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, as we have added data for June 28 to July 4. The total available dataset now spans from December 29th, 2019 to July 4th, 2020 (weeks 1 to 27).

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.

Hotel revenue management specialist Duetto has joined the Skift Recovery Index, providing hotel booking and cancellation data to further strengthen our lodging insights.

We also continue to work with Amadeus, Arrivalist, Collinson, Criteo, Hotelbeds, Key Data Dashboard, OAG, RateGain, Shiji Group, SimilarWeb, SiteMinder, Skyscanner, Sojern, Transparent, and TrustYou as data partners for the Skift Recovery Index.

We remain open to adding additional partners, especially in the drive (car rental) and tours and activities space. Please get in touch at [email protected] if you’d like to contribute.

Finally Upward Movement in the SRI

After three weeks of minimal movement, the Skift Recovery Index has started to move up again. It currently stands at 40, representing a performance of 40% compared to the same time last year, and 22 points above the lowest point of 18 in early April.

Exhibit 1: The recovery index is on the move up again

This represents a 4-point growth compared to last week, and the two weeks before that. Over the past weeks, the recovery stalled largely by worsening conditions in the largest tourism economies, the U.S. and China, particularly. But China’s pace of recovery is increasing again.

In the U.S., meanwhile, recovery has completely flattened, despite an expected boost from the July 4th holiday. Clearly, worrying signs for the recovery ahead remain, and we will focus on the U.S. performance in this week’s analysis.

Exhibit 2: The U.S. now scores same as global average

U.S. economy feels the coronavirus impact

The main red flag is of course the continuing outbreaks of new coronavirus cases. July 8 saw a new daily high of 60,021 new cases and 1,195 deaths according to John Hopkins University’s coronavirus tracker. New case numbers are particularly high in Florida, Texas, Louisiana, Georgia, Arizona, and California.

This has already led to a reimposition of business lockdowns in some counties and states, which serve as a warning that the rest of the country could be revisiting its quarantine measures.

While most of our economic data is backwards looking, the damage caused by coronavirus lockdowns cannot be overstated. These shutdowns sent unemployment to the highest level since the great depression and caused our macro recovery component to plummet to a low of -35% in the first week of April. (That might not seem like a low figure compared to some travel-specific data, but keep in mind that this takes into account the full U.S. economy, both winners and losers).

A surprising source of strength throughout all of this has been U.S. consumer confidence. The federal government intervened with massive stimulus, writing checks directly and boosting unemployment benefits. Plus, many consumers found themselves with significantly fewer expenses. The ironic result is that the aggregate savings rate in the U.S. has never been higher.

However these benefits, and other indirect ones such as government subsidies for airline employment, are expiring at the end of the summer.

After an initial “V”-shaped recovery, the economic data has stalled since mid-May and the country finds itself at a tipping point. There are still signs of optimism as Americans travel for July 4th, businesses adjust to working remotely, and cities like New York, formerly a hotspot, slowly re-open. But these new cases with their resulting lockdowns and expiring fiscal benefits put the country at risk of falling backwards into a deeper decline.

Exhibit 3: Macroeconomic indicators fell by more than 35% in March

U.S. lodging fares well

Lodging has so far been a strong performer in the U.S. recovery. The country scores highest of all countries over the past weeks in total lodging performance.

Exhibit 4: U.S. lodging performance over past four weeks is strong

STR data on hotel revenue per available room (RevPAR) shows the weekly increase of this important hotel indicator, although the gap with 2019 levels is still large, and there seems to be a consensus amongst industry analysts that RevPAR could take a few years to bounce back to pre-coronavirus levels.

Exhibit 5: RevPAR still less than half at same time last year

Despite improving performance, hotels have been outperformed consistently since the crisis started by vacation rentals. A look at the combined search, booking, and stay indicators tracked in the index show that vacation rental performance was back to 80% of last year for the past week. Hotels trail, and while RevPAR continued to increase, hotel searches and future bookings were down in the week of June 28th.

Exhibit 6: Vacation rentals boost overall lodging performance

And there is further cause for caution. U.S. cancellations data from RateGain and Duetto shows that cancellation rates are creeping up again and are above 2019 levels for the week of June 28. Due to the lower amounts of bookings made over the past months, cancellations have generally been much lower over the past weeks as well. This trend has now reversed, and with that, the U.S. is the only country showing a significant rise in hotel cancellations. We should not write off the increase due to the holiday weekend, which naturally brings with it higher cancellations, but as coronavirus cases increase and more states start reintroducing restrictions, higher cancellations can reverse some of the gains the sector has made over the past weeks.

Exhibit 7: Hotel cancellations creep up again

Air travel struggles

Unlike lodging, which is showing largely positive signs of recovery week over week, air travel has remained stagnant in the U.S.

One of the most telling cases of where air travel is at the moment in the U.S. is the way United Airlines announced an increase in future capacity, and then slashed that extra capacity almost immediately due to lower than expected demand.

United told its employees this week that it will be flying 35% of last year’s flights in August, which is down from the 40% number it announced a week earlier in its securities filing. The airline has said that business is worsening as more big cities are reinstating restrictions.

Insights from the recovery index show that searches and bookings by U.S. residents have indeed remained low, with a slight decline in past weeks. There are minor fluctuations as the political and epidemiological climate continues to change.

Actual air performance, which is a bucket that includes seat capacity, load factors, passenger kilometers, and TSA throughput at airports, is showing a gradual increase, but overall performance levels remain below 30% of the same time last year.

Exhibit 8: Air travel isn’t seeing much growth yet

Holiday weekend boosts drive performance

Arrivalist, which tracks car journeys made in the U.S., noticed a surge in car journeys over the Fourth of July weekend, with levels only 9% below the holiday weekend last year. While this provides a snapshot of performance under special circumstances, drive has indeed been a bright spark since the crisis hit.

We have been saying for a few weeks now that we would expect drive to fall if flight goes up, but there is no sign of that yet, which means that the gap between drive and flight continues to widen.

Exhibit 9: Drive continues to outperform other verticals

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.

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.

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.

We would welcome more partners who want to join this effort, especially in the drive (car rental) and tours and activities space. Please get in touch to talk about a possible collaboration.

Data Tables