The coronavirus pandemic has upended the travel industry.
Commercial airlines are on the verge of collapse, empty hotels are desperately selling bonds for future discounted travel, small businesses are struggling to stay afloat, and destinations that rely on tourism are taking huge hits. The World Travel and Tourism Council estimates that 100 million travel and tourism jobs could be lost due to the pandemic.
We spoke to top leaders across the travel and tourism industry, from companies like Airbnb and Hilton, and asked them three questions: How will the coronavirus change your company, your industry, and the world?
Their responses revealed a common theme: Travel will come back, but your vacation will never be the same.
The answers, edited for length and clarity, are below.
Additional reporting contributed by Troy Wolverton, Matt DeBord, Brittany Chang, Kristen Lee, Shana Lebowitz, Alex Nicoll, Tom Pallini, and Madeline Stone.
Brian Chesky, CEO of Airbnb: ‘We used to do a lot of travel for work and then we entertained ourselves on screens. That’s going to inverse.’
Dia Dipasupil/Getty Images for Tribeca Film Festival
Airbnb is about connecting people. Before this crisis, we brought 2 million people together a day, and when this crisis ends, we’re going to get back to doing just that. But to get there, we are going to need to be scrappy. We’re going to be nimble, we’re going to simplify our operations and focus on what makes us different: our community of hosts.
No one knows for sure [how the crisis will change the travel industry], but I can give you two thoughts. First, when the comeback starts, it will start locally. People are going to take trips that are close to home and they’re going to want something affordable. Second, I think we’re seeing that you can do a lot [via] video conferencing, and that’s going to have a big impact on how often people travel for work. Business travel isn’t going to go away, but I think it’s going to look very different in the future.
We used to do a lot of travel for work and then we entertained ourselves on screens. That’s going to inverse. I think we’ll work more on screens and entertain ourselves in the real world.
I also think many people are realizing they don’t have to be tethered to one city. So you’ll see more people who are going to choose to live around the world, spending a few months at a time in different places. And we’re going to focus in part on longer-term stays to better serve those people.
I’ve also been thinking about what won’t change. In 1950, 25 million people crossed a border, and last year 1.4 billion people did. That happened because there is an innate human desire to travel, to explore and that is never going to go away. Travel may be on pause, but it’s going to come back.
Bob Wheeler, CEO of Airstream: ‘There’s some indication that as we settle into a new normal, folks will forgo air travel, cruises, and overseas trips in favor of destinations closer to home.’
There is really no part of our business that has not been impacted by the coronavirus epidemic and the resulting recession. We were forced to shut down our production operations almost immediately, and have spent the last weeks rightsizing the company for the new market realities when we return. We went from sneaking up on the idea of a remote, dispersed workforce to having to embrace the practice immediately. Our days of welcoming 800 production associates to work every morning are over, and we’re planning a health assessment for folks as they arrive at work. In other words, it’s a profound change.
The RV industry is well positioned to survive big downturns, with high variable and relatively low fixed costs. So, we can scale down quickly and when the market returns, scale back up to meet the need. And as we start to envision the post-COVID, post-recessionary landscape, we see many indicators that point to a strong recovery for the RV industry, perhaps ahead of the economy as a whole. There’s some indication that as we settle into a new normal, folks will forego air travel, cruises, and overseas trips in favor of destinations that are closer to home. RVs are the perfect vehicle for that kind of mindset. You can move at your own pace, and bring along your own environment in which to live and cook and relax. RVs give you the flexibility to choose the travel experience that works best for you, no matter the circumstances.
Time will tell, but the fear of contaminant, crowds, planes, and the like will carry over for some time. Companies that now realize the efficacy of a dispersed workforce will rethink their operating structures. The pervasive urbanization trend may slow, and perhaps even reverse in some places. The effort to prevent and prepare for the next novel virus will be intense and span many industries, and countries. These are a few theories, but growing trends certainly seem to point in this direction.
Ben Fraser, CEO of Ready.set.van: ‘We’ve already seen a pretty strong uptick in demand for vans that are already built.’
