Travel Ticks Up as Summer Vacation Season Gets Underway Amid Virus Concerns

STIR-CRAZY AMERICANS are beginning to travel again as the summer vacation season gets underway after coronavirus-related stay-at-home orders were lifted across the country.

Though still severely depressed compared to normal levels, hotel bookings have increased steadily over the last several weeks, air travel is on the rise and car trips are up – fledgling signs that the travel and hospitality industry, which came to a near-standstill amid coronavirus restrictions and anxieties over the spread of the virus, is beginning to see the start of a recovery.

"While these are modest gains, they are gains nonetheless. I think it's fair to say that the travel recovery has now begun," says Adam Sacks, the president of Tourism Economics, an Oxford Economics company that analyzes the travel sector. "There was literally nowhere to go but up."

Overall spending on travel is creeping up after absolutely plummeting in March, according to figures from the U.S. Travel Association.

Airline travel has increased gradually since bottoming out in mid-April, when roughly 90,000 people passed through airport security screening each day – about a 97% drop from the same time last year, according to data from the Transportation Security Administration. That number surpassed 400,000 Friday, the first time traveler throughput has hit that mark since mid-March, and on Sunday more than 440,000 passed through security checkpoints – an 84% drop from normal levels.

Americans are also warming back up to the idea of staying in hotels. Hotel occupancy has increased for seven straight weeks, according to data from STR, a hospitality-sector analytics company.

Hotels across the U.S were about 37% full during the week ending May 30, which includes the second half of Memorial Day weekend – a peak travel weekend that kicks off the summer travel season. That rate is up from the abysmal 22% occupancy rates seen during the second week of April but nonetheless represents a 43% decline from the same time last year.

Car travel, too, is on the rise again. Road trips have increased every week since the beginning of April, according to a travel index by Arrivalist that uses GPS data to track road trips where people travel more than 50 miles and spend at least two hours at a destination.

These are "clear indicators that people are ready to get out and not be home," says Jan Freitag, senior vice president of lodging insights at STR.

Though the virus has led an overwhelming majority of Americans to change or cancel their travel plans, the percentage of travelers who say that the virus will greatly affect their travel in the next six months has fallen to 53% from 67% at the beginning of April, a recent survey from Longwoods International shows, and 71% of travelers have plans to travel within the next six months.

It's welcome news for the travel industry, though the incremental gains seen over the last several weeks point to a long and gradual recovery.

"These are the nascent signs of recovery and the green shoots that will continue to grow," Sacks says.

So far, the recovery is playing out in segments just as analysts predicted, Freitag said. The first phase, which the travel economy is currently experiencing, is an increase in "drive-to leisure," where Americans hop in the car and drive to a vacation spot rather than travel by plane to a far-away destination.

Nearly 30% of travelers have changed their plans in the next six months so that they can drive to a destination instead of fly, and the majority of people with travel plans between Memorial Day and the Fourth of July will be driving, the Longwoods International survey found.

Experts expect travel to continue to tick up in the long term, even if a second wave of the virus hits this fall as the weather turns cooler and people relax social distancing. Policymakers will be unwilling to enact lockdown-like measures again even amid a second wave, analysts say, and the travel industry would, therefore, be less likely to see as severe a dip.

But the industry remains in dire straits. The coronavirus pandemic has resulted in the loss of more than $215 billion in the travel economy so far, and analysts predict a drop of $519 billion in spending for the year – more than nine times the decline seen in the wake of the Sept. 11 terrorist attacks. And the leisure and hospitality sector has shed a net of more than 6 million jobs since March.

Analysts at Tourism Economics predict that the travel economy will not return to normal levels until 2023 due to extended fallout from the wider economic crisis sparked by the virus, as well as anxiety over travel that could last until an effective vaccine is produced.

It took two years for the industry to recover after the financial crisis of the late 2000s, Sacks says, and this economic crisis is far more severe. But the industry will recover, just as it has from other steep downturns, he says.

"Every time, travel has rebounded and recovered and moved further ahead," Sacks says.

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