New Study: Leisure travellers will return to the market in 2021, but the travel industry will have to be patient
While a majority of consumers plan to maintain their pre-pandemic travel budgets, an emerging segment of “revenge travellers” plan to spend even more on travel once they are free to do so
[London, United Kingdom], [February 02, 2021] The Travel Trends 2021 Study* conducted by Simon-Kucher & Partners, a global strategy and marketing consulting firm, and ROIRocket, a leading provider of research services, revealed that travel is set to rebound later this year with the majority of leisure travellers (57 percent) expecting to travel again in 2021, primarily during the second half of the year. Among the remaining consumers, insecurity prevails: one in four does not know when they will travel again. The study, based on a representative sample of more than 3,900 individuals across five countries (Germany, France, Spain, the United Kingdom, and the United States) during December 2020, suggests that a crucial factor in travellers’ decisions on when to take their next trip is not only the lift of restrictions (30 percent) but also on the COVID-19 vaccine: 30 percent want to travel when they or the majority of the public is vaccinated.
Majority of British travellers maintain travel budgets – Income and employment uncertainty as main driver for travel budget decreases
Study results show that 74 percent of British travellers will spend the same or more on travel in 2021 than they did before the pandemic, indicating pent-up demand. Only 26 percent will spend less on travel after the COVID-19 crisis, showing a more promising picture than the global trend at 30 percent.
Out of these British travellers with decreased travel budgets, 53 percent indicated that uncertainty around employment status and income is the primary reason for the cutbacks on spending, while only 12 percent say that they have taken up new activities instead. These numbers show that there is no fundamental shift away from travel, but that the decline is rather temporary due to limited or uncertain disposable income.
An impressive 60 percent of British respondents indicated that they don’t expect any change from their pre-pandemic travel budgets – this number matches the cross-national average at 60 percent.
Dimitris Hiotis, Head of Simon-Kucher’s Competence Center for Leisure, Travel and Transportation comments, “The pandemic has impacted the travel industry in an unprecedented way. Our insights suggest that 2021 will be the year that travel rebounds, especially in the 2nd half of the year, with the majority of consumers wanting to travel and spend the same or even more than before the pandemic. My advice for travel and tourism companies at this point is, to set out their commercial strategy and model to be agile enough to respond to the travel rebound as lockdowns are eased and a significant size of the population is inoculated.”
“Revenge travellers” plan to spend even more on leisure trips after the coronavirus crisis
The “revenge travel” trend has already been observed in Asia, where virus-related restrictions have started to be lifted. An example is China: according to Bloomberg, during the Golden Week Holiday in October 2020 holiday travel has returned to more than 80 percent of the pre-pandemic levels in 2019 – a promising recovery in light of the current situation.
Across all consumers surveyed, approximately 10 percent currently fall into this segment of revenge travellers, and that number could grow.
From this segment, travel companies can expect more bookings – but also an increase in length of stay: In the UK, 57 percent of revenge travellers plan one larger trip, while 43 percent plan smaller, more frequent trips. British revenge travellers are willing to spend more on accommodation, transportation and F&B when they start travelling again, a good sign for hospitality players like hoteliers and restaurant owners.
Even in a post-pandemic world, traveller behaviour will be significantly different, with staycations being a big winner
For much of 2020, many people traveled closer to home, if at all – this staycation trend will not be going away. 66 percent of British respondents’ holiday plans have been effected by COVID-19, with 21 percent of those choosing to travel more domestically as a result of the virus. For those who are thinking of travelling internationally, more than half said that their choice would be directed by government advice, with older travellers timing their holidays based on vaccination status and younger customers being more concerned with quarantine times and travel restrictions.
Travellers will increasingly opt for private transportation (34 percent of British respondents), at the expense of a drop in air travel (41 percent of British respondents) and trains (39 percent of British respondents). The cruise industry faces decreased demand from Brits with 48 percent stating they will go on fewer cruises than before COVID-19.
Booking behaviour will also have seen lasting impacts: On the one hand, 58 percent of British travellers surveyed plan to book more last minute because of insecurities (compared to a cross-national trend of 51 percent). On the other hand, also 46 percent plan to book earlier to benefit from price advantages (47 percent cross-nationally). This split in tendency fits with the fact that 77 percent of British travellers expect promotions and discounts after the pandemic to boost demand, matching cross-national expectations at 75 percent. Package holidays increase in popularity among younger consumers (56 percent of consumers under the age of 35), though they remain a less preferred option compared to piece-wise booking. According to Rosalind Hunter, Partner in Simon-Kucher’s London office and member of the Travel and Transportation Practice, “One of the key changes in customer behaviour the pandemic has triggered is on booking behaviour. As our research has suggested, consumers are yearning to go on holiday, but they are not sure about their travel plans as the pandemic drama unfolds. Travel companies need to offer good incentives and offer structures that entice early booking, but at the same time offer the guarantee that if plans change, people can get their money back or change their booking. This will enable them to appeal to the pent-up demand of revenge travellers, while offer peace of mind to consumers by offering booking flexibility.”
Full study report available upon request
*About the study: The Travel Trends 2021 study was conducted by Simon-Kucher & Partners and ROIRocket in December 2020. More than 3,900 people across France, Germany, Spain, the United Kingdom, and the United States were surveyed about their travel and booking behaviours for 2021.
Simon-Kucher & Partners, Strategy & Marketing Consultants:
Simon-Kucher & Partners is a global consulting firm with more than 1,400 professionals in 39 offices worldwide focusing on TopLine Power®. Founded in 1985, the company has 35 years of experience providing strategy and marketing consulting and is regarded as the world’s leading pricing advisor.
ROIRocket is a leading provider of full-service research, fulfillment, and digital and direct marketing support to a broad client base of consultants, investors, publicly and privately held corporations, agencies, and market research firms. For details, visit www.roirocket.com