‘Bumping along the bottom…..’

Results of the Global OTT Survey of Travel Professionals August 2020

The effects of the worldwide reaction to the spread of the Covid-19 virus have been devastating for the Travel and Tourism industry. International business and leisure travel by air has been largely deterred or prevented so that the traditional summer season in the Western hemisphere has been fractured like never before. Between June and August 2020, ACI Europe data on airport passenger numbers shows some slight recovery from the worst situation in June when traffic was 93% down, to end August when it is still 70% down over the previous year.

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 will help to spot where and when travel markets are recovering.

This is the update of the first survey carried out in May 2020, which was reported earlier. This survey relates to the opinions of respondents concerning their results in the June/ July period.

Survey findings: Summary

• Bookings remained low in June/ July 2020, with 66% of respondents reporting loss of bookings 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 2021 seems to be the next booking opportunity. Summer 2020 bookings were largely confined to local/ regional destinations

• The personal impact of the crisis has been simply devastating, with 44% of respondents (about the same as last survey) estimating that they will lose 60-100% of their incomes in 2020.

• The 154 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 into what is happening, both for themselves and across their companies.

Bookings

There are some 66% of respondents reporting drops of between 60-100% in bookings in June/ July 2020, with some 47% of these suggesting the level of their reduction was 81-100% of their bookings. This represents an improvement from the May survey when 79% of respondents reported drops of 60% or more.

Dealing with the Crisis

As in the previous survey, It was clear all options for reducing headcount costs were being utilised, with working from home a major option. In comparison with the previous survey, the proportion reporting redundancies and furlough options being used had increased

Recovery

Three months on from the previous survey, and the horizon for recovery seems to be moving outwards. 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 2 years or more.

On revenues the story is inevitably more pessimistic, with the median response being 1-2 years for recovery, and some 31% now 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. The UK and Europe still had a higher level of bookings for Summer and Winter 2020, although the UK ones were significantly domestic.

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

Personal Earnings

These responses indicated the catastrophic effect on personal earnings seen globally across the sector, with around 43% reporting they expected to earn 60-100% less in 2020 as a result of the pandemic (It was 44% in the May survey). Only (% suggested there would be no impact on their earnings in 2020, in some cases due to their role (e.g. as destination marketers).

Conclusions

The view from the front lines of the agency community confirms the crisis that that Covid-19 has brought across the industry and the travel sector. While some slight improvement has occurred the fundamental barriers to international travel remain, together with deep uncertainty about changing regulations and procedures. The next survey will hopefully show some more stability, although the horizon for ‘recovery’ continues to move outwards.