ANIXE Insights: Vacations in bloom. The spectre of a fourth wave of the epidemic cools the mood
The year 2021 certainly has the potential to be a landmark year in the fight against Covid. We finally received the vaccines. By vaccinating, we can freely travel and rediscover the world, which has ultimately helped revive the tourism sector. Unfortunately, a surprisingly large percentage of people are reluctant and afraid to receive the shot, which means that some countries can’t achieve the much-desired herd immunity. Meanwhile, the fourth wave of the outbreak is fast approaching, slowing down the momentum of travel bookings.
It's been 1.5 years since the arrival of the virus, wreaking havoc, limiting our freedom, and affecting our businesses, relationships and stress levels. Last year we dreamt of the vaccine; this year, many of us are running in the other direction. How ironic. A snapshot of the complex nature of humanity and a situation that prevents us from returning to the normalcy we once knew… just two years ago. Conspiracy theories and the media have some people believing there's a lot more to what's going on than just vaccines. Who is to tell if they're right or wrong?
But, without vaccinations, we can forget about travelling and going out to restaurants and nightclubs. Some European countries like the Netherlands have utilized a mobile application where each vaccinated person receives a unique QR code that is scanned before one enters any public space.
Without vaccinations, we are experiencing a sinusoidal dance cycle of restrictions being lifted and reimposed. Some countries are shutting down as others open their doors. ANIXE's complex market data shows that people dream of travelling; they search for their dream vacations. But book them a lot less frequently. Local outbreaks and prevention programs by local governments are making travel more complicated and often impossible. This presents a decrease in the activities of bookings and results in excluding some destinations from the travel map. This gap is not always filled because instead of choosing other destinations, people sometimes go for plan C... "staycation!".
Yet, the world is moving towards vaccine passports. These documents will open hotel and restaurant doors, allowing you to board a plane or bus. Of course, this is a bleak scenario for the near future... but what does the present look like? The present is beautifully illustrated by data from the aggregated output of travel agencies, tour operators, and OTAs conducting business through ANIXE's Resfinity Booking Engine system.
July was another month of the tourism boom. Big, but no longer as spectacular as June 2021, in which the increase in global bookings was nearly 75% higher than the bookings of the equally stunning May 2021. In Germany, the level of bookings even reached 80% of the June 2019 level. July 2021, while still impressive, indicated a 23% slowdown in monthly booking activity, with the result falling to 63% of the level of bookings produced during the corresponding period in the pre-Covid era in July 2019. The results, although slightly worse, nevertheless are an apparent recovery for the travel industry given the results from last fall and spring.
Despite vaccinations and the loosening of restrictions, the uncertainty resulting from the fourth wave of the epidemic has affected the destination choices of German tourists. As a result, we've started to travel shorter distances again, often with our own mode of transport. In July, the Germans decided on Germany, Turkey, Greece, Spain, and Italy. However, the pandemic has dramatically reduced the popularity of Spanish and French destinations, which were an absolute hit in June 2021 and July 2019 in favour of domestic destinations.
It is worth noting the high popularity of destinations in the Netherlands and Greece, whose share of total bookings in ANIXE Resfinity IBE far exceeded 2019 demand. On the other hand, Spain, the USA and UK, which were among the most popular in July 2019, are at a low booking level and seem still the most affected by the government regulations and bans against travel.
The coming summer has encouraged German travellers to make reservations in the popular Turkish resorts of Antalya and Gazipasa. The Greek resorts of Rhodes and Heraklion were also highly-rated, but the most significant increase of interest was in Germany's non-holiday regions: Hamburg, Munich, and Berlin.
Despite its still high popularity, the share of Palma de Mallorca has more than halved compared to June 2021 or July 2019. The pandemic has marginalised popular July 2019 destinations like Paris and London to virtually nothing for the British region.
German travellers' four most popular destination cities in July 2021 are Side, Hurghada, Berlin, and Rome.
Compared to the situation two years ago, i.e. July 2019 - the most significant increase in holiday popularity was in Hurghada and Side. On the other hand, the most considerable decrease in share on Resfinity Booking Engine was in London and Playa de Palma.
Germans prefer trips of around a week in length. This situation has remained unchanged since May 2021, when there was a shift from the dominance of short trips. Nevertheless, the spectre of the fourth wave of bookings is somewhat dampening the optimism of bookers. The share of longer bookings is beginning to give way to shorter stays. However, these are still mainly tourist stays, not business stays.
Online meetings have replaced business travel - this is a fact of modern times. The new reality is visible in numbers compared to the same period in 2019, before the pandemic. The percentage of bookings of up to 4 days stay, which reigned supreme in then, is now 20% lower on average and has given way to slightly longer leisure trips.
Nevertheless, data from ANIXE's Resfinity Platform shows that we do not feel so safe. We are far less likely to book trips more than one month in advance, evident both on a monthly basis and from a 2-year perspective. We are more focused on bookings 4-14 days in advance. Spontaneous trips, on the other hand, have a marginal share.
The spectre of the arrival of the fourth wave of the epidemic is changing the latest trends by impacting the guest group's size profile change. Compared to July 2019, there are nearly 11% fewer single-person bookings, although the number has started to increase significantly in the last month. In contrast, the number of multi-pax bookings (4 pax and above) has begun to decline in the month before, although its share is still 20% higher compared to July 2019.
ANIXE’s data shows that the threat of Covid’s 4th wave caused distancing from hotel food. The share of BB (Bed and Breakfast) bookings in July 2021 increased by more than 24% to the detriment of HB (Half Board) and AI (All-Inclusive) compared to June. Despite the recent increase in demand, the share of BB and RO (Room Only) bookings remains 10% lower compared to July 2019. At the same time, the interest in SC (Self Catering) type bookings remains at a marginal level showing a decrease of nearly 90% compared to the situation two years ago.
As for pricing, after long stagnation due to lockdowns and a decline in hotel demand, prices have begun to rise again. In May 2021, the surge began. Despite a slight decrease in the value of bookings made globally, we see an upward trend of over 30% over the two years.
Last year's data and this year's direction, which have been consistently confirmed month after month, have clearly shown that the travel market has the potential to regenerate quickly. But, unfortunately, it also reacts quickly with declines wherever a pandemic situation breaks out and local governments implement their restriction programs.
Demand for backlogged travel is vast. Fortunately, the number of people vaccinated is increasing, so travel will follow a long-term upward trend. People no longer want to wait. They want to enjoy adventures, experiences and exploration.
How long will the tourism sector continue to grow? Which countries and resorts will offer the best deals for tourists? We look forward to bringing you more data and insights.
Stay tuned. Stay safe. Plan your holidays.
(Data origin: ANIXE Resfinity Booking Engine. Data originated from the ANIXE Resfinity IBE system.)