Amidst one of the most contentious elections in American history, the coronavirus is raging quietly across the entire country. As of Sunday, November 8, the U.S. surpassed another bleak milestone: 10 million Americans were infected by the virus. The number of new cases was rising in at least 40 states.
In our September U.S. travel tracker report, we warned that surging new cases and the end of summer vacation might bring the travel recovery to a halt. Our October survey confirms that prediction. According to our survey, 37.8% of Americans traveled in October, compared to 37% in September, indicating the smallest month-over-month increase since April.
We purposely fielded our October survey on November 2–4, before the election result was revealed, so we could take another pulse of consumer sentiment pre-election and compare it to our upcoming November survey to see if there are any major differences. Partly because of the continued uncertainty of the country’s political future, consumer sentiments changed little from the previous month.
In this report, we highlight new trends in travel incidences, consumer sentiments and future travel intents distilled from our October Travel Tracker survey.
What You'll Learn From This Report
- Travel incidences, Jan–Oct 2020
- October travel highlights
- COVID-19 impacted travel, Jul–Oct 2020
- Changing consumer sentiments on the economic outlook, Jul–Nov 2020
- Changing consumer intent on future travel, Jul–Nov 2020
Skift Research’s monthly U.S. travel tracking surveys are conducted to examine the travel penetration rates and detailed travel behavior of the U.S. population. The sample population represents the demographic breakdowns of age, gender, income, race/ethnicity, and residential location of the U.S. Census Bureau. Respondents are asked to report if they traveled in the previous month and recall travel-related details if they did. The January survey was fielded on February 25–28, 2020 with a total sample of 1,002. The February survey was fielded on March 12–16, 2020, with a total sample of 1,085. The March survey was fielded on April 8–13, 2020, with a total sample of 1,022. The April survey was fielded on May 7–11, 2020, with a total sample of 1,077. The May survey was fielded on June 1–3, with a total sample of 1,007. The June survey was fielded on July 6–7, with a total sample of 1,006. The July survey was fielded on August 3–5, with a total sample of 1,001. The August survey was fielded on September 3–4, with a total sample of 1,002. The September survey was fielded on October 5–7, with a total sample size of 1,007. The October survey was fielded on November 2–4, with a total sample size of 1,002. All surveys were fielded online by a trusted third-party consumer panel provider.
In addition to the factual travel occurrences, we also asked respondents their perceptions on the macro-level economic condition as well their personal financial and travel outlook. Given those questions reflect what respondents felt at the time of the survey, the date for those questions that we refer to in this report is the month when the survey was conducted, instead of the month when travel happened.
Highlights of October U.S. Travel
Travel Rate Barely Changed
With summer behind us and another surge of coronavirus cases across the country, the recovery path for the U.S. travel industry remains bleak. In October, 37.8% of Americans traveled, barely changed from 37% in September. Now that the election is over and we have a new President who takes the virus more seriously, there has already been a series of positive news in the last couple of days. President-elect Joe Biden formed a Transition COVID-19 Advisory Board to lead efforts in fighting the virus on Monday, November 9, the first day after winning the election. Coincidentally, on the same day, Pfizer announced a vaccine candidate that proved to be 90% effective. Responding to the announcement, stocks of major hospitality and event companies went up significantly, indicating investors’ confidence in people resuming in-person events once the virus is tamed. Will this lead to a bigger and better managed holiday travel surge, starting with the upcoming Thanksgiving holiday? We will have to wait and see.
Family Visitation Continued to Be the Main Driver
The decline of vacation share continued in October. Of all the trips in October, vacation accounted for only 31%, a further four percentage points slide from September. On the other hand, visiting families and friends continued the rise as a leading travel purpose, accounting for 38% of all trips in October. Business travel rates remained low.
