Does deurbanization forecast a demand drop in international travel

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A bit about me

The first 18 years of my life were divided between two homes.  The first was a simple one story ranch home that backed up to a corn field in Indiana. The 2nd, a result of my dad’s job moving us to Ohio, was within a suburban neighborhood that offered lots along a creek and afforded me nearly 2 acres to explore.  As an only child I was involved in a lot of extra-curricular activities, and I loved having space around me to explore. To this day, I still thrive on a lot of alone time; however, I play well with others ;). I attended small private schools that had immense cultural, religious, and ethnic diversity.  It was very different than many would assume a small town midwest upbringing would provide.  It gave me an intense desire to see the world, learn about other ways of life, and seeded my deep love for travel.

My love for city life

Since then leaving home, I’ve lived in 7 different apartments/condos between St Louis, London, New York, and LA. I’ve never been a home owner, and have largely been a big time city boy. I’ve never had a place over 1300 sq feet, and certainly over the past 5 years have traveled so much that I haven’t wanted for more space. I’ve also loved the accessibility of being right in the action, the ease of getting to the airport, and lack of home maintenance the city life affords. But…things have changed, and so has the industry that brought me to LA: entertainment.

Recently, I’ve been having more and more discussions with actors, managers, agents, casting, etc and the consensus seems to be that the business is pivoting towards being far less centralized. Auditions are now looking as though they will be on tape for quite some time, that pilot season may not ever exist in its old shape, and you can really choose to live anywhere. In fact, I already know a few actors that have left during the pandemic and will just put their auditions on tape. In all honestly…I’m a getting more and more jealous.  I’m especially jealous when I have my weekly zoom call with friends back in the midwest and they enjoy a back yard, fire pits, and space…a lot more space. It’s had me longing for the days of when I grew up.

Urban housing exodus

I’m not alone. In fact, over the last few years I’ve read several articles that focus on the difficulty many baby boomers are having with selling their large, suburban homes as they want to downsize.  The dream of building their dream home had been something that the generations that followed didn’t want to buy into. Gen X, Z, and millenials are looking for smaller, more urban homes many articles contended.  This was illustrated in absolute booms in urban and newly gentrified urban adjacent neighborhoods ( in LA areas like Silver Lake, Echo Park, Highland Park, K-Town have had extraordinary returns in the past 10-15 years ).  However…if you’ve read anything relating to housing in the past few months that trend is quickly changing. Lockdowns and social unrest is leading many to reconsider, but is it for the long haul, or will it simply be temporary?

Deurbanization and travel?

The prospect of deurbanization got me thinking…how will this affect the travel Industry? Over the past few years I’ve never spent more than a few weeks in LA without getting that itch to travel again. Traffic, noise, and the lure of some far flung destination meant I rarely spent more than 4-6 weeks in LA before hopping to Tokyo, London, or Buenos Aires. I always came back because this is where the opportunities in entertainment are based. It really got me thinking…I wonder if living in a densely populated city center encourages more travel?

I stumbled upon a research paper that looked into this very thing. One of their discoveries was this:

3.1.2. International trips included—local urban form measures Both bivariate and multiple regression analyses suggest that people who live in densely built, pedestrian friendly, and centrally located neighborhoods travel more over long-distances than those who live in more suburban locations. The results pertain specifically to air travel

While the paper goes into far greater depth and is worth a read, they ultimately determine that patterns exist, but not enough to causally relate urban life and long distance travel.

Business Travel paralysis

The patterns make sense to me – urban city centers often offer higher paychecks, less space, greater exposure to diversity, access to international flights, etc. It doesn’t surprise me that those in urban areas travel to international destinations more often. So then what happens to international travel if an exodus starts to occur?  Gary Leff said that business travel was dead, and business travel is the backbone of international travel.  I don’t think business travel is dead forever, but it’s going to be on life support for quite some time.

If companies don’t want their employees traveling as much, allow them to work from home, how many will stay in densely populated cities even if there wasn’t a pandemic?  The idea of having a home large enough to have one or even two home offices is quite alluring compared to a jam packed city condo. Especially when those homes may be cheaper. I’d say many would choose the suburban alternative even without a pandemic. Add in the threat of rolling lock downs, crowded elevators, and the idea once this one is over it could happen again – maybe even worse…it isn’t crazy to think this is more than a fad, but a newly forming trend.

Risk Off

The pandemic has stunted international travel, but will that extra space impact the desire to get out and see the world even after it’s over? There will certainly be a psychological hangover, and I’d guess many will think twice.  Plus it’s not over.  Add in the threat of getting sick overseas, quarantines on return, and I would say the more we see people flee cities, the less we will see people traveling internationally.  Living in a densely populated city and traveling internationally both pose a certain risk factor that many have been very keen to bear. The last few months seem to be a move towards risk off.

My thinking is that if the suburban housing trend persists longer than a few months, extends beyond upper middle/upper class families, and it spills into next year, a snowball effect may begin to form.  If the very people that decided living urban areas, and specifically newly gentrified areas decide to leave, it’s leads to a hard hit to the economic viability of those areas. Less jobs means less taxes which means cutbacks.  All of that leads to a decrease in the desirability of those areas to live, but also to visit. This isn’t a topic unique to America either, it’s happening around the globe.

Psychological impetus

Personally, I’m quite keen on the idea of having an American base with space.  Maybe it’s quarantine fatigue, but it is what it is. I’m also in a unique situation where my fiancee films a tv show in London, so we won’t be starving for city life anytime soon, and having a home with a yard would be great. After 4 months of lockdown, a weird switch has occurred. I’m not yearning for a big international trip, but rather to hit the road and see the states. I’ve never had that feeling, and I wonder If I’m not alone. The psychological impact of the Great Depression is written about a lot, and while it’s too soon to draw direct comparisons, I think this pandemic will leave an indelible mark on our psyche

It’s that mark that would motivate the decision to move out of city centers, but also to stay put regarding travel. The more we see a flight to the suburbs, I’d guess the more we will see a drop in demand to go overseas.