PWC Consumer Markets, April 2021

What will the future look like for travel after the abrupt standstill in early 2020? With vaccinations on the rise and infections on the decline in the US, a growing number of consumers are eager to get away. Many have the financial wherewithal, having been hunkered down at home for much of the past year, with fewer-than-usual opportunities to spend money.

Despite this enthusiasm, many travel companies are struggling to visualize—and shape—the future of travel, recognizing that they need to acknowledge newly formed consumer expectations for trips to the mountains, the beach or the boardroom.

To understand the latest shifts in travel expectations, attitudes and behaviors—as well as the sustainability of those shifts—PwC surveyed more than 1,300 US consumers in April 2021 and compared the results to earlier surveys conducted in April and August of 2020. Most respondents to our latest survey told us they have at least one flight and/or an overnight stay planned for business or leisure within the next 12 months.

1. Pent-up travel demand is bubbling up. Will the bubble burst?

Consumers are on the move again, requiring travel providers to think about how best to balance supply with demand in the wake of nuanced consumer considerations: Despite the propensity for price to dominate travel purchase decisions, consumers also have health and safety concerns.

Higher income households have seen an increase in savings. Combined with increased vaccination rates, this bodes well for travel. In fact, our survey indicates that consumers are willing to spend more money (13%) for nicer accommodations (28%) and for longer periods of time (24%) on future travel. Moreover, with borders starting to open up to vaccinated travelers, more of them are starting to plan international trips: almost 25% are planning trips to Europe or the Caribbean.

Meanwhile, some consumers remain tentative: 24% told us their leisure travel plans won’t match pre-pandemic levels until at least 2023, and 14% plan to spend less on their next vacation than they did before the pandemic.

Cruises are not high on travel lists: 80% said they’re neutral or unlikely to take a cruise in the next 12 months, an increase from both our previous surveys in 2020. Exceptions are 18-to-24-year-old deal-seekers and high-income consumers (household income over $250,000).

Once consumers have satisfied the urge to travel with spring and summer trips, will travel slow down again? Consumers may well base holiday travel decisions on their experiences in the coming months.

Only 3% of consumers who received stimulus checks spent that money on travel; more than half saved their checks to spend later. Of those, only 15% plan to spend it on travel.

Key takeaways

To gain market share by appealing to willing travelers, look to eager-to-travel customer segments, as well as how best to target them. Leveraging the right customer tools and insights platforms can help effectively match demand with media spending to optimize ROI.

2. Public health remains paramount

Safety matters to consumers; they underscored that for us. Our survey found that a clear majority—85%—have either already been vaccinated or plan to be. And 70% favor vaccination verification while traveling.

More than half (56%) support policies that would prevent those without proof of vaccination from traveling. Meanwhile, 14% would be upset if asked for proof of vaccination, creating both opportunities and risks for providers to design future travel experiences around health policies.

In response to consumer public health and safety concerns, travel companies have upgraded safety protocols and infused policies with more flexibility. Many of those changes appear likely to remain in place for the foreseeable future.

Public-health concerns linger:

  • More than half (56%) believe brand-name hotels are safer than short-term rental properties. Only 13% feel short-term rentals are safer alternatives.
  • Almost a third (28%) plan to stay at higher-end properties than they did before the pandemic, associating them with better public health protocols.
  • A third of travelers (36%) are willing to spend more to increase the distance between themselves and others on a flight. On average, they would spend 16% more.

85% of consumers are concerned that current vaccines will not be effective against variants; optimism in travel recovery could be fragile.

Brand trust, always a factor in purchasing decisions, took on outsized importance at the beginning of the pandemic when consumers sought the assurance of cleanliness. By the fall of 2020, price replaced brand trust as the #1 factor, with brand trust a close second—but only for consumers who had actually ventured out to travel. For all others, brand trust still held sway. Today, with more consumers vaccinated and case counts down, traditional purchase drivers have surpassed brand trust, and flexibility seems to be increasing in importance.

Key takeaways

Consumers are still emerging from more than a year of pandemic-related anxiety. Provide more options and greater flexibility for travelers (such as offering flights or communal areas exclusive to vaccinated customers) to help accelerate revenue recovery while also offering safe, meaningful experiences.

3. An enthusiasm gap emerges

By a wide margin, travelers who have taken at least one trip since the onset of the pandemic enthusiastically recommend it to others: More than 70% would recommend flying and more than 60% would recommend overnight stays to those who have not yet traveled. Meanwhile, a small group (10%) of those who have already traveled are unwilling to recommend it to others.

It comes as no surprise, then, that these reluctant travelers rated every type of social gathering as riskier than the travel enthusiasts. They were twice as likely to avoid gatherings of 10 or more people and consistently a year behind the enthusiasts when estimating resumption of pre-pandemic travel habits. A major reason was their first travel experience after the onset of the pandemic; this group was decidedly not any more comfortable traveling after their first flight or overnight stay.