Honestly, I think [coronavirus] is probably going to be quite good for the camper van industry. For the next year at least until there’s a vaccine, I don’t think anybody’s going to want to go to a resort, get on a plane, or even go and stay in a hotel in a densely populated city. People are trying to figure out what they can do. Getting in a car and going somewhere is something most people feel like they can do.
We’ve already seen a pretty strong uptick in demand for vans that are already built. For us it’s been so much more interest than we could possibly ever supply for a van that’s ready to go. When we say we don’t have [something] that’s built and ready to go, their interest drops off.
Our communications people can work from home, but obviously, we can’t build vans from home. Me and [three] of the guys [are] living out of vans at the shop. I go home to visit my family periodically, but we’ve just quarantined ourselves here and everybody agrees that it’s the best thing.
I have a pretty grim view on [coronavirus]. We’re so incredibly grateful to be in a thriving business during this extraordinarily difficult time. But when I talk to all the various small business owners that I know, every single one has a number of weeks or months that they can survive until insolvency. None of these people can survive six months.
Carolyne Doyon, CEO and President of Club Med North America: ‘We believe there will be increased demand for resort options that are less dense … resorts that are integrated in, and respectful of, their surrounding natural environments and are spread out across larger areas, with low-rise buildings that blend in rather than traditional concrete high-rises.’
After a long period of social distancing and staying indoors, we believe people will want to either revisit places they’re familiar with or reconnect with a brand that bring them joy and memories. The travel industry, from tourism boards and hotel operators to airlines, will work very hard to ease travelers’ concerns by adjusting their operations and offerings to cater to this new world we live in.
For example, Club Med is currently in the process of creating new safety and hygiene protocols that will be implemented once our resorts open, as we know health and safety will be one of the main factors in consumers’ decisions to travel. Examples include monitoring guests’ temperatures upon arrival, as well as the temperatures of our staff, serving even more single-plated food at buffets, and continuing to sanitize all areas of each of our Children’s Club daily. It is our mission to ensure all guests and employees feel safe and comfortable when staying with us.
We also believe there will be increased demand for resort options that are less dense, giving a newfound importance to what’s been at the core of Club Med’s philosophy since its inception 70 years ago — resorts that are integrated in, and respectful of, their surrounding natural environments and are spread out across larger areas, with low-rise buildings that blend in rather than traditional concrete high-rises.
With a new sense of freedom, we anticipate travelers will be excited to get outdoors and explore nature, and we look forward to providing them with opportunities to get outside through customizable experiences that fit their needs — from private oceanfront dining and wellness and spa experiences to a diverse range of included sports and activities. We also believe families have truly been able to reconnect during these unprecedented times, so once travel resumes, they will not only look for opportunities to unwind and recharge on vacation, but will also look for opportunities to keep that connection strong.
Prior to the pandemic, we noticed more multigenerational families choosing to stay with us, so we conducted a research study that confirmed that “family togetherness” and “intergenerational bonding” were the two biggest drivers for choosing a vacation. We anticipate these two driving factors will prove even stronger once families are able to travel again, and we will be ready to provide them with a comfortable, safe and memorable experience that will allow them to bring home cherished family memories.
Francis Davidson, CEO of Sonder: ‘It’s going to take our industry some time to recover, but we think that travelers will turn their attention even more towards flexible accommodations as they look to stay while staying safe.’
Over the past month, we’ve implemented several initiatives to meet the needs of travelers and broader communities while preserving our business amidst an intense slowdown in travel demand. In addition to prioritizing the health and safety of our community, our strategy is to counter the cash impacts of the slowdown of revenue we’re experiencing.
While our core business is typically centered on stays of seven nights or fewer, we recognized that we are uniquely positioned to offer temporary shelter to those in need. We have since opened our doors to those affected by the pandemic by offering a discount of 40% on stays over 14 days and have seen very positive feedback on the offering from a wide range of individuals who have been displaced during this time, including college students, military personnel, displaced foreign diplomats, members of the press and healthcare professionals. We’ve essentially created a new line of business to focus entirely on our long-term rental offering right now, which has included engineering work, performance marketing, and B2B outreach.
