Skift Recovery Index: October 2021 Highlights

Overview

This report highlights the latest insights from the Skift Recovery Index. The index covers travel’s performance since January 2020, up to and including October 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, Beyond, Cendyn, Collinson, Criteo, Duetto, ForwardKeys, 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.

Travel Recovery Keeps Ticking Along

October saw the travel industry come another few points closer to recovery. The global index now stands at 64, which indicates that travel performance is 64% compared to October 2019. 

Most regions moved into black numbers again after a few disappointing months, indicating that fears over the Delta variant might be waning. 

Asia Pacific continues to be a tale of two cities. Where China was the only standout performer in a region stifled by strict border and lockdown regulations, the country now stands apart again as it is one of only a few countries (including Hong Kong) that is holding on to its ‘Zero Covid’ strategy. Most other countries, including Thailand, Singapore, Indonesia, and parts of Australia, have started opening up during October or early November. This will likely put the region in a prime position for some much needed uptick in demand over the coming months, although it remains to be seen how policy makers respond if new cases start to increase.

Europe had another decent October, although its trajectory was nowhere near what it saw between April and August. As we move into November, many countries are seeing new cases skyrocketing again, despite high vaccination rates, with countries like Russia, Austria, and the Netherlands implementing soft lockdowns again. If this surge continues, we can expect European travel performance to be suppressed as we move into 2022.

Correlating Travel’s Performance With Case Counts and Local Mobility

In a previous Highlights report (May 2021) we analyzed the correlation between travel performance and Covid case counts, vaccination rates, and Google Mobility data on traffic at transit stations (including subway, bus, train). We found that Google Mobility, with a coefficient of 0.83, and case counts, with a coefficient of -0.61, showed significant correlation with our travel score.     

We undertook the same exercise again this month, to highlight some countries that stand out for positive or negative reasons.

Correlating the month-over-month changes in traffic levels at local transit stations with the month-over-month percentage point changes in Recovery Index scores shows how the UAE stands out for its strong performance in both indicators. The country hosted the cricket T20 World Cup in October, and is also the host of the World EXPO for the past and coming months, which will have boosted its performance.

Russia stands out for its poor performance, with transit passenger numbers declining in October. If we compare the travel performance with new cases, again Russia falls in the red zone. The country announced a week-long ‘holiday period’ and partial lockdowns to combat rising cases, but it seems to have little effect for now. Average daily cases rose from 19,000 in September to 31,500 in October.    

Germany and Hong Kong also fall just inside ‘red zones’, with rising Covid cases, declining transit passengers, and declining travel performance. As already mentioned, we expect that much of Europe will follow Germany in this direction in the coming months. 

Hong Kong has very few cases, with only 4 (mostly imported) new cases per day on average in October, but the country nevertheless decided to tighten restrictions to better align with China’s policies. The city state, which is highly reliant on Chinese travelers, is hoping a better alignment will increase chances of quarantine-free travel between the territory and mainland. 

Top officials from the Chinese Center for Disease Control and Prevention said the country may open its borders by early 2022 if it vaccinates over 85 percent of its population by then. At the end of October, 74% of China’s population was fully vaccinated. 

Singapore is in an interesting position, with new cases increasing, transit passengers declining, but its travel performance increasing by almost three percentage points, albeit from a low base. In October, Singapore started welcoming its first international flights under their expanded quarantine-free travel scheme. The country has also agreed on a travel bubble with Australia, going into effect on November 21, with the latter opening up to vaccinated travelers from New Zealand as well from November 1. 

Singapore is rapidly increasing its list of countries from which vaccinated travelers can enter without quarantine, all the while seeing new cases rise above anything the city state has seen since the inception of the pandemic. The U.S., for example, has warned its citizens not to travel to Singapore, despite the country opening up to American travelers who are fully vaccinated. 

Two other Asian countries performed strongly on the SRI in October: Thailand and India top the leaderboard in month-over-month gains. Thailand officially reopened to fully vaccinated travelers from a number of regions on November 1, and fully vaccinated travelers are now also welcome in India. 

For Thailand, two of its largest source markets, India and Russia, remain off its ‘green list’, and China continues to impose a two-week quarantine of Chinese travelers coming back from Thailand, all of which will suppress a swift recovery for now.  

The Aviation Industry Finally Sees Positive Movement

We have written a lot about the lodging industry in the past months, so in this Highlights report we will instead focus on analyzing whether and how the aviation industry is recovering.

Flight booking data from our data partner ForwardKeys shows that booking levels have increased significantly since the beginning of the year, and in Europe and the Americas levels are nearing pre-pandemic levels.

Also when we look at seat capacity data from OAG, the same regions are showing the strongest performance, with capacity levels in October back to 70% of pre-pandemic levels in Europe, North and Latin America. 

The Index also includes airport lounge visit data from Collinson, which has seen a steady increase in visits since the beginning of the year. This very likely signals the return of business travel demand and high-end leisure demand. Europe stands out here, which is mainly driven by Russia, where airport lounges have been open all year (not the case in many other countries) and demand has been back to pre-pandemic levels since July 2021. 

Despite these improving indicators, there remains weakness in other areas which highlight that the industry continues to operate in uncertain times. 

Firstly, the amount of flight searches that our data partners Amadeus, Skyscanner and Sojern are seeing remains suppressed. Europe is performing best at still only 52% of pre-pandemic levels, and there has been very little upward movement since the beginning of the year. The situation clearly doesn’t call for people to shop around and dream about their next trip just yet.

Secondly, according to data from Skyscanner, virtual interlining or self-connection, where people have to book two separate flights to get to their destination, has been up considerably since the start of the pandemic, but there has been little improvement in this. Route networks are clearly not back to optimal levels yet.

And finally, if we look at the latest publication from the Bureau of Labor Statistics in the U.S., we see that inflation rates are at the highest they’ve been for 30 years, but airline fares are bucking the trend by seeing strong declines in pricing. This highlights that airlines continue to lack pricing power and that capacity continues to outstrip demand.

Weighing up all these renewed strengths and some continuing weaknesses, there does seem to be a real sense in the industry that it will see a real boost next year, putting the industry in a prime position to achieve pre-pandemic volumes and revenues by 2023 or 2024. In other words, things will return to normal, sooner than many had expected.

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.

Beyond is a leading revenue management platform for short-term rental owners and managers to get, grow, and keep revenue. The easy-to-use platform includes a dynamic, demand-driven pricing tool with extensive market data that pairs with OTA distribution and a best-in-class booking engine. Beyond has supported over 340,000 properties in more than 7,500 cities worldwide and have enabled billions of dollars in booking revenue. The company provides data on Revenue per Available Night (RevPAN) 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.

ForwardKeys analyzes more than 17 million flight booking transactions each day, drawing data from all the major global air reservation systems, and selected airlines and tour operators. ForwardKeys is providing flight booking and passenger volumes 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