In April 2020, WeTravel surveyed its clients to find out how they have been impacted by COVID-19 and uncover their outlook for the future. We received over 590 responses from travel companies located worldwide.
The majority of our respondents are U.S based travel companies offering multi-day international tours to small or large groups, or individual travelers.
Just under 90% of the companies who participated employ fewer than 20 people, making them representative of small to medium sized businesses.
Nearly 75% have been operating for more than 5 years, which indicates that the pandemic has impacted established businesses as well as newer players in the industry.
Impact of COVID-19 On Travel Businesses
Watch the video below to get the details from our survey results.
Although some respondents report that COVID-19 started to affect business from early to mid-February, just under half indicate that early to mid-March was the major tipping point.
“A global pandemic requires a global unified reaction to resolve. Every human being, no matter race, depends on resolving this matter. As long as it's my country and your country and my town and your town then these things will last much longer and cost much more lives than could have been.” - All About Travel
In that time, just over 60% of the respondents have canceled between half and all of their scheduled trips. Translating this into what it means for revenue in 2020, over half anticipate a decline of 50% when compared to 2019. 10% of companies even predict a decline of more than 90%.
Based on the 21% who indicated that they were unsure of the impact of COVID-19 on revenue, there is still uncertainty in this respect.
Response Of Companies
Most tour operators are confident that travel will pick up again in the fall of this year. Around a third have rescheduled trips between June and September 2020, and close on 40% have put in dates between October and December 2020.
The rest plan to delay until 2021 and monitor the situation as they go.
“I realize there are many misconceptions about the travel industry. Most travelers don't read or understand cancellation policies, terms, conditions, or travel insurance. Travelers also think travel companies keep or profit from the entire cost of a trip. I also realize that customers are more understanding if you are transparent and calm in difficult situations.” - Smart Student Travel
Tour operators are being as flexible as possible on the matter of offering refunds for canceled bookings or trips to their clients. Nearly half have processed refunds to clients while 27% are waiting for refunds from their vendors. On the other hand, only 39% of vendors are allowing refunds, with 11% unwilling to refund or reschedule at all. This leaves travel companies with the shorter end of the stick.
To work around this, companies are offering travel credits to clients and negotiating longer time frames to come to a resolution. This approach appears to be effective as the bulk of respondents haven’t received any chargebacks or disputes yet. Although, 15% are not yet sure if any have been lodged against them.
Travel companies are doing what they can, given the situation, to maintain their client relationships and precious cash flow. Respondents indicate that clients are reacting positively to their refund/change policy, being patient, and rescheduling, outweighing the negative responses which can have a further negative impact.
Overall Sentiment and Outlook
"Our greatest realization has been to remain positive, patient, and to develop a company that is resilient to such events over the long term. If there is one thing that being a small business owner and traveler has taught us, it is how to be adaptable to changing situations." - Beyond The Map
Comparing the respondents' outlook for 2020 and 2021: over half currently have a negative outlook for the second part of 2020, while 10% remain positive.
However, the outlook is better for next year, with almost a third of respondents indicating they feel positive things will be happening again in the travel industry in 2021. Fewer expressed negativity too, as this decreased to 22%.
When asked how long the industry is going to take to recover, a 44% majority believe it will take between 6 to 12 months. This sentiment is reflected in their reschedule dates and general outlook for the coming months.
Check out the slides below for a sharable summary PDF of the survey results.
Key Takeaways
The travel industry is being hit hard by COVID-19, with major annual revenue declines expected by 56% of respondents for 2020.
Although trips are being rescheduled for as early as June this year, 70% are aiming for October 2020 and beyond. The outlook for 2021 sees greater positivity with more than half of respondents believing recovery will take place in less than 12 months.
