Skift Recovery Index: Methodology

Overview

Introducing the Skift Recovery Index

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.

Included in the index are:

  • Weekly top-level global and country travel recovery indices
  • Weekly country-level recovery index for: hotel, short-term rental, air travel, car travel
  • Weekly country-level recovery index split by source and destination performance
  • Monthly global and country-level macroeconomic recovery index, built upon unemployment, industrial production, retail sales, and stock market returns indicators.
  • A mix of leading and trailing indicators. Leading indicators include actual occupancy, revenue per available room (RevPAR), seat capacity, and load factors. Trailing indicators include travel searches and reservations/bookings, cancellations, etc.

Country Coverage

The Index focuses on the travel performance in 15 of the largest tourism economies, combined accounting for 51% of inbound tourism receipts, 61% of outbound tourism expenditure, and 66% of global 2019 GDP.

  • Australia
  • Brazil
  • Canada
  • China
  • France
  • Germany
  • India
  • Italy
  • Mexico
  • Singapore
  • Spain
  • Thailand
  • U.S.
  • United Arab Emirates
  • United Kingdom

The selection of these countries is a combination of including the largest economies, and most important tourist destinations and origin markets. The selection purposely includes a number of net exporters of tourism (more inbound tourism than outbound tourism), and net importers of tourism, to track how this impacts recovery.

The Skift Recovery Index Score

Skift Recovery Index (SRI) Score Calculation
The Index is designed to provide an easy overview of the health of the travel industry. To do this, current 2020 performance of each indicator is compared to the same time last year.

E.g. Performance in week 10 of 2020 (w/c March 1, 2020) is compared to week 10 of 2019 (w/c March 3, 2019)

The Skift Recovery Index provides a score relative to a baseline reading of 100 for the same week in 2019. The index provides data back to week 1 of 2020 for all countries, and will run for an as of yet undetermined time.

Comparing the current performance with 2019 figures, which was a strong year for travel in most countries and verticals, allows for easy interpretation as different verticals and countries are starting to recover at different rates. Possible future downturns can also be identified.

Seasonality provides major fluctuations in the travel industry, and impacts countries differently, and by comparing the current situation with the previous year, the index compensates for any seasonal fluctuations.

Retrospective Data Changes
To make the index near real-time, we have opted for weekly updates of the index scores. Most of our data partners are able to provide us with weekly data. There are a few indicators, however, for which we rely on monthly data, including government data for our macroeconomic indicators, hotel RevPAR from STR, and flight load factors from IATA.

As this information is often available with a time lag, Skift Research uses the most recent month’s data to make an estimate for the current month and all weeks in the month use the same estimate and receive the same weighting score. We update this retrospectively when full-month data becomes available, which might result in revisions to our index scores.

Click below to download the full methodology for the Skift Recovery Index, including further information about the index design, indicators, weightings, and our data partners (subscribers only).

Available exclusively to Skift Research Subscribers.

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