Travel analysts across the world are attempting to understand the massive changes the industry will undergo in the wake of the coronavirus pandemic. Millions of flights have been cancelled across the world's now-empty airports, group meetings and corporate events have moved online, and hotels are struggling to fill their rooms.
We've analyzed several aspects of post-COVID-19 travel, including organizing the transition to virtual programming, traveler safety, and the current, disrupted hotel RFP season.
The future of industry pricing is one of the most important details of this new landscaping, but it's also one of the hardest to predict. Hotel and airline rate changes are likely at the top of forward-thinking industry members' list of price concerns.
Atlantic Monthly travel correspondent James Fallows reported that April 2020 travel bookings were down 98 percent from last year. The average domestic flight had approximately 12.5 passengers on board. These current conditions -- a mass reduction in flights and in the number of passengers on the few that remain operational -- have caused most current ticket prices to remain stable or increase. Spirit Airlines found success through low ticket prices in early March, but can no longer count on massive discounts to fill its flights, according to Skift.
An almost non-existent demand for leisure travel have made rate cuts scarce. Until that demand returns, rates are unlikely to change.
"When can passengers start expecting lower fares? According to several analysts, not until demand for air travel starts to go up again—and price competition once again becomes a factor in people’s decisions on whether to fly," Fallows writes.
As localities across the world reopen, airfares are expected to decrease in order to encourage travel though most markets have experienced a pricing drop. Skift reports that some flights, especially domestic flights, will continue to be discounted. Flight discounts may also continue because of low oil prices.
Hotels face a slightly different challenge in dealing with the effects of the pandemic, with many smaller chains and properties struggling to remain afloat. Several analysts have advised owners and companies to avoid rate cuts and keep prices stagnant, to not "rush to cut too deeply or too quickly" according to Skift.
In order to avoid large rate cuts, some hoteliers are reportedly offering "value-add" amenities, some related to safety and sanitation, in order to attract guests. Those guests who continue to book rooms are either traveling for urgent reasons or planning for an eventual scaling-back of travel restrictions with the assurance of a full refund.
The industry's rate forecasts remain muddled, especially in the hotel sphere where the return of demand may not be as immediate as that of air travel. World Travel, Inc. has developed a solution that ensures clients are booking the lowest logical hotel rate despite volatile rates and pricing strategies.
World Travel's Hotel Shopping Bot audits bookings daily using TRIPBAM analytics to ensure that travelers have chosen the lowest logical rate. No traveler intervention is required in the process, and the system only selects alternate rooms from the same hotel, same amenity package, and same or better room type.
Travelers are immediately notified of rebookings and changes in their itinerary, while the client earns 60% of the savings achieved through the system. 21 World Travel clients are currently generating savings with the help of the Hotel Shopping Bot.
Despite the volatility surrounding travel pricing in a post-pandemic world, an increased client and traveler focus on low cost is certain. The Hotel Shopping Bot leverages these changing rates to help clients create savings that will be more important than ever before. The system also prioritizes safety and duty of care concerns, allowing travelers to view hotel occupancy and possible risks before departing.
Price and rate fluctuation has created major disruptions in the travel industry, and its effects are likely to be felt for years to come. Companies and travelers must rely on extensive audits, industry data analysis, and prioritized safety concerns to meet this new problem head-on and generate the savings that will be increasingly necessary in a post-pandemic world.