Projecting travel trends for a COVID-19 Christmas

As a second COVID-19 surge grabs hold of the U.S. and other regions, travelers remain extremely concerned about their health and safety.

These concerns will hurt the travel industry this Christmas season across the board. Every sector - hotels, airlines, car rentals, etc. - will feel the pinch.

In addition to being health-conscious, the few people who do travel this Christmas season will be more price conscious and impulsive (i.e. more likely to book at the last minute) than ever before.

Trips aren’t being planned months or weeks in advance - they're being planned days in advance. Many travelers are booking seven days prior to their intended travel date and where they're traveling is greatly influenced by a combination of promotions, loyalty, and current COVID infection rates.

This behavior mimics the behavior exhibited by U.S. travelers during both the July Fourth and Labor Day holiday weekends, when 40% of all travelers booked less than seven days before their intended travel date and 65% booked within 14 days.

If this proves to be true, the lead booking time for the 2020 Christmas season will be almost a month shorter than the lead booking time for the 2019 Christmas season.

Here's what else you should know about the upcoming Christmas travel period...

Bookings are tanking

Travel-related bookings (especially hotel bookings) are sliding in an undeniable way. As of this writing, bookings are down for the fourth week in a row by an average of 21.5%

Airports will be ghost towns

Foot traffic is down across all U.S. airports in 2020 by more than 75% and that number won't improve during Christmas.

Some of the biggest airports in the country (including Atlanta, Newark, New York's JFK, Los Angeles, and San Francisco) will see less than 20% of the Christmas foot traffic they saw in 2019.

Hotels are hurting from downward ADR

The lack of demand tied to the recent COVID-19 spike is hammering the average daily rate across the hotel industry (the projected ADR for the Christmas holiday is a mere $88).

If the current decline continues, it will be the largest month-over-month ADR drop since March-April of 2020.

In-person visitation is sinking

In-person visitation is plummeting across the country - a clear sign of decreased travel demand related to the second COVID-19 surge.

Of the 50 U.S. states, 44 are reporting declining visitation, three are reporting no decline (Delaware, New Hampshire and New Jersey), and three are reporting positive visitation (Alaska, Hawaii, and Oklahoma).

Online behavior doesn't bode well for travel

Travel brands are suffering from decreasing web traffic, with visitors decreasing in total volume, time on site and on-site engagement.

Weeklong trips are a non-starter

Even for a big holiday like Thanksgiving, more than 30% of trips were for one night only. The COVID-19 resurgence means extended vacations (i.e. vacations that go longer than one week) are a non-starter this Christmas season.

Aside from the fact that travelers don't want to risk being away from their "home base" any longer than is absolutely necessary, lifestyle restrictions at popular holiday destinations (e.g. ski resorts, beach resorts, etc.) are making travel less appealing to consumers this year.

This runs contrary to what was seen during the first COVID-19 surge back in April, when the percentage of travel bookings lasting more than one week increased across the industry.

Focusing on local travelers will be key

A second COVID-19 surge means long-haul travel will be virtually non-existent this holiday season. What little travel there is will remain ultra-local, and it will require travel brands to maintain a tight, local-feeder market strategy.

What will happen when the holidays are over?

In all honesty, the question isn't what will happen when the holidays are over, the question is, what will happen when the second surge starts to abate and a vaccine is being distributed?

In all likelihood, travelers will behave in a similar fashion to what the industry saw in June and July of 2020. Expect to see a slow and steady increase in bookings and travel reservations starting in February that run through the middle of spring.

Travel-related businesses in some parts of the country—notably the southeast and the southwest—will see their bookings increase earlier than those businesses operating in parts of the country still dealing with inclement weather.

How to recover from the holiday travel downturn?

To recover from a disastrous holiday season, travel businesses will need to incentivize consumers to book.

Messaging should play up promotions (e.g. Alaska Air's BOGO sale), loyalty, increased flexibility (e.g. Princess Cruises' Cruise with Confidence program), and convey a commitment to cleanliness (e.g. Hilton's Digital Key contactless check-in).

Capturing business from last-minute, discretionary travelers, will require getting a clear, 1:1 view of each consumer.

Obtaining such a 1:1 view will provide travel brands with an actionable, real-time understanding of interests, desires, likelihood to take action, and more. Such knowledge makes it easier for travel brands to create compelling marketing experiences that utilize activity across all systems, channels, and devices.