Air Travel Still in Single Digits
Trips that involved flights went down further in October, with only 6% of personal trips taken by Americans in October including a flight. Business travel fared slightly better, with 23% of business travel in October including at least one flight. However, with the overall level of business trips remaining low, this number is not enough to make a huge impact on the decimated airline industry. Major U.S. airlines all reported dismal Q3 earnings. For instance, United Airline’s Q3 2020 passenger revenue was down 84% year-over-year and Delta’s passenger revenue declined 83% year-over-year for the same period. Airline executives don’t expect significant demand improvement before a widely available effective vaccine.
Small Town/Countryside Continued to Rise as Top Destinations
Destination shifts continued now that summer vacation is over. Beach and national parks, two of the most popular destinations in the summer months, continued the decline in popularity. On the other hand, small towns and countryside accounted for the largest share of destination types, with over a third of all trips taken in October going to small towns and countryside.
Sharp Increase in Hotel Stays
For the first time since the start of the pandemic in March, hotel stays went up significantly. Of all the personal travel taken in October, 56% had hotel stays, a considerable increase from 48% in September. This is only four percentage points lower than January and February, prior to the pandemic. We see this as a positive sign for the hotel industry. Part of the reason might be the high-profile marketing efforts on cleaning and social distancing by the major hotel companies, making consumers feel safe and comfortable.
The share of vacation rentals continued to drop, down from 11% in September to 9% in October. As we discussed in our September travel tracker report, the overall strong vacation rental market performance is largely driven by demand in rural and secluded vacation destinations and with the drop in visits to those places, the demand will be tampered.
Travel Cancellation and Rearrangement Remained Relatively Stable
As the virus-led uncertainty continues, travel cancellation and rearrangement numbers are still high across all categories. This will continue to add challenges for travel players seeking to accurately assess seats and rooms filled.
Highlights of November Consumer Sentiments
Outlook for the U.S. Economy Unchanged
As we mentioned earlier, we fielded the survey on November 2–4, before we knew who would win the Presidency. Fundamentally, the threat of the virus surge and the political uncertainty changed little from the month before when we conducted the October survey. As expected, consumer sentiments on the economy and their own financial condition hardly changed. Thirty-eight percent of surveyed American consumers believed the U.S. economy would be better in the next 12 months, only slightly lower than the 40% who expected the economy to be worse.
Outlook for Personal Financial Health Also Unchanged
At the personal level, 37% of American consumers expected their financial condition would be better in the next 12 months and 27% were concerned that they would be worse off financially.
Number of Consumers Expecting to Increase Travel Spending Rose Slightly
In early November, 32% of surveyed Americans said they expected to increase travel spending in the next 12 months, up from 30% in October. On the other hand, 25% expected to decrease travel spending, down from 27% in October.
Highlights of November Future Travel Intent
Consumers Concerns about COVID-19 Went Down Slightly
President Trump had tested positive for the coronavirus three days before we conducted our October survey, which likely drove up the number of people who were worried about the virus. Despite new cases continuing to rise throughout October, we see a slight decline in consumer concerns about the virus. Fifty-two percent of Americans in our survey were very concerned about the virus, down from 54% in October. And 40% of consumers indicated their lives were very much impacted by the virus, down from 43% from a month ago.
Expectation of COVID-19 Containment Unchanged
In total, 43% of the November survey respondents believed the virus to be contained by the first half of 2021, the same as the previous month.
Consistently for the past four months, more than a quarter of Americans surveyed indicated that life wouldn’t be back to normal until at least a year after the pandemic is over.
Travel Timing Expectation Remained Stable
The largest cluster of consumers, 25%, expected to travel again in 4-6 months after travel restrictions are lifted.
Expected Air Travel Rose Significantly
While road trips are still by far the most preferred trip type, the number dropped noticeably in November, particularly for longer trips that are more than 100 miles away from home. Twenty percent of surveyed American consumers indicated their expected first trip would be 100 or more miles away from home by car, decreasing from 25% in October. On the other hand, 20% of consumers expected their first trip to be 100 or more miles away from home by flight, up from 17% in October.
Number of Consumers Who Said They Would Change Their Travel Preference for at Least One Part of Travel Post-COVID-19 Remained Stable
The number of consumers who said they would likely change their accommodation type, transportation mode, and destination type remained stable compared to a month ago.