Atlanta Financial Newsroom

Where Does the Travel Industry Stand as Summer 2021 Kicks Off?

Mariana Battista, CFP®
June 22, 2021

The travel industry has begun to see growing demand as we move closer to summer. However, not all travel will be the same, as much of the demand is directly related to the COVID-19 vaccine and reduced CDC restrictions. Instead, industry trends have emerged based on individual comfort levels as they apply to different modes of travel.
Below we will explore some of the factors that have contributed to an increase in travel and how different industries are responding to it.
COVID-19 Vaccine and Traveler Comfort
The trends that impact individual willingness to travel can be directly tied to two factors. First is the administration of the COVID-19 vaccine. In fact, according to the CDC, approximately 39 percent of the U.S. population was fully vaccinated as of May 2021.1 Second is the CDC’s reduced travel restrictions within the United States for those who are fully vaccinated.2
Both of these factors inform the types of travel people are willing to take. According to a study from Deloitte, 54 percent of travelers are comfortable staying in a hotel, compared to 44 percent taking a flight or 35 percent attending an in-person event.3
With this in mind, let’s examine some of the impacts these trends have had on specific sectors of the travel industry.
Airlines
Since the new year, interest and comfort in flying have steadily increased from 29 percent to 44 percent of individuals.3 Furthermore, the number of individuals passing through TSA has gone up significantly, from around 100 thousand people a day in April 2020 to over a million people a day in April 2021.4
Comfort and the increased number of travelers have also affected the way airlines are beginning to respond. For example, Delta Airlines stopped blocking off the middle seat of their flights at the beginning of May 2021.5
Though this information shows a growing level of comfortability in airline travel, it must be compared to previous years to help gauge where the industry is at. For example, over 2 million people passed through TSA a day in 2019.4
Another big difference to consider is domestic versus international travel. As of April 2021, 36 percent of individuals plan to fly domestic, while only 21 percent plan to fly internationally.3 This, along with the data above, indicates that individuals are becoming more accustomed to the idea of flying, but would be more comfortable with a flight within the United States.
Car Rentals
Avoiding large crowds and staying isolated makes a road trip an ideal alternative. However, individuals may find this difficult or more expensive than expected. Some car rental companies sold portions of their fleets in response to economic challenges created by COVID-19.6 Furthermore, the Bureau of Labor Statistics reported a 16.2 percent increase in car and truck rental costs for April 2021.7 Rental cars are an in-demand item, and you should be prepared to pay a premium on them this year.
However, this does not mean that road trips are out of the question. Around 49 percent of individuals plan to book a hotel in the next three months.3
Cruises
Cruises remain the least likely to see improvement during summer. Not unsurprisingly, only 19 percent of individuals plan to take a cruise in the next three months.3 This, coupled with the challenges of 2020, means the cruise industry may continue to face economic difficulties throughout the remainder of 2021.
The travel industry is recovering from the economic downturn of 2020. And though the industry is experiencing growing demand as we near a post-pandemic world, it is nothing close to what it was in 2019 and prior years. Those planning to travel should remain up-to-date on guidance from the CDC and review the U.S. Department of State’s information and travel restrictions before finalizing their plans.
The growing demand for travel will impact the prices of everything from plane tickets to car rentals and hotel stays. The exact amount will depend on the location and time of your trip.
With a seeming light at the end of the tunnel, now is a great time to reach out to your Mercer financial advisor to readjust your budget accordingly. Should you or anyone in your network need a second opinion, please don’t hesitate to reach out to me at [email protected] or at 349-678-9140. Safe travels ahead!
1. https://covid.cdc.gov/covid-data-tracker/#vaccinations
2. https://www.cdc.gov/media/releases/2021/p0402-travel-guidance-vaccinated-people.html
3. https://www2.deloitte.com/us/en/insights/industry/retail-distribution/consumer-behavior-trends-state-of-the-consumer-tracker.html
4. https://www.tsa.gov/coronavirus/passenger-throughput?fbclid=IwAR0UYTPixmae_B7hOOIcBBWfGvURPHd9NeMbEHvet5qFW6HfUpil5x1XcuQ
5. https://www.delta.com/us/en/travel-planning-center/coronavirus-faqs
6. https://www.usatoday.com/story/money/cars/2020/06/13/hertz-used-car-sales-deals-bankruptcy-coronavirus/3182105001/
7. https://www.bls.gov/news.release/cpi.nr0.htm
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.
Please Note: Atlanta Financial is a tradename. All services provided by Atlanta Financial investment professionals are provided in their individual capacities as investment adviser representatives of Mercer Global Advisors Inc. (“Mercer Advisors”), an SEC-registered investment adviser principally located in Denver, Colorado, with various branch offices throughout the United States doing business under different tradenames, including Atlanta Financial.

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Below we will explore some of the factors that have contributed to an increase in travel and how different industries are responding to it.

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