Surviving the worst year in aviation history is, itself, an accomplishment. According to Delta Airlines CEO Ed Bastian, while pre-COVID volumes and travel practices may never fully return, the road to recovery has begun. The final destination, however, will be different, especially for the big-ticket business class segment.
“All indications are [that] corporate travel is ready to start coming back, and will come back pretty aggressively beginning the second half of this year,” Bastian told analysts and investors after reporting fourth-quarter earnings.
While Delta’s $3.5 billion in revenue last quarter was still “just 30 percent of last year’s levels,” Bastian and other travel industry executives continue to look beyond the pandemic and the slow rollout of the vaccine to plan and prepare for the future.
“Although we still have a tough winter ahead of us, we’re encouraged by the progress that’s been made on the vaccine front and are confident that Delta is positioned to successfully lead our industry into recovery as the year unfolds,” Bastian said, noting that Delta was “a smaller airline with 200 fewer planes” than it used to have.
Bastian’s outlook is partly based on a recent survey of corporate travel clients, which showed 40 percent expected to be fully back to 2019 levels by 2022, and another 11 percent expected to be fully back by 2023. At the same time, just 7 percent of Delta’s large business travel customers said they would never return to pre-COVID levels.
Farm Stays Vs. Times Square
According to Airbnb CEO Brian Chesky, Americans are “yearning to travel,” and have already begun making plans and reservations – albeit in new ways and new places.
“Fifty-four percent of Americans said they either plan to travel in 2021 or they are currently [in the process of] planning,” Chesky told Reuters at a recent industry conference. “What’s going to happen is instead of people traveling only to the top 50 cities in the world – crowding in hotel districts, staying in hotel lobbies, going to see landmarks … many people are going to now travel by car. People will still get back on planes, but they’ll also travel by car. And they’re going to travel to thousands of smaller communities, too.”
For example, instead of trips to marquee destinations, such as Times Square in New York City, Chesky said Airbnb is seeing a lot more demand to visit small, rural places.
“Farm stays are huge now,” he said, “And national parks. There are 400 national parks in the United States, and most Americans have never visited one.”
Chesky said that while business travel dominated the industry before the pandemic in terms of profits at hotels and airlines, the need to physically go places has changed, thanks to the advent of video conferencing services like Zoom.
“So business travel is shifting to leisure travel,” he said. “And people are yearning to see their family and friends.”
Revert Or Adapt
With the pandemic advancing and accelerating so many different lifestyle changes over the past year, experts say the longer people have to get used to their new way of life, the more likely they are to embrace the changes rather than revert to the old.
According to Chekitan Dev, professor of management at Cornell University’s SC Johnson College of Business in the School of Hotel Administration, many of the changes implemented to deal with COVID are likely to outlast the pandemic.
“Businesses are connecting with their customers virtually and leisure travelers are discovering the joys of staying local,” Dev said. “Many business travelers will lower their number of trips, and leisure travelers will shift from ‘hyper-global’ to ‘hyper-local’ travel for the foreseeable future.”
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