July 30, 2020
Sales Opportunities in a Changed Travel Industry
The air travel market has been decimated by the coronavirus, but people are still taking trips that pose promo possibilities.
Among the hardest hit industries during the ongoing pandemic has been travel, posing untold challenges for countless firms in the space and for the promo companies that serve them.
In particular, business travel, once a primary revenue-driver for the air travel industry, is at a standstill. Most employees who traveled for business before COVID remain grounded almost five months later, and it’s having a deleterious effect on the airlines that will be felt for years to come.
Before the pandemic, business travel made up between 60% and 70% of ticket sales. In a recent survey of Fortune 500 CEOs, half said their company travel would never return to pre-pandemic levels.
“I don’t think we’ll ever get back entirely to where we were in 2019 on the volume of business traffic,” said Delta Air Lines Inc. CEO Ed Bastian earlier this month, after the company reported a record loss of $2.8 billion in Q1. Business air travel is expected to stay depressed for at least the next two years, analysts said.
Meanwhile, travel agents have reported huge drops in revenue. The Airlines Reporting Corp. recently announced they processed $1 billion in refunds to agents between March 9 and July 12 as a result of canceled trips, a 558% increase from the same time period last year.
Now, as air travel levels remain low, airline workers are preparing for fresh rounds of furloughs and layoffs. American Airlines announced last week that by Oct. 1, they expect to furlough more than 1,900 workers at Philadelphia International Airport, where it’s the dominant air carrier. United announced that 95 of its workers in Philadelphia are expected to lose their jobs for six months and longer, starting in October.
While “demand has moved slightly upward from its April low, down 95%, we have lost billions of dollars over this three-month period and are still spending far more than we are taking in,” United told the Pennsylvania Labor Department. “Additionally, we expect that travel demand will not go back to ‘normal’ until there is a vaccine for COVID-19.”
But all is not lost. For those who are still flying to job interviews, to visit family and friends or go on vacation, there’s opportunity for promo. Airlines continue to need personal protective equipment (PPE) to successfully implement safety measures; Southwest Airlines just announced that all passengers ages 2 and up must wear masks for the duration of the flight.
Learn more about our updated policy on face coverings and how we’re supporting your comfort and well-being at https://t.co/oK4EsiytDO.
— Southwest Airlines (@SouthwestAir) July 22, 2020
Fortunately, there are some signs of life in the travel industry. Ellen Overcast, a vacation specialist at Dream Vacations in Kutztown, PA, says customers are starting to book domestic trips, as well as to Mexico and the Caribbean, and are renting houses at the beach and in the mountains. They’re getting anxious to head back overseas as soon as they can, she said.
“Right now, clients are rebooking cruises and looking at resorts in warm destinations for the winter of 2021,” said Overcast. “Those who haven’t cruised before have a lot of questions, but it’s one of the safest ways to travel and vacation. That industry has actually set the standard in health protocols. They’ve always had sanitizer everywhere and emphasize handwashing before entering any restaurant. Now they’re working diligently with health professionals to create an even more enhanced health and safety strategy.”
But for those not yet comfortable with air travel or cruising, there’s always the opportunity to drive, either with a private car or recreational vehicle (RV). In fact, RV dealerships and campgrounds say they’re busier than ever. In Pennsylvania, for example, AAA is seeing a huge increase in sales of RV memberships. “[It’s] up 200% in comparison to last year,” Doni Lee Spiegel, PR manager for AAA Central Pennsylvania, told ABC affiliate 27 News. “So, I think that’s very telling.” And at Harrisburg, PA-based Meyer’s RV Superstores, sales this month are up 60% compared to July 2019.
“A lot of people are saying they’re just getting out in the country, going to see things that they hadn’t seen before,” general manager Chuck Jablonski told 27 News. “Some of them are still heading down to the beach like they normally did, but now they’re going to take the camper with them instead.”
Sandee Rodriguez, owner of D and S Designs in Bridgeton, NJ, said she and her family toured Gettysburg National Military Park in Pennsylvania recently and stayed socially distant by remaining in their car using the park’s popular self-audio tour. She said friends have been camping or road-tripping, and one recently traveled cross-country on Amtrak, which has also tightened its mask requirements.
The desire for wide-open spaces has certainly put parks in the limelight in recent weeks. On July 22, Congress passed the Great American Outdoors Act, which allocates $9.5 billion over the next five years for repairs in the national parks system. Parks like the Grand Canyon, Yellowstone, Glacier Lake and Joshua Tree are seeing a noticeable increase in vehicle and foot traffic due to a mass exodus from more crowded areas of the country. Other tourist destinations are encouraging people to road trip as part of their summer and fall “staycations.”
“Typically, we’re selling Niagara Falls to the world,” said Destination Niagara USA CEO/President John Percy, during a recent press conference with New York Lt. Gov. Kathy Hochul. “[But now] we’re closer to home. New York is important to us; New Yorkers have been through this pandemic in a big way. … So, we are reaching out to them, with our reopen campaign to New York state, and urging them to travel to us as well.”
But it’s still tough for traditional overseas travel. Some companies, like Viking River Cruises, are giving prospective guests virtual tours of their ships and different destinations in an effort to “beat the COVID-19 travel blues” and give prospective guests teasers to prepare for an eventual uptick in business.
“I can see how virtual travel might be a thing for a time until either the cases of COVID-19 die down or we get an effective vaccine that makes people feel safe to travel again,” Rodriguez said.
For airlines, cruise ships and rail transportation, such as Amtrak or regional networks, pitch masks and sanitizer that can be distributed to passengers at security or upon boarding, especially those who have forgotten theirs. With sweeping mask policies that include the little ones, remember to include kids’ sizes. Expect these orders to increase once again as more people rebook postponed trips.
Take advantage of the increased traffic at outdoor tourist destinations, like national parks, and pitch fall apparel to gift shops. Nearby retailers and restaurants will also continue to need PPE, signage and tents to maintain socially distanced dining outside. Campground sundry stores will appreciate camping necessities, like outerwear, chairs, blankets, flashlights and power packs, for guests who’ve forgotten theirs.
Target the RV market too – think folders for rental documents and operating instructions, along with keychains, drinkware and safety kits. Stores inside the dealerships can also offer items needed for trips, including portable cooking implements, sheets and blankets, towels, lanterns and chairs, all imperative for a road trip.