The summer of “revenge travel” after months of COVID lockdowns is officially over, and the companies that serve the industry – including promo – are once again feeling the pinch.

While the industry showed promising signs of life earlier this year, ongoing COVID fears, onerous (and variable) health requirements, flight and event cancellations, and labor shortages have forced travelers to once again abandon trip plans and rebook for 2022 and 2023.

Airline performance, a prime indicator of the health of the travel industry, has weakened since August. American, United and Delta have all lowered their outlooks for Q3 revenue. Delta CEO Ed Bastian said business and international travel bookings have slowed, both of which are critical for the larger airlines. Southwest also reported fewer bookings for domestic leisure travel.

Meanwhile, staff shortages are plaguing virtually every travel-related business, including airlines, hotels, restaurants and attractions. Disney World hopes to hire between 700 to 1,100 workers weekly through the end of 2021 to keep up with tourist demand. Up north, the Michigan Restaurant and Lodging Association says a whopping 88% of hotels and restaurants don’t have the staff to sustain their businesses.

Hotels across the country continue to suffer because of staff shortages and a lack of trade shows and conventions. In Washington State alone, hotels are poised to lose $1.4 billion by the end of this year, compared with the end of 2019.

“The lodging business is still really hurting because of the drop in travel and convention business,” Anthony Anton, president and CEO of the Washington Hospitality Association, told local outlet KOMO News. “It is staggering.”

In Boston, hotels have had to make significant cuts to their services, such as reduced hours for room service, closed restaurants at the lunch hour and housekeeping every few days instead of daily.

Hotels in Boston are some of the hardest hit by the pandemic. Read the impact it is having on local economic growth and recovery: https://t.co/ORh78w2lAK.

— American Hotel & Lodging Association (@AHLA) September 10, 2021

The American Hotels and Lodging Association says nationwide, hotels will have lost $59 billion in just business travel revenue between Q4 2019 and Q4 2021.

While domestic travel challenges continue, international travel too poses obstacles. In addition to lack of staff, island resorts have long lists of health requirements, while the European Union has recommended that U.S. visitors should not be allowed to travel there for non-essential reasons (like leisure), but has left it up to each member country to allow or restrict as it sees fit. That’s led to confusion for people who had booked trips. And now, with tumult in the Middle East, particularly in Afghanistan, they’re once again expressing apprehension about safety.

It’s a combination of factors that’s putting long-term pressure on the travel industry’s recovery, including the promo companies that count it as a client.

One distributor who normally focuses primarily on travel clients says it’s been very difficult in recent weeks. “We were starting to see some hopeful progress, only for it to regress,” she says. “My clients are super tight on spending and worried about their jobs again.”

While beachfront hotels and inland wineries are doing well in Shelley McConnell’s area of California between the Bay Area and Los Angeles, she says labor shortages have been challenging for business owners. “Some restaurants and bars have had to close during the day due to lack of staffing,” says the president of Printpal Promotions & Printing (asi/299946). “It’s a huge problem.”

Ellen Overcast, vacation specialist at Main Street Getaways, a Dream Vacations franchise in Kutztown, PA, says it’s been challenging to keep track of the many requirements for getting to destinations – from proof of vaccination and negative tests done within 48 hours of departure, to jab requirements at eateries and attractions. Then, once they do arrive, guests are faced with disappointment as labor shortages force them to wait in longer lines and attractions close early or even completely. The situation is understandably giving people pause, and many are choosing to wait it out instead.

“Things were picking up, but now they’re cancelling again,” says Overcast. “I’m working on trips for 2022 and 2023 at this point. We really hoped it would have picked up by now.”

Michael Sinensky is a hospitality industry entrepreneur and investor who pivoted to PPE during the pandemic with his sourcing company, WeShield. He says that in New York City, one of the world’s preeminent tourist destinations that’s been hard-hit economically during lockdowns, private businesses like restaurants, movie theaters and gyms, many of them critically short-staffed, now must require proof of vaccination at their doors by order of Mayor Bill DeBlasio. And that’s been challenging for owners who are grappling with extremely lean staff numbers while possibly alienating guests.

Across Sinensky’s restaurants in the Big Apple, including several luxe sushi bars and high-end sports bar The Ainsworth, he estimates that about 10% of all reservations are canceled once diners find out they’ll need to provide vaccination proof. “They call us to cancel and say they don’t need to give us their business,” he says. “They’ll even say they’re vaccinated but that it’s none of our business.”

“Things were picking up, but now clients are cancelling again. I’m working on trips for 2022 and 2023 at this point.” Ellen Overcast, Main Street Getaways

It’s creating a storm of challenges that hospitality companies are having a hard time contending with. “Everyone’s nervous,” says Dr. Jan Louise Jones, professor of Hospitality and Tourism at the Pompea College of Business at the University of New Haven in Connecticut. “Travelers are hesitant about booking flights and cruises that could get canceled, and businesses just don’t have enough workers. The hospitality industry is in crisis mode. Companies aren’t looking at big strategic plans; they’re just trying to figure out how to survive and open for business with minimal staff. We’re predicting that full recovery won’t take place for another two to four years.”

In an effort to help with recovery, Overcast recently participated in a “test cruise” for Royal Caribbean. She, along with other travel agents and premium members, traveled for six days (mostly at sea) with CDC representatives who walked the ship and monitored how the voyage was managed from a health perspective in order to approve the ship for actual voyages. At one point, passengers were labeled “vaccinated” and “unvaccinated” with different wristbands, and staff labeled certain areas of the ship “vaccinated only.”

“It was crazy what the crew had to go through to get on board,” says Overcast. “They had multiple quarantine phases and they’re not allowed off the ships at all. But I was really impressed. Everything was very safe, but there are still a lot of restrictions. Avid cruisers are ready, but I tell a lot of people to just wait a little while to book.”

And while some are opting for domestic travel, the real possibility of flight cancellations because of labor shortages have compelled many to change their plans. “Airlines are short-staffed, both flight attendants and ground crews,” says Overcast. “They schedule all these flights and then cancel at the last minute. The good thing for me is that more and more people are using travel agents to help with their plans. I can sit on hold for them.”

Instead, tourists are booking regional trips, many of them car rides to Airbnbs for outdoor adventures. Ski resorts are already almost completely booked for the winter months, says Jones. Overcast has been helping travelers plan road trips (like historic Route 66 from Chicago to Los Angeles) and National Park visits with a hotel stay or two along the way. Ireland and Italy have remained popular for 2022 bookings, she says, but overall, international travel will be hampered for the rest of the year.

“My gut feeling over the next few months is that people will be changing their plans,” says Jones. “But in the near future, they’ll want to get everything in place to travel. There will be a market for those who are ready to figure it out.”