Steve Glenn of Executive Travel presented Planes, Trains, and Automobiles - Forecasting the travel industry in 2021 through the crystal ball at Lincoln South Rotary Club on January 22, 2021.
Steve started by stating that, though the travel industry really crashed in 2020, it will be coming back in 2021.
The travel industry is one of the largest in the world so this is a major loss to many. Steve was proud to mention that his company had no debt and was able to stay afloat.
He pointed out that airlines are making an unprecedented level of investment in the safety and well-being of travelers. Historically airplanes and motels were quite dirty. But, now airplanes are 99% clean. And, it is not only the airlines - but hotels and motels as well. The new level of cleaning and sanitizing could be the silver lining of the changes needed in dealing with the pandemic.
Steve had many statistics and graphs (updated through the end of November) and also offered some predictions. To view his slides, click here.
March 31, 2020 travel nearly stopped. Even though some travel is back in place, a number of planes have been grounded and there are few seats filled on the flights. As of the date of the statistics, domestic air travel was down 61% and international air travel was down 69%.
The number of flights was reduced dramatically in some states - as much as 74%. Nebraska has seen a reduction in flights of 40%. The load factor - number of seats filled - is only at 53%. The number of active aircraft has reduced by 1400. We had 5856 planes in active service at the end of 2019 but at the time of the statistics we only had 4449.
Another graph showed the reduction in traveler checkpoint throughput which is 59% below average. The largest reductions were in Hawaii, New York, Massachusetts, Vermont and District of Columbia. The least reductions were in Virgin Island, Wyoming, Montana, South Dakota and Idaho.
Tracking the specific details of the passengers on international flights, the number of non-US Citizen International Arrivals dropped by 99.2% in April 2020, with the same rate of drop in the US Citizen International Departures.
Corporate travel has not seen as much recovery as personal travel. With the introduction of the use of Zoom for many meetings, companies have found that they may be able to do some meetings online rather than traveling. Steve predicts that corporate travel may never be back to the high level we saw pre-pandemic. As things calm where companies may have had quarterly meetings they may choose to have 2 of those in person and 2 of those online. Steve predicts that corporate travel will come back but it may take 4 years.
Though Steve anticipates an improvement in the airline industry in 2021 he said it will be 2023-24 before we will see a return to the 2019 passenger volumes.
As the airline industry looks at strategies, they will need to consider things such as:
- How corporate travel has dried up
- Flexibility for travelers
- Travelers prefer non-stop
- Uncertainty of international restrictions and quarantines
- Fares are down, but there is a higher breakeven load factor
- Higher weekend travel requests - fast getaways
- Continued cleaning and sanitizing
- Reduce / eliminate change fees
- Expand no-touch services
- Airport improvement projects
Leisure flight fares are currently historically low. The supply is high and demand low and the oversupply causes the prices to go down. Steve predicts that, when leisure travel returns, the prices will go up - and will go up fast. He suggested if anyone has plans to travel to book now while the prices are low.
Steve added that there are great deals right now on hotel rooms. He predicts that 38% of the hotels will go out of business by the end of the pandemic. Over 4,000 hotels will default this year. The best deals are in downtown hotels that rely on conventions. Since there are no conventions, their rooms are empty - they are reducing prices.
With or without the pandemic, Steve's suggestions for easier travel:
- Purchase TSA Pre-check - very much worth the investment
- Use a travel agent; if there are any problems with arrangements they are there to help you; it is worth the fee to have that peace of mind
BIO:
Steve Glenn founded Executive Travel 34 years ago and was a pioneer of online travel fulfillment, virtual agents and zero online fees. Steve Glenn serves as Chairman of the Board of Executive Travel.
In 2013 Inc. magazine ranked Executive Travel as the fastest growing Travel Management Company in its 32nd annual Inc. Magazine 500|5000, an exclusive ranking of the nation's fastest-growing private companies. Executive Travel has been honored four times on the Inc. Magazine 500/5000 list.
Steve Glenn was awarded Entrepreneur of the Year by the University of Nebraska – Lincoln College of Business Administration, and Business Owner of the Year by the Lincoln Independent Business Association.
Steve is Past President of the Nebraska N Club – representing all letter winners at the University of Nebraska– Lincoln. Steve was an offensive lineman at UNL under Coach Tom Osborne. Over his career Steve Glenn has served as President, officer or director on over 20 organizations around the State of Nebraska and the nation.
Steve Glenn earned a bachelor’s degree from the UNL College of Business Administration in 1979. Steve is a serial entrepreneur who has started over 40 companies. He and his family currently operate 5 companies ranging from real estate development, international importing, and retail.