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Travel executives had grasped that the surprise war in Ukraine dealt Europe an aftershock, interrupting its uplift from the apparent taming of the pandemic. Yet many have sought details on the travel sector’s trajectory.
A clarifying picture of the recovery in bookings surfaced on Thursday at Skift Forum Europe. Attendees at the London event also heard that some travel suppliers, resellers, and destination marketing organizations have become more agile during the past two years — making them better able to respond to volatility.
Skift Research’s Wouter Geerts set the tone for the day while sharing data on the uneven pace of recovery. A spreading performance gap among sectors and markets was clear — which Geerts called “travel’s polarized recovery.”
Bookings remain down relative to the historical pattern, according to January data pulled by Skift Research. In France, future bookings for flights in January were down 57 percent, compared with January 2019. In Germany, future hotel bookings remained down 71 percent versus pre-pandemic. In Italy, future car rental bookings were down 73 percent.
The numbers supported commentary from industry leaders throughout the event.
Bright Spots
Air France saw strong demand for summer travel, said CEO Anne Rigail. So the carrier has been expanding the number of flights it offers, compared with 2019, especially on long-haul routes from Europe that serve North America, Africa, the Caribbean, and the Indian Ocean.
Executives from the giant online travel agencies Airbnb, Booking Holdings, and Expedia Group noted that early trends for advance bookings looked promising.
“UK, France, and Germany were already back to the pre-pandemic trends of a mix of international versus domestic shoppers,” said Ariane Gorin, president of Expedia for Business. “The number of U.S. travelers searching to come to Europe has also gone up, and booking windows are expanding.”
Booking.com has seen double-digit growth in France, the UK, and Germany.
“There’s been a strong trend since January for summer,” said Carlo Olejniczak, vice president and managing director of Europe, Middle East, and Africa for Booking.com.
Tours and activities current and future bookings have surpassed 2019 levels, said Johannes Reck, co-founder and CEO of online travel agency GetYourGuide.
At Airbnb, Christmas period bookings in 2021 were up 40 percent year-over-year, said Amanda Cupples, general manager for Northern Europe.
Infrequent Flyer Club
Many airlines and hotels count on corporations to fill their seats and beds with cross-border business travelers. But the recovery in high-profit business travel has been sluggish.
“Let’s be candid: We stand to lose 20 to 25 percent of international business travel forever,” said Sébastien Bazin, chairman and CEO of Accor Group.
But the travel sector has discovered fresh opportunities, too, such as among the many workers who will remain able to do their jobs remotely at least part of the time post-pandemic.
“Now you have ‘working from anywhere,’” Bazin said. “All these employees would be extremely happy if we were to welcome them — if we can give them a booking engine — to use the premises of our restaurants at our hotels [as working and meeting spaces]. The hotel would be additive to their lifestyle.”
Worker Appreciation Daze
Bazin — whose Accor Group hires thousands of workers a year through a mix of new openings and replacements in a typical cycle — said the hotel sector deserved some of the blame for its labor crisis.
“Those who left the industry had two or three reasons,” Bazin said. “Number one: ‘underpaid.’ Long hours. No [upward] mobility. And no recognition, no ‘thank you.’”
“We hospitality CEOs have been blind in not recognizing the sacrifices, the pay, the challenges, and the lack of mobility,” Bazin said.
“There are still a lot of people who are going to be willing to join the hospitality sector if they can feel they’re going to be moving in their career,” Bazin told the crowd at The Londoner. “So it’s a question of more human resources, more attention, more granularity. And then accept to pay more.”
Destinations Embrace Experimentation
Avoiding overtourism was one of the goals of destination leaders.
Greenland, for instance, is taking a systematic approach to scaling up its inbound visitor numbers, said Visit Greenland CEO Hjörtur Smárason. The semi-autonomous land run by Denmark is building two airports, due to open in 2024. The airports will enable better service for visitors thanks to related infrastructure Greenland is putting into place.
In a silver lining, the pandemic crisis has prompted many stakeholders to cooperate and coordinate more than before.
“We’ve had a policy of co-marketing with regions and private operators for years, but, because of the pandemic, we’ve been discussing all 13 French regions,” said Caroline Leboucher, CEO of Atout France, the national tourism promotion organization. “For the first time ever, last year, we managed to launch a unique campaign in 10 European markets. This year’s version is co-invested, co-marketed, and built entirely together.”
Using Agility to Cope With Volatility
Some hotel companies said they were also finding ways to adapt to changing circumstances.
CitizenM, which will open six properties this year, can be profitable and maintain its growth plans even if international business travel remains 15 percent below 2019 levels this year and next, said CEO Klaas van Lookeren Campagne.
One supporting tactic for CitizenM is making the U.S. — a large domestic market — the biggest part of its owned-and-operated portfolio. Other methods include cost-containment measures, such as using modular, prefabricated construction.
Tour operator giant TUI Group recently turned ramped up its in-house technology spending to speed up its time-to-market for delivering products while subtracting some costs through automation. The group has boosted its number of software engineers from about 100 seven years ago to about 700 now, with plenty of open positions remaining, said Frank Rosenberger, executive board member of IT and future markets.
Some long-term trends have favorable tailwinds for large hotel groups. Over time, more independent hotels in Europe may see an advantage in converting to being flagged under global brands.
“If you fast forward 10 years… and you think about what does the hotel industry like, my view is it’s the hotel brands will gain another 7, 8, or 9 percent market share,” said Richard Clarke, managing director, AB Bernstein. “That has got to weigh on, on on the proposition of the OTAs [online travel agencies].
In the multi-day tour operator segment, digital transformation is expanding the products companies can bring to the market to meet real-time shifts in demand, said Ulla Heffer Böhler, chief operating officer for the Travel Corporation.
Adopting new operational techniques and cooperation with sustainability-focused startups will help airlines cope with the ongoing changes aviation is facing, said Dupsy Abiola, head of global innovation, IAG, the owner of British Airways, Aer Lingus, Iberia, Level, and Vueling.
A Fresh Willingness to Retool and Rebrand
Looking ahead, Europe’s travel leaders will need to be more nimble than ever if the Continent is to reclaim its status as a global tourism powerhouse.
“We need to reposition and reinforce Europe’s image as a world-leading destination, especially in our long-haul markets, such as the Americas and Asia,” said Miguel Sanz, CEO of tourism promotion agency TourSpain/Turespaña.
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