'The only way is up'

Results of the Global OTT Survey of Travel Professionals April 2020

As the fireworks died away in early January 2020, most people across the travel and tourism industry settled in to market, sell and deliver an ever widening range of exciting travel and tourism products. In 2019 these had created a global economic impact of almost USD9 Trillion and been responsible for 1 in 10 jobs around the world. Expectations were of average growth of 4-5% in industry revenues and bookings. By March the industry was in freefall, with flights slashed, hotels and attractions closed and a majority of countries where the population were largely confined to their homes. Far from the ease of instant travel to the other side of the world, travel to the corner shop had now become a serious issue. Amidst all this, travel professionals watched in disbelief as passengers and businesses cut virtually all their forward travel plans, and suppliers struggled to think of ways to survive a complete loss of their revenues, for an unknown period of time.

When infrastructure collapses, the item which is often in immediate short supply is objective information to base decisions on. OTT in association with Ascend by Cirium decided to run short monthly industry surveys to produce indicators of the state of the industry, asking the 60,000 global travel professionals with whom they work 'What is happening in your market sector?'. Given the close wholesale and retail involvement of these target respondents, they can report both 'upstream' on travel suppliers such as airlines, hotels and tour operators, and 'downstream' on the leisure and business passenger opinions. We are sure that the industry will recover, as it has from so many other past crises of health, war or economic recession, and this survey (which will be repeated monthly through 2020) will help to spot where and when travel markets are recovering.

Survey findings: Summary

• Bookings plummeted in April 2020, with 79% of respondents reporting booking losses of 60% or more compared with 2019.
• Short time working, home working, furlough, redundancies, recruitment freezes are all being used by employers to cope with the downturn.
• The median respondent believes it will take 1-2 years for revenues in their sector to recover, with enquiries picking up sooner
• Summer 2020 seems largely to have been written off at the moment, with respondents reporting five times more bookings currently for Summer 2021 than for Summer 2020. Any summer 2020 bookings seem to be confined to local/ regional destinations
• The personal impact of the crisis has been simply devastating, with 44% of respondents estimating that they will lose 60-100% of their incomes in 2020.
• The 345 Survey Respondents came from across the globe - Canada, France, Germany, Spain, UK, USA, India, South Africa, Australia, Netherlands, UAE, so they provide a wide insight in to what is happening, both for themselves and across their companies.

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Bookings

There are some 79% of respondents reporting drops of between 60-100% in bookings in April 2020, with 61% of these suggesting the level of their reduction was 81-100% of their bookings.

 

Dealing with the Crisis

It was clear all options for reducing headcount costs were being utilised, with working from home a major option. Several did point out that they worked from home already, but that other options were also being used - although the individual freelance respondents of course had little room for manoeuvre.

 

 

Recovery

While around a third of respondents are hoping to see recovery in enquiries in 3-6 months, the median respondent suggests it will be 6 months to a year until this happens. There are some 20% who think it will be 1-2 years.

On revenues the story is inevitably more pessimistic, with the median response being 1-2 years for recovery, and some 25% thinking it will be 2-3 years or longer before revenues recover.

 

 

Areas of Bookings

The respondents were reporting very low levels of enquiries for Summer 2020 bookings, with enquiries for long haul travel especially hard hit for this period. Highly unusually, the level of booking interest for Summer 2021 reported was five times the level of Summer 2020. The enquiries for Winter 2020 were also about twice as high as the interest expressed for Summer 2020.

Both the winter 2020/21 and Summer 2021 data suggested that there was a postponement of planned long haul trips in the near term, and that these may come back in time.

 

Personal Earnings

These responses indicated the catastrophic effect on personal earnings seen globally across the sector, with around 44% reporting they expected to earn 60-100% less in 2020 as a result of the pandemic. Only 7% suggested there would be no impact on their earnings in 2020.

Conclusions

The view from the front lines of the agency community confirms the catastrophic effect that the Covid-19 crisis has had across the travel sector. This survey probably represents the worst that the industry will see as a gradual rebuild takes place. Next month's survey will show if, and where, some small green shoots are starting to appear.