovering faster than international tourism:

Domestic and regional tourism is one of the main trends in the post-coronavirus travel world, and we described it in detail in the article below

2. Booking windows

In the face of uncertainty, it’s difficult for tourists to plan their trips in the same way as before, which affects booking windows. To help customers make purchases with fewer risks, travel companies have changed the terms of return or exchange. For example, United Airlines offers a flexible window on new and existing bookings until September 2020.

In April 2020, extremely short booking windows dominated. With gradual normalization, we in Europe faced booking window changes. The number of bookings within 2 to 30 days before the trip has grown, while the number of reservations with a booking window of more than 91 days falls every week:

According to the ADARA Traveler Trends Tracker, booking windows in the United States have also undergone a change:

• Domestic flights. The proportion has barely changed: advanced booking to 15 days for business trips and over 91 days for family trips are still widespread. In the meantime, the departure window for solo travelers and couples moved from 31 to 60 days to either advanced booking (up to 15 days) or over 91 days. 
• Domestic hotels. For business travelers, advanced bookings up to 15 days are still the most popular, with other departure windows bringing similar volume. Family trips moved from advanced bookings to a departure window over 91 days, while solo travelers and couples booked hotels up to 15 days before departure.

You can also check data for EMEA, APAC, and China.

3. Travel purpose

Family leisure still brings more flight bookings than solo tourists, couples, or business travelers. As for hotel stays, business travelers made more bookings than leisure tourists up until recently, but, as of May 4, 2020, the booking volume has been evenly distributed between all three. You can find more data from ADARA research below:

The ratio of travelers for leisure and business depends on the region. In EMEA, the situation is the opposite to the US, as more people fly for business purpose than for leisure. You can follow the travel purposes in the constantly updated Adara report.

4. Mobility trends

Since the emergence of COVID-19, travel has taken on a different nature. There has been a 93% decrease in the number of air passengers, ground transportation has also been largely reduced, and cruises have been cancelled, as people are cautious of crowded places. What transport modes will rebound the fastest once the COVID-19 pandemic is over?

Air travel is massively reduced and is expected to remain at less than 30% of last year’s capacity for the remainder of 2020, regaining its former level only by 2022. 

Flights might first open up between safe corridors, such as Germany to Austria, for example. While some travelers canceled their vacation plans for at least six months, others are seeking low airfares for existing flights and are ready to travel as soon as the current restrictions are lifted.

Ground transportation has also experienced up to a 90% drop in major cities around the world, as people are being asked to avoid crowded places and maintain self-isolation. Operators have to comply with strict hygiene protocols, limit the number of passengers, and consistently check their health.

Private mobility may be on the rise over the long term, as travelers feel safer in privately owned vehicles and don’t want their trip to depend on flight cancellations. As a result, drive-to destinations will increase in popularity. The Longwoods survey showed that 22% of those who changed their vacation plans for this year switched their form of transportation to driving instead of flying.

Cruises will also become safer by introducing more procedures to control onboard illness and extend onboard medical capabilities.

5. Products

What kinds of products will see a surge in the coming months and years?

• Vacation rentals. For social distancing reasons, hotels and resorts are seeing a large decrease in bookings. Heightened guest turnover makes it hard for people to stay isolated and for hotel staff to disinfect rooms. Thus, private accommodations will find greater favor, as their owners are now enhancing safety measures, such as automatic locks, contactless food delivery, and space out rental periods. For example, the insurance company InsuranceMyTrip has already seen a 6% increase in vacation rentals in comparison to 2019, as well as drop in hotel bookings.
• Car rentals. As people are increasingly opting for close to home and drive-to destinations, demand for car rentals is expected to increase. Cars simultaneously allow travelers to stay isolated and move around as they please, thus more and more people will opt for driving over flying.
• Flexible bookings. To encourage people to book trips, companies around the world are introducing major changes to their policies, such as last-minute cancellations. Stronger demand is expected for the winter season, with reservations for Thanksgiving, Christmas, and New Year being up by 38%, 40%, and 23%, respectively, compared to 2019. This, naturally, will affect the budget allocations of travel companies, as they’ll need to be able to reimburse canceled bookings and preserve cash at all times.
• Travel insurance. Thanks to the rising health and safety concerns, travelers are increasingly aware of the importance of travel insurance. Up to 30% tourists are expected to buy travel insurance before hitting the road, say industry experts. Furthermore, some companies have upgraded their insurance policies and included “cancel for any reason” and medical evacuation options. 
• Travel advisors. Canceling a trip and obtaining reimbursement has proven difficult and time-consuming, so travelers are now turning to the services of travel agents. Not only are agents able to help savvy tourists plan a trip and better navigate cancellation policies, but they also support travellers to reassess their personal finance and travel goals. 

Types of trips

According to industry experts, travelers are more likely to opt for these types of trips during the remainder of the year:

• Close to home trips and drive-to destinations.
• Multi-generation trips. Many families haven’t been able to meet up because of quarantine for a few months and travel agents are expecting multi-gen trips to rise significantly once travel is safe again.
• Longer trips. More and more travelers now prefer to book up to nine-day stays instead of the average three-and-a-half to five-day rental periods from before the pandemic.
• Vacations requiring advanced planning. Travel agents report a rise in vacations that require booking a year or more in advance. For example, African safaris, honeymoons, etc. People have been put on hold and want to have their dream vacation happen as soon as possible.
• Trips to remote places. Tourists will also be likely to open up to more isolated and less populated destinations. For example, traveling to a country with high population density, like India, will be more dangerous than travelling to Italy, for instance. Remote destinations like Africa should expect an increase in tourist inflow, according to Jessica Nabongo, founder of the travel firm Jet Black.