Report Overview

In January 2022 we rebranded the Skift Recovery Index into the Skift Travel Health Index, to better represent our desire to track the travel industry’s performance beyond the impact of Covid-19. This archived report might still make reference to the Skift Recovery Index.

This report highlights the latest insights from the Skift Recovery Index. The index covers travel’s performance since January 2020, up to and including March 2021.

The Skift Recovery Index is a real-time measure of where the travel industry at large — and the core verticals within it — stands in recovering from the COVID-19 pandemic. It provides the travel industry with a powerful tool for strategic planning, of utmost importance in this uncertain business climate.

We work with Amadeus, Aviasales, Cendyn, Collinson, Criteo, Duetto, Hotelbeds, Key Data Dashboard, OAG, Onyx CenterSource, RateGain, Shiji Group, SimilarWeb, Skyscanner, Sojern, Transparent, and TrustYou as data partners to provide you with a monthly update of travel performance in 22 countries around the world.

March Brings Positive Vibes

March 2021 might go down as a true turning point for the travel industry. The global average score, weighted based on tourism output per country, has breached the 50% mark, with the overall Index scoring 53 points in March.

In our previous reports we have always showed the weighted average score, since we feel it is important to give higher importance to countries that contribute more to the global tourism industry. The Index includes 22 countries, with large tourism markets like the U.S. and China weighing heavier than smaller markets.

We can complement this weighted average with a simple average, where each country’s score has a 1/22 weighting. There has been a consistent gap between the two averages since recovery started a year ago, but the gap has grown since the beginning of the year. This highlights how larger tourism economies, particularly those with larger domestic markets, are the first to really see strong pick up in demand.

Exhibit 1: Recovery breaks through 50% barrier

At the regional level, all regions except Latin America registered positive growth in March. Europe’s performance remained muted, although it showed some growth and the region has the potential to see demand pick up quickly, as we saw during the summer of 2020.

The big winner in March was North America, with the U.S. registering a gain of 10 Index points, making it the second best performing country after Mexico (which is also benefiting from the strong travel demand in the U.S.).

Exhibit 2: Latin America only region that does not see growth

Latin America is a balancing act between Mexico, which gained almost 20 percentage points in March alone, and Brazil, which showed the strongest drop in performance as President Jair Bolsonaro continues to downplay the pandemic despite Brazil’s new cases topping 70,000 daily in March, and with more than 330,000 total recorded deaths.

Exhibit 3: Only three countries saw scores decline in March

Europe’s Continued Worries

Next to Brazil there were only two other countries that saw their performance decline: France and Italy. France re-entered a stricter lockdown at the end of March as new daily cases increased rapidly. This will also put a damper on any hopes of a better performance for France in April.

Italy, which also spent March in a strict lockdown, has seen increases in new case numbers slowing, and is easing restrictions mid-April. It gives some hope that things might improve from May onwards, but Europe is nowhere near the end of the third wave yet.

Exhibit 4: France and Italy following very similar trajectories

Spain saw the strongest percentage growth of any European country, tied closely to a similarly strong increase in the United Kingdom which is continuing to be the example of an effective vaccine rollout in Europe, and closest to opening up its economy and borders.

That said, there also remains major uncertainty in the UK. While some initial steps are being taken to lifting restrictions, no date has been set in stone about a restart for international travel. Jet2 Holidays, a major UK tour operator, decided to suspend all flights until at least June 24 after it did not receive enough clarity from the UK government. Analysis from business intelligence provider Mabrian shows that this will particularly impact seat inventory to Spain.

Vaccination Shortages and Pushback Might Harm Reopening

According to research by Ipsos, the intent to vaccinate in France is lowest in Europe, which might mean an extended period before opening up. Scepticism around vaccinations, as well as shortages of the vaccine, are evidently a worrying sign for the travel industry.

Exhibit 5: UAE, U.S., and UK still stand out as frontrunners in vaccination drives

One country which has a great domestic travel potential, but where the current pandemic response is chaotic, is India. At present, there are 1.3 million active COVID-19 cases in India, with five states accounting for about 70% of all cases. The situation is particularly bad in Maharashtra, with the state under strict weekend lockdown, in addition to an evening curfew on weekdays.

With lockdowns also present in other states, protests by retailers and the hotel industry are growing. Our senior research analyst based in Mumbai notes that government guidelines are largely disregarded with shops open, political rallies taking place, and religious festivals being celebrated.

Despite being one of the world’s largest vaccine manufacturers, India is facing a vaccine shortage at home. By the beginning of April, India had vaccinated around 5% of the population, with surveys showing that around 60-70% of Indians would take a vaccination if available. However, with a chaotic rollout blighted by vaccine shortages, and people trying to avoid hospitals and vaccination centers that struggle to cope with capacity issues, there is a lot of uncertainty about when the country will be able to make good on its domestic potential.

From Layoffs to Labor Shortages in the U.S.

Delta has already had to cancel flights due to pilot shortages, Uber is seeing demand returning quicker than drivers, and hotels are predicting staff shortages as the summer is expected to see bumper crowds of domestic travelers.

Whichever graphic we show, the upward trend that started in February continued in March, and in many cases actually accelerated.

Search levels for flights and hotels are up. Hotel searches have been high for a while, but especially flight searches soared in March, up 46% from February.

Exhibit 6: U.S. travel searches are up

The number of passengers going through U.S. ports increased from 24 million in February to 38 million in March according to TSA numbers. Scheduled seat capacity for domestic flights increased by 35% between February and March, while international flight capacity remained understandably flat.