That’s not to say the reluctant travelers won’t catch up soon, now that proven vaccines are available and case counts are down. Those who haven’t traveled at all might well represent even more demand in the months ahead since they’ve been holed up at home for much of the past year.

The best travel ambassadors are those who’ve already taken a trip since the onset of the pandemic: More than 70% of them would recommend flying and more than 60% would recommend overnight stays to those who have not yet traveled.

Key takeaways

Our previous study revealed the importance of the first trip that travelers take after the onset of the pandemic: That first trip alleviated all health concerns for more than 50% of travelers. For many travelers, the first travel experience will determine future patterns, thus amplifying each moment spent engaging with your brand. Empower front-line staff, your most powerful personalization option, to engage with travelers and provide the comfort and reassurance they seek. Employ analytics to uncover and reward customers who are encouraging others to travel.

4. Less-than-eager business travelers begin planning business travel

After a year of remote work and video calls, we expect business travel to make a gradual comeback in the months ahead. However, as business leaders rethink corporate travel policies, the future of business travel remains somewhat amorphous.

Here’s what we do know from our survey: Consumers expect business travel to return sooner rather than later. Some 40% of business travelers believe they will meet or exceed pre-pandemic levels of business travel by the end of 2022, regardless of whether they’ve actually planned their next business trip.

They might well be waiting for final travel-policy guidance from employers and clients. Understandably, travel suppliers are cautiously optimistic. However, the enthusiasm for business travel is lagging: However, business traveler enthusiasm is lagging: 75% of business travelers in our survey are not excited about or are indifferent to traveling again for work.

They may not have a choice: Almost half (46%) are concerned their income or employment could be negatively affected over the next 12 months. Meanwhile, a third of business travelers don’t want to go back into the office, saying they’re happy to work remotely.

Almost half of business travelers (46%) may not have a choice about traveling for work because of concerns that their income or employment could be negatively affected over the next 12 months.

Key takeaways

Connect with the person behind the business travel persona to inspire long-term loyalty. Consumers have already told us they’re not eager to resume business travel, leaving an opening for travel providers to make business travelers as comfortable as possible and keep them coming back. Personalize the travel experience to provide the right combination of rest and adventure that each business traveler seeks. A genuine demonstration of empathy for business travelers can create a loyal, long-lasting customer relationship.

5. Brand loyalty still up for grabs

While consumers are eager to travel, they may not go back to their pre-pandemic providers. When we surveyed consumers last summer, some 40% told us they would likely switch loyalties. That trend is now taking root: One in three travelers followed through when it came to trying a brand other than the one currently holding their highest loyalty program status. 85% of them told us they’re likely to stay with the airline they switched to while 76% said the same about hotels.

Why are these travelers switching brands? 60% of respondents said the most important reason is better pricing, offers or packages.

The data tell a different—and more nuanced—story for top-tier members of loyalty programs:

  • Almost half (46%) of top-tier members say loyalty programs are even more important now than they were before the pandemic—more so by far than all membership tiers.
  • Highest-tier loyalty members are also the most likely to switch brands, a trend we first saw in the last installment of our survey. In fact, our current survey revealed that they are all open to switching.
  • Contrary to the general traveling public, the highest-tiered loyalty members are switching for other noteworthy reasons, the greatest of which is the opportunity to experience a new brand, their benefits, and experiences.

For loyalty program managers, there is some good news. Loyalty balances have been growing over the past year, with 30% of members planning to redeem those balances on imminent future travel. Some 20% plan to continue saving points or miles to redeem for greater travel rewards later. Meanwhile, roughly a third (30%) say their points don’t provide the appropriate value to redeem at this time and 20% plan to redeem points for non-travel items or transfer them to a partner.

Highest-tier loyalty members say loyalty is more important now than pre-pandemic. They are also more likely to switch brand loyalties than lower-tier loyalty-program members.

Key takeaways

The opportunity exists: Protect valued loyalty members and entice others away from competing brands. Consumers have told us in no uncertain terms what matters most to them—price. But that’s not all. They also want flexibility and new experiences after a year of having had their lives upended. While revenue recovery has been top of mind for travel brands during post-pandemic recovery, a more robust revenue opportunity lies ahead.

Travelers on the move bring new opportunities

For the first time in more than a year, travel providers see bright days ahead. With vaccinated populations trending up and case counts trending down in the US, all signs point to travelers on the move.

Airlines and hotels have a renewed opportunity to welcome back old customers and wow new ones with personalized service, cementing long-term bonds with attractive loyalty programs.

For starters, understand newly formed consumer expectations and be willing to think beyond pre-pandemic business practices to create innovative, safe and meaningful experiences for all travelers.