Economic recovery is underway but travel and hospitality continue to limp along, with the largest firms in this sector losing hundreds of millions per quarter. But even so, volume and revenues are miles ahead of 2020 levels and so optimism remains high, especially as the busy summer season approaches. Now, these firms will rely on their efficiencies and the foundation of digital experiences to ride out the uncertainty.
- Pent-up demand is driving a rebound. This varies wildly by geography of course, but there are strong signs of life in the US travel industry for example, with leisure “revenge travel” leading the surge.
- Confidence in “survive and thrive” elements is high, but is this realistic? Travel and hospitality firms are clearly more confident with their abilities, ranking themselves higher than the average of the industries across most of the selections of “optimized” and transformative” maturity. The question remains about whether or when consumer demand will return to pre-pandemic levels — but at least the sector feels well prepared.
- These industries have had a year plus to shrink, re-invest and re-invent. We saw many examples of large travel firms using the COVID-19 quiet time to roll out innovation, hence the preparedness. Many firms that have had to furlough and lay off internal staff are relying heavily on partners now to ramp up (and down) functions like customer services where volumes are literally unpredictable.
- Business travel is a wild card timing-wise but is poised for resurgence. Enterprise leaders in travel firms we’ve been speaking to, especially those very reliant on business travel customers, have pivoted rapidly to cater to leisure consumer demand. They remain cautiously optimistic about business travel resuming, remaining prepared for potential surges as vaccination levels rise, particularly after the summer season.
The Bottom Line: Optimism is high in travel and hospitality.
Leaders in the travel and hospitality sectors have hunkered down, relying on a strong foundation of efficiency, internal collaboration, and ecosystem strength. The leaders in these industries are poised to face the unknown demands.