Exhibit 7: Domestic surges, not indication of recovery in international flights yet

U.S. hoteliers had looked enviously at China, as domestic travelers propped up booking levels and occupancy rates to help the country’s hotel industry reach close to pre-pandemic performance levels for more than six months now.

But finally, U.S. hoteliers are seeing the same happening to them as well. In March, U.S. hotel bookings jumped up to 85% of 2019 levels, higher than what China achieved only a month earlier. Chinese hoteliers, however, also benefited from the ending of local lockdowns in their country and saw bookings increase to almost 1.5x of 2019 levels.

Exhibit 8: U.S. hotel bookings now equal Chinese levels

It nevertheless shows how the U.S. accommodation sector is nearing a complete return to pre-pandemic levels for some indicators. Also in terms of actual occupancies achieved, the U.S. achieved an estimated 54% occupancy rate, which is only 14 percentage points lower than in March 2019. Average daily rates have also shot up, now only 21 percentage points below March 2019 levels.

Exhibit 9: Hotel occupancy and ADR only a fifth down from pre-pandemic levels

There is still a long way to go, and the final 20% to pre-pandemic levels might take years to achieve. For airlines similarly, we don’t expect international seat capacity and prices to return to pre-pandemic levels for a few years. On balance, however, March had a lot of positive vibes.

Data Partners

We would like to thank the following partners who are collaborating with Skift Research by providing their data which shapes the Skift Recovery Index.

Amadeus is a global travel technology leader that delivers the most trusted, critical systems across the travel industry to airlines, airports, hotels, travel agents, and car rental and railway providers. Amadeus is providing insight on travel search trends and behavior for the Skift Recovery Index.

Aviasales was launched as a blog on bargain air tickets in 2007 and grew out to become the world’s biggest independent travel search. Aviasales serves 20 million monthly active users from Eastern Europe & Central Asia, and provides flight and hotel booking data for Russian travelers for the index.

Cendyn’s software solutions drive sales, marketing, and revenue performance for tens of thousands of hotels across the globe with a focus on integrated hotel CRM, hotel sales, and revenue strategy technology platforms. The company provides data on hotel email campaigns for the index.

Collinson is a global travel services business, creating traveler experiences, loyalty strategy and programs, travel insurance, and travel and medical assistance. Priority Pass is operated by Collinson and provides frequent travelers access to over 1,300 lounges, with Collinson providing aggregated customer lounge visit data for the index.

Criteo is a global technology company powering the world’s marketers with trusted and impactful advertising. The company provides indexed data from various OTA, airline, and car rental partners. Criteo provides data for airline and car rental web traffic and sales.

Duetto delivers a suite of cloud applications to simplify hospitality revenue decisions and allow hoteliers to work smarter, increasing organizational efficiency, revenue, and profitability. More than 4,000 hotel and casino resort properties in more than 60 countries have partnered to use Duetto’s applications. Duetto provides hotel bookings and cancellations data.

Hotelbeds provides over 180,000 hotels across the globe with access to high-value, complementary distribution channels that do not compete with the hotelier’s direct distribution strategy. The company provides data on hotel bookings and source market performance.

Key Data Dashboard is a provider of real-time, direct-source vacation rental data for the short-term rental sector, aggregating data sourced directly from more than 30+ reservation systems of 700+ professional property managers around the world. Key Data provides bookings, RevPAR and cancellations data for the Skift Recovery Index.

OAG collects and analyzes data about every journey, every booking, every take-off and landing, departure, and delay, totalling over 110,000 flights, 100,000 schedule changes daily and over 4 million flight status updates. OAG provides flight capacity data for the Skift Recovery Index.

Onyx CenterSource is a leading global provider of business-to-business payments and business intelligence solutions to the hospitality industry. With a legacy dating to 1992, the company facilitates in excess of $2.1 billion in payments annually, and partners with more than 150,000 hotel properties. The company provides hotel stay, cancellations, and commission data.

RateGain helps travel and hospitality companies with cognitive revenue management, smart e-distribution, and brand engagement. RateGain supports over 250,000 hotel properties globally by providing 240 billion rate and availability updates, and powering over 30 million bookings. For the Index, RateGain provides hotel bookings and cancellation data.

Shiji Group provides software solutions and services for the hospitality, food service, retail, and entertainment industries, serving over 74,000 hotels, 200,000 restaurants and 600,000 retail outlets across the world. Shiji Group provides China hotel bookings and room night data for the Skift Recovery Index.

SimilarWeb gathers digital data from multiple sources, including first-party direct measurement, public data sources, anonymous behavioral data, and external partners. For the Index, SimilarWeb provides unique visitor data to the top 10 travel websites per country.

Skyscanner has 100 million peak monthly active users, over 100 million app downloads, and more than 1,200 partners across flights, hotels, car rental, and more. Skyscanner’s Travel Insight product helps companies guide their COVID-19 recovery plans, and the company contributes flight search data from Travel Insight for the Skift Recovery Index.

Sojern provides digital marketing solutions for the travel industry, helping to drive direct demand for more than 10,000 hotels, attractions, tourism boards, and travel marketers. Sojern contributes flight and hotel search data for the Skift Recovery Index.

Transparent provides business intelligence serving the vacation rental industry, including insights around supply growth, demand patterns, rate changes, and property manager activities. Transparent contributes occupancy and bookings data for the Skift Recovery Index. The company draws on data from the 34 million vacation rental listings they track worldwide, in every geography.

TrustYou provides a guest feedback platform that makes listening to customers easy, powerful, and actionable. In response to the current crisis, TrustYou has put together a Travel Health Index, using hotel reviews managed through its platform as a proxy for hotel occupancy. TrustYou’s Travel Health Index is integrated in the Skift Recovery Index.

Data Tables