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Booking CEO Says Travel won’t rebound for years, not quarters. Vaccine needed

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Booking Holdings ( Kayak, OpenTable, Agoda, Priceline, etc ) recently had their latest earnings call, and amidst announcing an 84% decline in earnings YoY, Glenn Fogel, Booking CEO, also made a prognostication on the travel industry as a whole. He forecasted that travel is unlikely to bounce back until after a vaccine.  Of course, just because there is a vaccine doesn’t mean you’ll actually be able to get it, and apparently the majority of Americans have expressed doubts as to whether they will want to jab themselves with the fastest ever vaccine produced. Regardless, his forecast is pretty gloomy for those of us who love exploring the world.

You can read the entire transcript here if you like, but this is the portion where he anticipates that travel won’t rebound for years.

We continue to believe that in order to recover to pre-COVID levels, we will need to have a vaccine or effective treatment, which will take time to produce and distribute globally at the scale needed. We are pleased to have recently read news about progress on this front. But we believe it will be years and not quarters before the travel market returns to pre-COVID volumes.

In those countries and regions where shelter-in-place rules were relaxed and economies reopened, we witnessed booking trends improve quickly. We believe part of this initial burst of demand is due to people’s pent-up desire to go somewhere after being in a lockdown situation. It also demonstrates people’s deep desire to travel, providing it to safe.

Let’s juxtapose these comments alongside the comments of the CEO of AirBnb who famously said “travel as we knew it is over.” While Fogel isn’t going that far, he is indicating that their analytics speak to similar trends: people don’t want to go that far from home, and they don’t want to go to city centers.

In line with our growth in domestic travel, we are seeing that bookers are choosing to stay closer to home, and are more interested in less urban areas than pre-COVID.

Time will tell, but I’ve been living in hotels since July 3rd. None of my travel was for “leisure” and all of it was either to stay close to family and I would classify that as “close to home,” or travel to an area that I may move to and tour properties – or close to my future home. I haven’t taken a “vacation.” I’ve been bathing hotel rooms in bleach, using disposable plates, cups, knives, and forks, and if I lived close to family I wouldn’t be doing any of this since it’s a big pain in the butt and I don’t really feel at ease. The trend these CEOs are talking about, I would say I’m a part of, and despite contributing to the bottom line of several hotel chains in the last 30 some days, I don’t see myself taking a “leisure” trip for quite some time.

What do you all think? 

Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.

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4 Comments

  • Jimmy Gottfredson August 7, 2020

    Come on guys, no news here. Return to “normal” travel will be 12 months+ easy, not anything less. If you don’t already understand that you’ve got your head in the sand.

    The real question isn’t when will travel return to 2019 levels, but what travel to do given the current conditions? How to do it safely? Where to go responsibly? How to do it smartly? Those are questions and problems to solve for the next year or two.

  • RMSflies August 7, 2020

    This is all such BS…every week a different expert give a different expert opinion on when travel will be back to normal, or resume to 2019 levels. It’s just pointless to keep posting this stuff. If anything, I’d say that any travel industry executives that have seen their companies decimated want to now make things look even more bleak to facilitate cheap stock buybacks. Travel will return. UAL, DAL, AA, booking.com – they’re not going anywhere so it stands to reason that their operations will re-calibrate and return to previous levels of profitability, Airtlines will probably be more profitable as they cut services in the name of ‘cleanliness’ and quickly remove older, more expensive-to-operate aircraft out of their fleets. They will also get out of massive union obligations. It is in Fogel’s best interest to make the outlook seems worse. There is no downside to him being wrong. Why not just say things will be terrible until 2023? Air travel will become more expensive due to supply and demand issues if things calm down in the next 12 months and levels recover to just half of 2019 the airlines can’t recover their capacity and rebuild their route networks that fast. Too any planes are being taken out of service with no replacements.

  • Ed August 7, 2020

    The three dependencies on travel returning to normal are developing a proven vaccine, broad distribution of the vaccine, and lastly a degree of comfort among the general public that the distributed vaccine was effective. If a vaccine was developed by year end and distribution was accomplished over the course of next year, then general acceptance of results takes place in 2022. Avid travelers will venture out sooner but, in terms of a travel-shy general public returning to pre-pandemic levels, I think it’ll be a couple years.

    • Glenn August 7, 2020

      Besides development of a vaccine and/or effective treatment, one cannot disregard the damage the pandemic has done to the economy and the discretionary spend piggy bank of millions of people worldwide.

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