You would be forgiven for thinking that the recent scene of people crowded ever so snugly in Botany Bay (a Kent beach) was a visceral reaction after two months of isolation and confinement. Yet this image of British holidaymaking is as hackneyed as vest marks on peeling lobster skin. It is also a comforting image of normality returning.
However, this normality will be tempered, at least in the short-term, by changing consumer attitudes to travel brands. In a poll by consumer group Which?, of those who have cancelled a trip, 58% are still waiting for a refund. Only 22% said that they trust airlines and holiday companies. These represent the worst scores recorded since Which? began collecting the data seven years ago.
Winning hearts and minds will take time and the travel industry will need to work hard to build trust with consumers to inspire them to travel again. As ever, this represents an opportunity for the best travel brands to stand above the rest. Those that communicate well and deal exceptionally with customer complaints will engender the trust that consumers are looking for.
The more specialist and premium operators that we speak to have done this admirably against a painful backdrop of furloughing and loss of revenue. We have seen incredibly candid letters from founders, such as Jonny Bealby at Wild Frontiers and Radha Vyas at Flash Pack, explaining their position with great humility.
They have offered refunds quickly, alongside vouchers that include generous extra credit and last-minute cancellations. These consumer-friendly policies will continue well into next year. Longer-term, the winners will adapt to the new reality by understanding changing consumer behaviours and mindsets.
There will of course be some travellers that will be harder to convince. If a PR agency ever wanted a challenge, erasing the image of the Diamond Princess cruise ship stranded off the Japanese coast would be one. Until then, cruising will be hit hard as older travellers remain risk-averse. The recent collapse of the Specialist Leisure Group is an early indicator of this.
As Michael O’Leary rages about filling middle seats and countries experiment with quarantining strategies, international travel will be seen with trepidation by many. In our nationwide research, half are changing their international travel plans and four in ten are avoiding air travel altogether. European city breaks will likely take longer to recover due to concerns over crowding, while first world destinations may be more popular as people gravitate towards countries with better healthcare systems.
Places that can be reached by car, ferry or Eurostar will rebound first, similar to what happened after 9/11. In the US, travel website Kayak is seeing huge demand for car rentals. Trivago too is adding more travel inspiration to address the needs of consumers who know they want to travel but don’t necessarily know where or when, focusing on road trips to the mountains or beaches.
As Google searches for international destinations have halved, searches for ‘UK holidays’ have doubled. What Brexit kindled, corona will super-charge. Anyone up for a 300-mile pilgrimage to Barnard Castle?
Cocooning in style
For those concerned about how billionaires are isolating, worry not. There has been a boon in requests from the super-rich searching for Scottish castles, mansions with bunkers, Cotswolds manor houses with moats, uninhabited Caribbean islands to buy and superyachts for a long charter.
For those with smaller budgets, self-contained accommodation is perfect for limited isolation. Demand for self-catering villas and cottages, lodge parks, campervans, and canal boats will remain resilient. Local brands providing more rural getaways, such as Sykes Cottages and Kip Hideaways, are set to take advantage of this, as will European villa brands such as The Thinking Traveller and Oliver’s Travels.
Speaking to founders in this space, bookings are surprisingly buoyant for the peak weeks as holidaymakers are happy to wait and see before cancelling. If anything, many are looking to lengthen their stay from one to two weeks.
Airbnb on the other hand, which is much more reliant on urban stays, will take longer to recover-cancellation rates are close to 90 percent. Over half their listings are from owners with two or more properties, less peer to peer and more rent to rent properties. They will be hit hard and many will likely pull out.
More traditional hotels will have to be smarter in enticing guests back. They may find younger people travelling on their own, couples and parents with teens easier to win back, but even they will expect changes to their experience. Where possible, they will want to have the choice to not interact with people unnecessarily.
As one example, Hilton has reacted quickly. Guests will be able to use their app to manage their entire stay, including controlling the room temperature, lighting and TV as well as ordering from local takeaways, checking out and ordering transfers.
Digital brand building
Although Google searches for international destinations have slumped, many are transferring their trips to 2021 or waiting to book last-minute. Looking for escapism, people at home are still dreaming about their next holiday, albeit more driven by where is safe to travel and where quarantine measures are implemented than ticking off their bucket lists. The trend towards cramming in lots of shorter trips is likely to change to fewer, longer and more expensive trips.
Although spending a lot of money on digital ads is difficult for most (travel spend has plummeted by around 70% with 83% of marketers shelving creative), this is a great time to brand build, engendering trust in consumers for when the time is right to book. The world is at very different stages of opening up, so those that are braver are being clever at targeting spend at specific consumers and regions.
The likes of Expedia have already spent the last year pivoting towards a content-led marketing strategy under the threat of disintermediation by Google, who are going to the hilt in travel. Skyscanner has also been on the front foot despite a huge fall in traffic, diverting its marketing budget towards digital content (see its We Will campaign). Brands are already accentuating those emotive brand messages that they feel will be important post-Covid. These cut across all the consumer areas we look at, including sustainability, wellness, discovery and self-improvement.
However, it’s not just travel companies trying to stay top of mind. Destinations are also using this time to spread awareness and build trust. Cyprus has said that it will pay for travellers’ holiday costs if they are infected with coronavirus after travelling to the country. Sicily is going a step further and offering to subsidise accommodation for prospective visitors.
Famous museum and attractions too are offering digital experiences and engaging new audiences. Google Street View stated that there was a 700% increase in Google searches for virtual tours over the last 60 days. The top five most-searched virtual tours were the Louvre, the Smithsonian, the Museum of Modern Art, Disney and Versailles.
Fliggy, the travel reselling brand of Chinese e-commerce giant Alibaba, has taken this to another level. Since February, it has hosted more than 25,000 travel livestreams to more than 70 million viewers. It now plans to hire travel influencers from more than 30 countries to showcase destinations worldwide with over 100 live-streaming sessions a day.
The growth of these digital experiences will only lead to more people wanting to see the real thing. More than ever, sat at home, consumers are craving new experiences. In our nationwide research, second only to eating out in restaurants, 50% said they would most like to go on holiday when the lockdown is over. And they have money to spend. Leisure spend is the biggest past of consumers’ wallets (around one-tenth) and yet much of it is sitting dormant.
As a sector built on a reliance on consumer confidence, low margins, high people costs and using customer deposits to fuel growth, there will sadly be more casualties. In response, the industry will likely see a swathe of consolidations. Some brands will vertically integrate with DMCs (desination management companies) who provide the experiences on the ground, improving their margins as well as adding value to travellers. Others will broaden their offer by buying up smaller, complimentary businesses.
Those who can ride through this will find, more than ever, consumers wanting to travel with trusted brands who can excite them and keep them safe – even if this means a coach day trip to Botany Bay.
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