Skift Recovery Index: November 2020 Highlights

Overview

This report highlights the latest insights from the Skift Recovery Index. The index currently covers travel’s performance from December 29th, 2019 to December 5th, 2020 (weeks 1 to 49). This report focuses on the performance during the month of November.

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, Arrivalist, Aviasales, Collinson, Criteo, Duetto, Hotelbeds, Key Data Dashboard, OAG, Onyx CenterSource, RateGain, Shiji Group, SimilarWeb, SiteMinder, Skyscanner, Sojern, Transparent, and TrustYou as data partners.


A final update in 2020

November: The U.S. chose a new President and more vaccine manufacturers showed promising test results, but Europe saw coronavirus cases rising and the Singapore-Hong Kong bubble burst before it even took off.

This is the latest Highlights report we publish in 2020, focusing on the month of November. We will pick up the baton again next year.

As we near the end of a year to forget, let’s close out with a look at the countries that have shown some of the best recoveries lately, and why.

Little movement at global level

The globally weighted Index ebbed and flowed but moved into December on a high of 44, which indicates that the travel performance stands at 44% compared to the same time last year. While this is a slight uptick from the end of October, in the great scheme of things the index has been relatively flat since strong recovery in May and June. The Index has not been above 50% since March, when it was on its way down.

Exhibit 1: November sees slight improvement, but not moving the needle

All travel verticals dipped in early November, but since then have shown some recovery towards the end of the month. Lodging remains the strongest travel sector, although it is still under 50% of normal performance. Most markets are now entering winter months which historically see lower demand, and we don’t expect to see a significant upswing in travel demand until probably the second quarter of 2021.

Exhibit 2: Lodging remains strongest travel vertical

Regional performances started showing stronger divergence in October, and this became further pronounced in November, with Europe dropping sharply in the first weeks of November before a slight rally at the end.

Exhibit 3: Regional divergence is growing

The Middle East and Africa region (which admittedly is only covered through South Africa and the UAE in the Index) showed strong growth during November, as both the UAE and South Africa performed well.

Similarly, Latin American countries like Mexico and Brazil saw positive performances, and Argentina, long the country with the worst performance, registered the strongest performance rise in November, meaning it now has a better performance than many Asian and European countries.

Exhibit 4: Country scores, ranked by highest current score

Top performers

The United Arab Emirates

After a strict lockdown over the summer, the United Arab Emirates has relaxed its entry requirements. International visitors have to show proof of a negative COVID-19 test, with visitors from the UK and Germany also allowed to take a complimentary test upon arrival.

The country’s main attractions are the cities of Dubai and Abu Dhabi. Major urban centres have seen their attractiveness diminish globally, but the UAE has seen a strong uptick in demand from both domestic and international travelers.

The UAE relies heavily on international visitors. Skift Research estimates that domestic spending last year was around $3.3 billion, while international inbound spending was over $21 billion. Dubai, as the main attraction, relies heavily on tourism and welcomed 16.73 million international visitors last year.

The UAE has a relatively well-balanced mix of source markets, not relying too heavily on a single market, like Hong Kong relying on China, or Mexico on the U.S., for example. With ever-changing travel restrictions, this puts the country in a good position to continue to attract tourists from those countries that allow international travel.

The country, with its warm climate, is able to attract visitors who lost the opportunity to travel to the sun during the summer months. According to data from Skyscanner’s Travel Insight tool, pent-up demand in the United Kingdom benefited the country.

Gavin Harris, director of strategic partnerships, flights at Skyscanner told Skift Research: “The addition of UAE to the UK’s safe travel list in November is a positive indicator for recovery. Our demand data shows a dramatic increase in bookings to Dubai in particular, which is a popular winter sun destination for UK travellers in December and January.” In a reciprocal move, the UAE allows UK visitors to test upon arrival rather than needing to do a test before arrival.

Furthermore, a recent diplomatic deal between the UAE and Israel has boosted arrivals, with tourism officials reportedly expecting more than 70,000 Israelis to travel to the UAE over the eighth days of Hanukkah.

Exhibit 5: Searches for flights from the UK to UAE saw a major bump after government announcement

According to analysis by CBRE, the number of hotel room nights occupied by UAE
nationals already increased by an average of 3.7% annually over the 2015-2019 period, and the company’s analysts expect that the pandemic has sped this up considerably. In 2019, UAE residents accounted for 17% of hotel guests, and that has likely doubled in 2020, with the Emirates promoting more domestic tourism while international arrivals have declined.

According to data from the Recovery Index, hotel bookings in the UAE have seen a steady rise since May, and in November topped an index score of 100, meaning that new hotel bookings for hotels in the UAE are at the same level as in November 2019.

Exhibit 6: New hotel bookings have climbed steadily over the past five months

Lodging searches by UAE residents on the 10 largest lodging websites (incl. booking.com, airbnb.ae, cleartrip.ae, and tripadvisor.com), have shown a similar trend in activity, according to data from SimilarWeb. While other countries are showing strong fluctuations, web traffic has increased steadily. However, unlike new hotel bookings for hotels located in the UAE, web traffic stemming from UAE residents remains considerably behind 2019 levels, showing that the UAE cannot rely solely on domestic travelers and will continue to focus on keeping its borders open as we move into 2021.

Exhibit 7: Steady increase in interest for lodging stays amongst UAE residents

Mexico and Brazil

After the UAE, Latin American countries are also performing strongly. When taking a look at the main verticals of air and lodging, we can see that Brazil is performing relatively better in the air segment than Mexico, but both outperform the global average. Also in lodging, both countries are above average, but here Mexico is outperforming Brazil slightly. Argentina has been a consistent poor performer in both verticals, but in November made up a lot of ground, now equalling the global average for air, and having registered very strong growth in lodging.

Exhibit 8: Latin American countries see impressive growth in performance

Brazil has no restrictions for entry by international arrivals. Its domestic travel performance has also seen positive recovery. According to data from IATA, revenue passenger kilometres (RPK; a key indicator of airline health) for domestic flights in Brazil have shown recovery up to -44% in October, compared to an almost 100% decline in April. We expect this trend to continue, with Brazilian airlines ramping up scheduled flights as the country moves into its high season.

Exhibit 9: Brazil domestic Flights outperform region’s international flows

Mexico, also, kept its borders open to visitors arriving by air, with no quarantine restrictions. The country benefited from this, particularly for the arrival of U.S. residents. The family visit segment was notably active, benefiting carriers like Mexico’s Volaris and VivaAerobus.

As said, lodging is performing strongly in Mexico. Vacation rentals have been performing above 2019 levels consistently since July, while hotels also neared 2019 levels of bookings in November.

Exhibit 10: Mexico lodging segments close to, or above, 2019 levels

This has been a testing and strange year, and we hope the Skift Recovery Index, through the data sheets and highlight reports, has provided much needed insight into where and how the industry is recovering. We hope that 2021 will see more upward performance, back to 2019 levels. We will continue to track the industry with our data partners as long as it’s necessary. Happy holidays!


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.

Arrivalist uses mobile location datasets to provide actionable insights on consumer behavior, competitive share, media effectiveness, and market trends, and has been tracking driving behavior of U.S. residents, which we have included in the 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.

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.

SiteMinder works with over 35,000 hotels as their guest acquisition platform to generate in excess of 100 million reservations worth over US$35 billion in revenue for hotels each year. SiteMinder provides hotel booking data for the Skift Recovery Index, pulled from its World Hotel Index.

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