It was always going to happen but after just one week of relatively little change in global airline capacity if feels like a trick is being played on the industry with the arrival of variant Omicron just before the year-end holidays. Stock markets panicked, airline shares plummeted, regulators applied new travel restrictions and airlines shrugged their shoulders and said, “here we go again”. Both as an industry and from the wider health perspective we are so much better placed to deal with another Covid variant but that doesn’t stop speculation
The overnight news of a possible new variant of concern emerging in Africa is clearly something that the aviation industry needs to be aware of. But, as famously said by Corporal Jones in _Dad’s Army_, a great TV comedy, “Don’t Panic”. Airline stock prices have taken a dive this morning, but perhaps that is an overreaction, and if we put the whole situation into context then this is perhaps just one more bump in the road to recovery that we expected, so what is that context?
The great aviation recovery is underway, or more precisely - airline capacity is rebuilding in many parts of the world, airline schedules are more stable than they have been all year, and if you are double vaccinated (and able to work out the paper trail of requirements) you can travel freely to most parts of the world. However, you are still unable to travel everywhere and, in a throwback to the mid-nineteenth century, there are markets that remain firmly shut for nearly all international travel and that is not good news for the airline industry.
The ForwardKeys team of travel experts have been closely monitoring the winds of change in the travel sector since the pandemic unleased, and up until recently, the air ticketing data was showing the Americas, especially the Caribbean, as the sole game changers when it comes to real-time travel recovery. However, Africa and the Middle East are also proving to be much more resilient. While the total global inbound figure for international arrivals as of October 2021 sits at -77%, for Africa and the Middle East this figure is at – 68%.
If last week was busy with IATA Slot, the Dubai Air Show and new aircraft orders, then this week is as flat as a pancake! Either nothing is happening, or everyone is taking a deserved break after the frantic activity of last week. In truth, it may just be this time of the year - pre-Thanksgiving, Winter ski season yet to start, and everyone saving their holidays for Xmas… we need the corporate traveller to return, any sightings anywhere?
STR’s latest 51-chart map shows a variety of recent national/regional trends as well as the general pace of the industry’s continued recovery. For the four weeks ending with 13 November 2021, more states closed the gap or exceeded their 2019 levels in revenue per available room (RevPAR) on a total-room-inventory (TRI) basis. Keystone markets, however, remain persistent holdouts toward further national recovery. Higher-than-expected average daily rate (ADR) along with strong weekend demand continue to underpin recovery.
The U.S. hotel industry saw its largest week-over-week demand gain since early October with 704,000 more room nights sold for the week ending 13 November 2021. Weekly demand has increased in 21 of the past 33 weeks and the most recent week’s gain was the 10th largest in that span. With the increase, occupancy advanced to 61.6%, up 1.9 percentage points from the previous week. Compared with 2019, occupancy indexed at 96, which was the highest level since early July. Average daily rate (ADR) also improved, up 1.3% week on week, to a level that was three percent higher than what it was in 2019.
‘Tis the time to give thanks in the USA and it appears sunny destinations both domestic and international are set to record growth on pre-pandemic US visitor numbers for the traditional exchange of turkey and well wishes. Travel analytics company ForwardKeys reveal the latest air ticketing data and trends placing Florida and El Salvador high on the travel agenda this Thanksgiving.
The US borders finally opened on November 8. Did that result in a material influx of tourists that will help increase hotel and retail traffic? Not yet... Let's review 5 airports that showcase both domestic and international travel: LAX and ORD (Chicago O'Hare) that capture international visitors from the Asia-Pacific region, and JFK and EWR (Newark) that capture traffic from Europe; plus LGA (LaGuardia) which has mostly domestic traffic for comparison.
The hotel industry rebounded slightly after two weeks of declines, gaining nearly a percentage point in occupancy during the week ending 6 November. The uptick was expected given that history shows a similar pattern after a Halloween Sunday. Of course, due to Halloween, Sunday demand was down significantly with decreases also seen on Monday, Tuesday and Wednesday. Week over week, average daily rate (ADR) was nearly flat (+0.2%) and revenue per available room (RevPAR) increased 1.8%.
