- September 9, 2021

Planes, Trains, and Automobiles: Are Consumers Traveling Again for Good?

John Ferguson
John Ferguson
Lead Analyst, Client Insights
Ryan Williams
Ryan Williams
Vice President, Client Insights

The past 19 months have been tumultuous for everyone, including those involved in the travel industry. With national and state governments instituting strong preventative measures to combat the spread of COVID-19, domestic and global travel came to a halt.

However, the rapid development and distribution of multiple vaccinations has partially mitigated the spread and impact of the virus and travelers are again weighing the cost of visiting friends and loved ones after such an extended period apart. As the summer of 2021 approached, the travel sector was starting to move in a positive direction again as the number of fully vaccinated individuals increased and travel restrictions lessened, but how close to “normal” will this industry get back to, and how soon?

As vaccines started rolling out across the U.S. in early January 2021 and ramped up aggressively throughout the first half of the year, the gap between pre- and post-COVID travel in the U.S. started to close. In January 2021 we saw a variance in the volume of people moving through TSA security of 56 percent vs. January 2019. By mid-April 2021, that gap had shrunk to 43 percent. As of mid-August, the gap had declined to just 22 percent. Additionally, seasonality resurfaced during this recovery, as seen in the dips in travelers around the 4th of July. Perhaps a sign that travelers are beginning to behave in ways similar to pre-COVID years despite lower overall travelers on planes.

Volume of Travelers 2019 - 2021

As the travel industry rebounds and the volume of travelers begins to mirror previous years, the individual travel subcategories have benefited. As seen in the chart below, consumer spend on air travel trends strongly with the overall travel industry, while hotel and vacation rentals have recently over-indexed, outperforming both air and car travel in May and June 2021. This suggests that despite how US travelers are getting places, they need accommodations wherever they end up, whether flying or driving. Travelers flocked to accommodation websites and apps early in the booking season before inventory got low. Given the evident long-term impact of vaccines reducing transmission and symptoms, vaccinated travelers likely feel more comfortable staying with other guests at travel destinations, which may speed up the rebound for the hotel and vacation rental portion of the travel sector.

Travel Sector Consumer Spend

Advertising spend prior to the covid pandemic trends closely with consumer spend—2019 being a good example of total travel industry ad spend in relation to consumer spend on travel hovering above a 0.70 correlation coefficient. However, 2020 showed an even stronger correlation, although COVID-19 and the related travel restrictions appeared to have a stronger impact on brand advertising than consumer spending on travel. Looking at 2021 correlation through the first half of the year, we are seeing trends nearly identical to 2020. This could imply that, as restrictions begin to lift and vaccination rates continue to increase, consumer spending and travel-related advertising is returning in lockstep while adapting to continually changing consumer sentiment. Additionally, travel brands may also be exceptionally careful about the money they are putting into advertising, focusing on the most efficient channels possible to mitigate any wasted spend.

Correlation between Travel Brand Ad-spend and Consumer Spending on Like Products

As more travelers are traveling and the industry begins to see increased consumer spending, the outlook seems to be positive. There likely will remain a level of caution and hesitancy for some time going forward, but US travelers seem increasingly excited to travel again, after a year where such travel was significantly curtailed. Additionally, companies in the travel sector can be confident that advertising will likely encourage this positive trend for the industry.

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