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Skift Take
Our improved Travel Health Index shows that pricing rules across all travel sectors. Inflated rates pulled up overall performance, but Omicron impacted new bookings coming in during January.
The travel industry in its prime has a healthy balance between demand and supply, with travel players looking to find that equilibrium between rates for airline seats, hotel rooms or any other travel commodity, and the amount of bookings coming in.
Data from our improved Skift Travel Health Index (formerly the Skift Recovery Index) shows that the industry is far from this equilibrium as it continues to recover from the Covid-19 pandemic.
Pricing Power Boosts Performance
The hotel industry is a case in point. Data from the Index shows that global searches for hotel stays are at only 31 percent of January 2019 levels, while new bookings made in January 2022 for future travel were only half (54 percent) of what was achieved in January 2019.
In contrast, average daily room rates (ADR) were higher in January 2022 than January 2019 for 18 of the 22 countries analyzed, according to data from OTA Insight. Average rates in the U.S. are 25 percent higher now than in January 2019, and 20 percent higher than last year.
The same is happening in the car rental sector, with Expedia Group calling out the strength of the car segment in its recent earnings call. Our Index shows that new bookings coming in during January were only at 28 percent of 2019 levels, data from CarTrawler shows that transaction values for rental cars are up by more than 100 percent in most countries. In Mexico, the overage domestic booker pays almost 5x as much as they would have in January 2019.
Domestic Still Trumps International Demand
While demand remains down, domestic travel bookings continue to far outstrip bookings by international arrivals. In many countries domestic bookings are higher than 2019 levels, making up for some of the weakness in international demand.
In the Travel Health Index we collated search and booking data from Sojern and Hotelbeds to find that demand for in-country hotel stays outperform pre-pandemic levels in many countries, including in the U.S., where domestic hotel demand is up 37 percent compared to January 2019. U.S. hotel demand by inbound travelers, meanwhile, is still 64% below 2019 levels.
Much more analysis of January’s performance is available in our January 2022 Highlights report.
Don’t Miss Out on the New Skift Travel Health Index
The Skift Travel Health Index is a real-time measure of the performance of the travel industry at large, and the core verticals within it. The Index provides the travel industry with a powerful tool for strategic planning, which is of utmost importance as times remain uncertain.
Skift Research launched the Index in May 2020 as the Skift Recovery Index. We are now rebranding the index as the Skift Travel Health Index, to reflect some far-ranging changes: the addition of more data, additional data partners, a new data dashboard, and most importantly, our continued effort to track the industry health beyond the impact of the Covid-19 pandemic.
Skift Research subscribers get access to monthly Highlight reports, as well as our new data dashboard. The dashboard visualizes the Index plus additional data from our partners, so that our readers can extract more relevant data and insights. This is a must-use tool for travel businesses, governments, and DMOs to track those travel sectors and markets that are key to their own success.
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