A Travel Industry Pandemic Rebound Report Card

Americans are ready to travel. I know Janet and I certainly are. As I put the finishing touches on this post, we are ready for our first trip outside of the country in over a year. Much has changed since then, but as our trip to California last month showed, much about travel is the same. With masks and social isolation increasingly becoming a distant bad memory, more of you are probably ready to travel as well. But is the travel industry ready for you? Here is my report card on how well prepared different segments of the travel industry are, or are not, to meet this summer’s busy travel season.

Air Travel: F
I hate to start with such a downer but…flying is usually the biggest downer when it comes to travel so why not get it out of the way up front? Of all segments in the travel industry, airlines have handled the resurgence in travel demand the worst. They have taken the most shortsighted approach to adjusting their operations, and now we the travelers are paying the price. Just look at the thousands of flight cancellations announced over the past two weeks, many reaching well into July. You can’t blame that on weather, though the airlines surely tried.

For much of the pandemic, airlines were allowed to continue flying with virtually no government enforced restrictions other than the mask mandate. To top it off, the airline industry received more COVID federal assistance funding than any other segment of the travel industry, to the tune of $25 billion dollars. Much of that federal funding came in the form of forgivable loans and grants, aka money that came out of your pocket and mine which the airlines get to keep. And still they are poorly postured to handle the demand facing them for this summer vacation season. For this and oh so many other reasons, the air segment of the travel industry gets an “F” from me. Now if you’ll excuse me, I need to find a hotel for the extra night American Airlines just added to my trip by cancelling my return flight. I’m not even kidding.

Rental Cars: D
Rental car companies were only slightly better prepared than the airlines for the resurgence in travel demand heading into this summer season. As airlines were furloughing staff and retiring or mothballing airplanes, rental car companies were making the same short-sighted mistakes. Early in the pandemic they began selling off their car inventory to bring in cash. Now that the demand is back rental car companies have been slow to rebuild their fleets, in part because of COVID related supply chain disruptions involving car manufacturers, but mostly because they didn’t think things through.

Low supply hasn’t stopped rental car companies from overbooking and overcharging in response to high demand. You may not have a choice when it comes to flying to your destination, but you certainly do when it comes to driving. This is the summer to explore Amtrak and Uber. It’s a “D” from me for the rental car companies.

Cruise Lines: B minus
People fly because they have to. They cruise because they want to, and the challenge facing the cruise lines was to keep people wanting to cruise while at the same time keeping them safe in the face of this unprecedented pandemic. While the airlines and rental car companies were taking a decidedly tactical approach to their decision making, the cruise lines had no choice but to think and plan strategically.

All the major cruise lines are incorporated outside of the U.S., which means none of them were able to take advantage of the federal COVID assistance money Congress earmarked for the travel industry. From the outset of the pandemic, each cruise line arranged sufficient lines of credit to meet their cash flow needs for 12-18 months with no incoming revenue. At the time 18-months was considered laughably conservative. In hindsight it was prescient. In fact, while the CDC allowed airlines to continue operating revenue-generating flights throughout the pandemic, they held cruise lines in a vise grip, keeping them shut down for 15 solid months.

I’ve written extensively about my feeling that the CDC exceeded their statutory authority by prohibiting cruise ships from sailing for as long as they did. In that sense and others, the CDC singled out the cruise industry for unfairly harsh treatment. A federal judge agreed with that assessment and recently overturned the “return to sail order” which was in practice a de-facto extension of their no sail order originally issued back in March, 2020. In doing so, the judge noted the CDC’s action against the cruise industry was “breathtaking, unprecedented, and acutely and singularly authoritarian.” Pretty much the same things I said about them last October.

With the CDC finally having approved the first cruise ship to carry paying passengers, and that ship set to depart from Florida in a few days, the cruise industry is well positioned to meet the demand facing them. The cruise lines used their down time to develop well thought out plans for safely returning to normal sailing operations, and it is those plans they are now implementing. Though COVID is still with us, and likely will be for the foreseeable future, the cruise lines alone in the travel industry are addressing it with something more substantive than wishful thinking and hygiene theater.

As well as the cruise lines have handled themselves, they don’t get a pass from me. The cruise industry has made a few missteps in their desire to return to sailing quickly, but nothing on par with what the airlines and rental car companies are foisting on their customers. Overall, I give the cruise industry a “B minus” mainly because of the few unforced errors they made in their return to sailing.

Hotels and Resorts: B
Perhaps the least impacted segment of the travel industry were hotels and resorts. That’s not to say they weren’t impacted at all. They were, but the hotel and resort industry have a built-in ability to flex and they used that to handle the ebb and resurgence in travel demand smoothly. Resorts in Mexico began to reopen in June of 2020, just a few months after being closed, albeit at reduced capacity. In spite of surging rates of COVID-19 throughout Mexico in 2020, the government was pretty successful at managing the major resorts in Cancun and Cozumel as COVID free bubbles. Disney World in Orlando began a gradual reopening a month later, in July and the rest of the Orlando based theme parks and resorts followed closely. Fill rates were low initially but quickly recovered, yet there were no reports of widespread COVID outbreaks so clearly they were doing something right.

Hotels and resorts, for the most part, followed CDC and WHO guidelines when it came to COVID protections, and they continue to do so. Masks were required throughout the properties except in private rooms and when eating or drinking. Social distancing was embraced and enforced. Pools and exercise facilities were closed and amenities such as free breakfast buffets were eliminated completely, and then brought back with more sensible approaches like prepackaged grab and go food. As more of the country gets vaccinated and COVID rates fall to new lows, hotel and resorts continue to adjust their COVID policies. Mask mandates are being relaxed and social distancing has been all but abandoned particularly in the outdoor areas.

Hotels and resorts aren’t immune from staffing shortages, and service is the one area they fall consistently short, even when compared with their pre-pandemic performance. The hospitality industry has been able to embrace technology in a way the rest of the travel industry can’t, but that doesn’t excuse them from tolerating staff members who leave guests feeling like the hotel is doing them a favor by allowing them to stay. Because of what I found to be an occasionally snotty service attitude, they get a “B” from me. With a little bit of attention to detail and common courtesy from staffs, the hotel and resort segment could easily have rated an “A” overall.

Trains: A minus
I am not usually a fan of Amtrak. They simply don’t compare with rail services throughout much of Europe and Asia. That said, they did what they needed to do to keep running as safely as possible throughout the pandemic. They reduced passenger capacity, enforced masking and social distancing restrictions, limited checked bag and baggage handling, limited services and amenities aboard their trains, adopted enhanced sanitization protocols, and adopted touchless customer interactions in their stations and aboard their trains. Amtrak adjusted schedules, dropping trains to meet significantly reduced capacity and limited the operating hours of their stations. Once travel demand began to rebound and the prevalence of new COVID cases fell, Amtrak resumed booking trains to capacity though they delayed resumption of services citing federal regulations. Overall I can’t think of much more I would have expected from Amtrak, so they get an “A minus” from me. The minus comes from their continuation of hygiene theater long past the time it was required.

Summary

The COVID pandemic continues to impact the global travel industry unevenly. As good as things are in this country, the tourism industries throughout Europe and other parts of the world are just beginning to recover. Even within this country that recovery is uneven and subject to backsliding, particularly in areas where vaccination rates remain low. I’ll pass on addreesing the question of the role vaccinations could and should play in enabling more unrestricted international travel. For now, I am fully vaccinated, and I am happy to be able to resume travel. I just wish the airlines would get their act together.

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