Our spaces are self-contained apartments and the digital services we provide allow us to operate with fewer on-site staff, resulting in limited in-person interactions. Most offer full kitchens, living rooms, and washer dryers, meaning guests can easily stay put for extended periods of time. This has allowed us to keep occupancy rates near 50% and will help us to bounce back when travel commences again.
It’s going to take our industry some time to recover, but we think that travelers will turn their attention even more towards flexible accommodations as they look to stay while staying safe.
Andre Haddad, CEO of Turo: ‘We anticipate road trips and personal auto travel will rebound faster than group travel.’
Looking ahead to the post-isolation world, protecting the health of our community through cleaning and disinfecting Turo cars before every trip is our top priority. We will also double down on our investment in contactless check-ins by expanding Turo Go, which allows guests to unlock Turo cars directly from our mobile app.
As home isolation orders are lifted yet physical distancing remains top of mind, we anticipate road trips and personal auto travel will rebound faster than group travel. Travelers will prefer the privacy and comfort of traveling in their own car with close family and friends, and Turo is well positioned as the leading car sharing marketplace to fulfill those trips.
In addition, with record-high unemployment rates and economic uncertainty, car owners will be looking for alternative ways to offset the costs of their car and earn extra income. By sharing their cars on Turo, car owners can generate income for their families that will help them weather this difficult economic storm.
Thomas Flohr, CEO of VistaJet: ‘The commercial network that was so well built over many, many years, and actually decades, has come to a complete stop.’
I think we need to look at two periods of time. We [initially] saw an unprecedented demand for flights from one continent to the other. In the January-February time frame, there was very strong demand away from Asia into the United States and Europe.
As the virus was in Europe in February, and moved on to North America as Asia was recovering, we saw the reverse trend that people were flying back into Asia after they were leaving Asia in the January-February time frame. This coincides with the massive reduction of commercial flight connections point-to-point being available.
Since the end of March, we have seen a reduction in our flight activity and this was obviously mainly due to the shutdown by governments and really only allowing the repatriation of nationals of different countries.
We see that the commercial network that was so well built over many, many years, and actually decades, has come to a complete stop. For a commercial airline to rebuild that network, that density of flights and routes, and do it profitably, will be a very, very hard job and might take years.
This is due to the fact that their business model is depending on the load factor — how many people they can get on a flight and then operate it profitably. So we’re seeing that with our business model of a floating fleet that we can immediately fly again when the governments are allowing it.
Undoubtedly, the experiments we’re all going through by using video conferencing, FaceTime facilities for quick meetings a quick exchange of ideas has certainly changed significantly our behavior. So that in the short-term, I don’t see travel [is going] to rebound anywhere in the near future.
However, our client base, which are the chairmen and CEOs of significant companies, they still need to go and be with their companies. They need to go and see their customers.
That’s where we’ve seen over and again — that business is done between human beings, and it’s that travel which we believe should rebound first.
Rob Katz, chairman and CEO of Vail Resorts: ‘What we need to do as an industry is provide guests the time, flexibility and assurance they need to make travel plans and then ensure that the experience we provide has their health and wellbeing top of mind.’
This crisis has hit the travel industry particularly hard, the ski industry included, and it will take time before we see normalcy return. That said, I’m optimistic about the future and believe that we will be able to continue to offer an incredible experience to our guests, even as we navigate potential new restrictions that will ensure the safety and wellbeing of everyone at our resorts.
Recognizing the uncertainty that exists around travel and tourism generally, we have taken steps to provide peace of mind to our guests. We are redefining pass protection with the introduction of our new ‘Epic Coverage’ which will offer pass holders refunds on certain resort closures and eligible personal events, and eliminated our traditional spring deadlines to give our pass holders more time to plan.
Many people are eager to travel and enjoy the outdoors again. What we need to do as an industry is provide guests the time, flexibility and assurance they need to make travel plans and then ensure that the experience we provide has their health and wellbeing top of mind.
Axel Springer, Insider Inc.’s parent company, is an investor in Airbnb.
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