Morning Consult Travel & Hospitality Analyst Lindsey Roeschke joins Yahoo Finance Live to discuss the fall travel outlook, the impact of inflation on the travel sector, and why business travel may never be the same.
- Summer travel season is winding down, the industry that saw a huge surge this year. Revenge travelers could experience a significant slowdown as rising prices and economic uncertainty put a damper on future travel plans. Here with the details on how consumers are feeling about travel this fall is Lindsey Roeschke, Morning Consult travel and hospitality analyst. Lindsey, nice to see you.
Let's just first start with this. It has been the summer of hell. Millions of frustrated travelers, lost bags, delayed or canceled flights. Have airlines begun to get it together?
LINDSEY ROESCHKE: Yes, that's the good news. Airlines are trying to get ahead of some of those issues. And, really, what was driving some of those summer travel issues was an increase in volume and airlines and airports, frankly, still being understaffed from pandemic cutbacks. So the good news is we're heading into a slower travel season. The fall is typically a little bit slower in terms of air travel, so it's getting airlines the chance to get ahead of some of those issues and hopefully get things back in order, in time for the busy holiday season.
- Hey, we certainly have seen a drop-off. Bank of America was out with a note earlier this week, saying that airline booking weakness off 23% last week versus the level that we saw in 2019. That demand that we're seeing starting to retreat a little bit. Is it happening maybe quicker than we had initially anticipated? And what does that tell us about how big that slowdown could be in the fall?
LINDSEY ROESCHKE: I think so. You know, initially, we really predicted a strong 2022 because COVID concerns were becoming less and less, and especially now that the CDC has lifted some guidelines in terms of quarantine for people who are exposed. You know, the COVID concerns are just less prevalent, and so we thought that people would get back out there, and certainly they did. But now what's really seeping in are the economic concerns.
So inflation and worries of a potential coming recession are causing people to tighten the purse strings when it comes to travel a bit, and so it's leading to a quicker drop off than we might have expected in that-- the downturn in volume.
- And we have a chart up there at the moment for Morning Consult. It's the of the travel and hospitality sector. And when you look at how far out people are willing to start booking their travel, is this something that we expected? Is it at the same levels from pre-pandemic? We see that-- obviously, going into the holidays in a few months, we're seeing that bump. But what about after that?
LINDSEY ROESCHKE: Yeah, so we can compare this data to data that we took earlier in the spring, and the folks that were saying that they were going to travel within a month or in the next one to three months we're very similar. Where we see a big difference is in that four- to six-month period. There was a kind of big downturn there.
So, you know, that is representative of, I think, that kind of coming fall, being a little bit slower, and folks being a little bit more concerned with booking far out in the future. That being said, when we look at booking windows specifically, they are actually getting a little bit longer. So people were waiting longer to book during the pandemic because they didn't know if they were potentially going to get exposed to COVID and have to cancel their trip. Now they feel a little bit more comfortable booking further in advance, possibly to find that better rate, but also because they're less concerned about a last-minute cancellation due to the coronavirus.
- Lindsey, what are the trends just in terms of where people are going? Is it domestic travel, international travel? What does that look like?
LINDSEY ROESCHKE: Domestic travel always outpaces international travel. When it comes to American travelers, it's just, you know, far more popular. That being said, international travel has come back slightly more, especially since those restrictions have been lifted in terms of not needing a negative test to come back into the country again. So international travel is, you know, showing a bit of a return but certainly not quite so much as domestic travel, and it's much more kind of leisure-centric than it is business-centric. We've seen a large downturn in business travel and expect that to last for a long time as well.
- Our audience, business travel, how close is it to pre-pandemic, and will it ever return to those numbers?
LINDSEY ROESCHKE: I don't think it will ever return to pre-pandemic numbers. We see consistently in our data, month over month, that large numbers of business travelers who traveled often before the pandemic are saying that they're never going to do so again. It's about 4 in 10 frequent pre-pandemic business travelers who say they'll never go on a trip again.
That's not to say that it's not come back in some capacity, but certainly not to the level that we saw pre-pandemic. And I would guess, based on those numbers, that it's never going to look like it did in 2019 or before.
- And, Lindsey, I want to talk about hotels, because you say they're actually poised to take market share from some of these vacation rentals, which were very popular during COVID, when people just didn't want to be around a lot of people in a massive hotel. So what do you think is making them poised for that?
LINDSEY ROESCHKE: I think it's a seasonal trend, to be honest with you. Vacation rental season tends to be very summer-centric. It's families traveling with children that need a little bit more space. It's groups of people going together when they could coordinate their summer vacations. And so, you know, we tend to see a little bit of a drop off going into the fall with vacation rentals. So I don't think it's an indicator of anything long-term. Vacation rentals still tend to be quite popular, especially among younger travelers, Gen Zers, and millennials, so we will continue to see that be the case.
I think it's just-- in fall, there's an opportunity for hotels to gain back some of that market share because, you know, they're not competing so much with the, kind of, beach house rentals that we see during the summer.
- Long holiday weekend ahead. Are we driving or are we flying?
LINDSEY ROESCHKE: We're doing a little bit of both. The TSA does anticipate that we're going to see a lot of passengers coming through the airports, so especially some of the larger hubs are going to be really busy. The Atlantas, the Los Angeleses. It's going to be a busy weekend at the airports.
But that being said, with gas prices having come down, people are more open to driving as well, so I think whether you're hitting the road or taking to the skies, leave a little bit of extra time because it's going to be a busy weekend.
- I'm staying home with the backyard. Lindsey Roeschke, Morning Consult, great to have you again. Thanks so much.