A look at travel issues over the next 12-24 months

Mandatory physical distancing measures, temperature checks and filling out medical history questionnaires prior to airplane flights, possible Covid-19 testing before boarding, limited or non-existent meal and beverage service on airlines, no more free hot breakfasts at hotels, restaurants allowed to use only 25-50% of their seats, mandatory face mask wearing at all times … and higher prices. Airlines can not keep flying idled seats – someone has to pay for it.. Hotels, restaurants and car rental agencies will have to charge more to fewer customers in order to cover their fixed costs.

Source: What travel will look like for the next year or two – SFGate

What does this mean for travel? It means recreational travel will be limited until a vaccine is widely distributed and people have confidence in its effectiveness. Many will choose to avoid the “new normal” hassles of travel during this time.

I am more optimistic than the gloom and doom media and suspect we will see widespread trials of vaccines by the fall of 2021 with millions of initial doses administered to front line workers. By early 2021, vaccines will be widely available but may be prioritized by vulnerability – those age 60 and over and the almost half the population with underlying “at risk” health conditions.

It will take considerable time for the administration of those vaccines – probably by a health care provider or pharmacy staff – and limited labor will limit the speed at which the vaccine can be administered to the population{2}. We might not see general population availability until well into 2021 – and the restoration of confidence to travel.

But – prices may remain high initially due to low volumes[1]. As volume builds back, airlines, hotels, restaurants and destination tourist spots will gradually lower prices.

There will be more travel in 2020 but mostly for those who need to travel – business, family emergencies or special events, and limited recreational travel.

As vaccines are administered, travel will gradually build up during 2021.

Due to the time lag in rebuilding volume – and staffing issues at airlines – its time consuming to bring back staff and retrain and certify them – think of pilots and limited simulator time for recertification – this process will take time. Am guessing that it is 2022 and especially summer of 2022 before we see a competitive marketplace of affordable recreational travel again.

Footnotes

[1] Normally, we think of a surplus in supply of goods relative to demand as an argument for lower prices. However, there is a minimum price necessary to cover the costs of delivering the product or service. Companies cannot  operate at a loss for long. Until volumes are sufficiently high to cover fixed costs, prices will likely remain higher too.

{2} There are some “patch” type vaccines under development. These are said to not require refrigeration or special handling, and are similar to a “Band-Aid” that might be self administered by placing it on your arm for a day. If these work, this could eliminate the labor bottle neck.