US Airlines have a major role to play at Thanksgiving transporting literally millions of travelers across the country to reconnect with families and friends at one of the most important times of the year. 2020 was, despite the best intentions of everyone, not a good year for travel and many would-be travelers were advised to stay at home. Fortunately, 2021 is shaping up to be very different as airlines are ramping up for a busy week. It could even be better than 2019 for some!
During “normal” years, hotel development delays are common due to construction problems, permit issues, or some other minor situation solved by bumping an opening date. In these “pandemic years,” plenty of opening delays have also come from hotels unwilling or unable to operate amid lockdown restrictions or find adequate staffing to service a property during its ramp-up. Those types of delays, along with limited cancellations of planned projects, have contributed to Europe’s hotel pipeline reaching historic highs for the next three years.
After more than 200 days the world’s most lucrative international market reopens, with full access for travellers flying between the United States and its major trading partners in Europe finally open. It may be symbolic of the industry in recovery and indeed many airline CEO’s are today flying in one direction or the other seeking valuable soundbites in this week’s press. More importantly, in November and December 2019, revenues of some US$2.8 billion were generated and every airline will be hoping that the pent-up demand generates that type of cash straight away. If only...
U.S. hotel performance for 24-30 October was neither a trick or treat as occupancy dropped to a 25-week low of 58.9% after coming in at 63.9% in the prior week. The decrease was anticipated due to Halloween, which always negatively impacts demand. The decline was most pronounced on the weekend, given that the holiday was on Sunday. Weekend occupancy tumbled down by 10 percentage points week on week versus three percentage points during the remaining days.
As the IATA Winter Season starts there is plenty of good news around the globe with markets reopening and new air services being launched in many markets. All of this is great news for the Australian cricket team who seem on their way home from the UAE this week with nationals once again allowed to travel overseas; there is no truth that they will have a personal butler for their trip home, they had that on Saturday!
For the week ending 23 October, U.S. hotel occupancy tumbled slightly to 63.9% from 65.0% in the previous week. The decline was driven mostly by a weaker Sunday, down five percentage points week on week, after Sunday had driven the previous week’s performance due to the Columbus Day holiday. The weekend was also soft, falling two percentage points after dropping one percentage point in the previous week. There is good news, however. Monday through Thursday occupancy improved for a third consecutive week, which we believe is a result of rising business travel.
STR’s latest 51-chart map shows a variety of recent national/regional trends as well as the general pace of the industry’s continued recovery. During the early weeks of autumn, revenue per available room (RevPAR) on a total-room-inventory (TRI) basis looked like 2019 for more markets. For the four weeks ending 16 October, 18 states outperformed their comparable 2019 RevPAR. That number was down from 21 states last month, but if we widen to “close misses” (i.e., an index score of 90 or higher), 37 states showed at least respectable returns toward their normal RevPAR.
New research from ForwardKeys reveals that flight bookings to the USA have soared following two announcements that the destination would reopen to vaccinated foreign travellers in November. By mid-October, weekly bookings exceeded 70% of pre-pandemic levels. The first announcement was made on 20th September, when the White House said that visitors from the United Kingdom, Ireland, the 26 Schengen countries, China, India, South Africa, Iran and Brazil would be allowed to enter the USA, without being subject to quarantine, provided they were fully vaccinated.
The Columbus Day holiday propelled U.S. occupancy to 65.0% for the week ending 16 October. That level was the country’s highest since mid-August and surpassed the levels seen during the weeks of Memorial Day and Labor Day. This was also the 11th week since June that occupancy reached or surpassed 65%. The week-on-week gain in demand came almost entirely from Sunday with other weekdays providing much less improvement.
Through a long and patient period of attempting to stamp out COVID-19 outbreaks dating back to March 2020, China has seen its domestic airline capacity rise consistently, with only a few short-lived dips. The major dip was seen last February and followed by another in August. By March of 2021, the country had exceeded pre-pandemic domestic airline capacity and was flying at more than 20% above 2019 airline capacity levels through the summer.