International Travel Recovery? Not so fast…

The short of it: International Travel Recovery will take longer than most people think

I believe we are a bit over-optimistic on when international travel will see a significant recovery. I suspect we will see the beginning of standardized global mobility guidelines towards the end of this year, implementing those in the first half of 2022 and international travel recovery starting in the second half of 2022 through 2024. Full recovery is likely years away. 

Some context

It’s not to say that people do not want to travel. 94% of respondents in a study by Hilton in October said they miss traveling. It is undeniable that there is a pent-up desire for people to travel again – including me. The wild-card is not the leisure traveling population who will take between one and four trips per year – possibly less in a post-Covid19 world, as costs can increase due to vaccination, testing, quarantine requirements. For international travel to bounce back, business travelers need to come back to the skies. 

According to the GBTA (Global Business Travel Association), business travel spend, will go back to pre-Covid19 levels by 2025. And according to ALTA (Latin American & Caribbean Air Transport Association), the recovery will take between four and six years, depending on the region. Business travelers will likely go back in phases. This McKinsey article illustrates the stages of business traveler recovery, with regional and domestic business travel returning first. International travel recovery will depend highly on standardized global mobility guidelines, contrary to the current environment, with disjointed quarantine, testing and vaccine policies, and complex government regulations. 

As of January 2021, Collinson’s lounge programs’ visit volume in the Americas has grown ~30x from the lowest point at the outset of the pandemic. That’s encouraging even though it represents a fraction of our pre-Covid19 volume. While that growth is stagnating, mainly due to recent travel restrictions and requirements, it is worth noting that in some ways, travel is seeing a small but consistent recovery. 

The path to international travel recovery

So we need standardized global mobility guidelines, but what does that mean exactly? These are some key points to consider:

• Testing & Vaccination
• Health Passports
• Travel Corridors
• Economics

Testing & Vaccinations

There is a lot of inconsistency around testing. 

• Should countries demand a negative test to enter their borders? 
• If so, should the traveler get a test before boarding a flight, when they arrive, or both?
• What type of test should it be? Molecular, Antigen
• If the test(s) is(are) negative, should the traveler quarantine or not?
• If the traveler stays for less than 3-days at the destination, do they need to get another test before flying back?

Currently, besides the first question, the answers can vary significantly. Until there’s a level of standardization and agreement on what type of test is required, when a traveler should be tested, and reducing or, better yet, eliminating quarantines, it will be difficult for international travel to come back. 

Vaccinations are finally happening, which is excellent, but generate another set of questions:

• If a person is vaccinated, does he or she need to be tested to travel?
• What vaccine(s) should be trusted (accepted)?
• Will the requirements be a combination of vaccination + negative test to travel?
• Will having a vaccine be a mandatory requirement to travel internationally?

Again, a lot of questions without clear answers, let alone broad agreement to facilitate global mobility. 

Health Passports

Recently, I attended a webinar about digital health passports. There were at least five companies in this event alone, providing excellent service: The ability to digitally carry your test and vaccination records to facilitate travel, events, dining, etc. 

The problem is the sheer number of solutions appearing in the market. It’s a good problem to have. Seeing all these companies doing great work is inspiring and necessary. However, all of them deliver the service in their unique way. To be clear, I am not suggesting that there shouldn’t be healthy competition to resolve this. I am saying that because there is no clear guidance on how we want our results to be stored, carried, and showed, we end up with fragmentation and solutions that will work in some instances but not in others. 

For example, do we want to link our health passport information to our airline profile, so the moment we check-in, a check happens against our health passport, and if we meet the requirements, we can check-in? Or do we want a paper record of our test/vaccination that needs to be stored by the airline or customs entity? 

We need to standardize the approach.

Travel Corridors

Let’s not be naive; finding consistency and standardization at a global scale for this will be nearly impossible. A sensible approach would be that governments, health authorities, travel associations, and airlines find ways to open their top corridors in each region. For example, the New York – London, Lima-Santiago, Hong Kong – Taipei, Cairo – Jeddah corridors represented ~16 million seats in 2019. Here’s a list of the busiest corridors in 2019. 

While some of those will be the most active in the new world, there should be a consideration for the new reality when determining which those top corridors are now and will be in the next five years. 

Imagine if we can standardize how we travel between the top-50 global international travel corridors. That would have a considerable impact on the recovery of international travel. 

Economics

Finally, we need to understand and find ways to standardize international travel economics in the new world. Achieving global mobility again will depend, in large, on who pays for what. There will be additional costs to international business travel, from travel interruption/quarantine insurance to testing and vaccination, and more. Therefore, who pays for what will significantly affect how quickly international business travel makes a comeback.  

Take testing and vaccination. If testing is mandatory, is the traveler supposed to pay for it? If the individual is traveling for business, is his/her company supposed to pay? In terms of vaccination, is that paid for by the government, covered by your insurance policy? Do companies make it a requirement for employees who travel to represent them? 

I presume we’ll see some questions answered in the next twelve to eighteen months. Also, many of these will be different in different countries, and even on how different companies address them, bringing fragmentation. 

How will airlines and hotels price their services in the new world? It is in their best interest to ensure people feel safe when traveling. Also that clients understand all the conditions required to travel to and from their destination. These will require a level of investment and integration to surface that information at the right time for clients. Are they going to pass that cost to clients? If so, by increasing the cost of their services? Or by adding surcharges? Will it become another thing that companies and TMC’s have to negotiate?

How about the impact of remote working? The last 12 months have forced most companies to function remotely. In many cases, the reality is that companies have done just fine without traveling and might make travel cuts permanent. However, that doesn’t mean that they are immune from the issue of international travel for their employees. Organizations that use generous paid time off policies to attract and retain talent will have to consider providing testing/vaccination as a benefit – since those generous PTO policies are not as attractive if you can’t travel internationally. 

What do you think? 

All the best, 

Jorge

PS. La version en Español está aquí.