WiT speaks to Mark Meehan, Group Vice President and Managing Director, APAC, on how he sees the recovery for the region amid a new study that Travelport has just released.
Q: As we enter the third quarter of 2020, are you more optimistic or pessimistic about travel recovery than say 3 months ago? What signs of recovery are you seeing and what trends are you extrapolating from that?
Until a COVID-19 vaccine or effective treatment is found and distributed, we expect this to continue to be a slow, rolling recovery as restrictions are gradually lifted across the globe. That said, we are now cautiously optimistic that recovery has begun. For example, according to our recently developed Travelport Confidence Index, which is based on a proprietary algorithm that includes weighted metrics covering air and hotel search patterns as well as flight bookings, confidence in travel has increased every month for the last four months in a row.
In August 2020, the global Travelport Confidence Index score reached 20, a 12-point increase on the low of 8 recorded in April 2020. The highest confidence continues to be in domestic travel (32), followed by international travel (18) and intra-region travel (13). However, the volume of searches for international travel continue to outpace the volume of searches for domestic travel, signaling encouraging demand. The majority of searches for international travel are currently taking place four to eight weeks out.
While it’s impossible to predict exactly what the future will look like, the travel industry is incredibly resilient, and it will recover. Business travelers will return to visiting customers, and leisure travelers will find that urge to explore. We are continuing to invest in our business so that we are poised to take full advantage when travel returns.
Q: Clearly a GDS like Travelport is dependent on cross-border travel and domestic travel cannot be much of a revenue source – how are you adapting to a domestic world for now?
Domestic travel does constitute a notable proportion of our business, and we’ve been seeing that in our data. For instance, when Australia and New Zealand – which typically see heavy domestic travel – started easing domestic travel restrictions a few months ago, we saw a corresponding uptick in GDS bookings.
We have, however, made sure we’re supporting our partners in adapting to the changing environment as well. For example, we have rolled out a range of initiatives to help our travel agency partners benefit from higher demand for accommodation bookings. Also, earlier this month we supported Air India (AI) in launching its Maharaja e-SuperSaver fares, which promote domestic travel. These are flat-fee coupons, valid for multiple flights across nearly 200 different destinations, and allow for unlimited changes in date or destination, right up to 2 hours before departure. It’s a great example of an airline leaning in to changing booking patterns, and as AI’s sole distribution provider for domestic content in India, we worked with them to enable this extreme flexibility on the back end.
We’ve also been taking actions to support the industry as a whole recovery – both domestic and international – since the start of the year. These include:
- Smartpoint Plugin: In mid-July we launched a free COVID-19 Smartpoint plugin, which provides comprehensive information on travel restrictions across the world, updated daily. We’re seeing active usage every day, with over 92,000 launches of the plugin in the first few weeks.
- Airline Health & Safety Tracker: At the end of July, we followed up with a free Airline Health & Safety Tracker, which provides regularly updated information on the safety initiatives of more than 80 of the world’s largest airlines.
- RC&B: Some airlines are also using our Rich Content and Branding solution to communicate safety information with travel agents.
- Digital Media: Travelport has also worked with IHG, Marriott, and car groups to utilise descriptive space on the GDS screens to communicate safety information.
- Data: We are ensuring our customers receive access to all relevant data and have the capabilities in place to understand that data. This includes country specific data that shows which routes are being searched and booked the most by travellers, allowing our customers to focus on the right content at the right time.
There’s no one-size-fits-all solution to a crisis like this, and we’ve seen that the travel environment can change quickly in line with changing restrictions. We therefore think it’s important to adapt swiftly to current demand, while making sure you are positioned for what may come.
Q: The issue holding back travel appears to be more at the governmental level – with some governments choosing not to open borders and every country has different rules and protocols that are confusing travellers. What can the industry do together to make it less confusing for travellers?
Across the industry, we are seeing that communication is playing a critical role in rebuilding traveler confidence. Travellers, for example, understandably want to know what safety and hygiene measures travel suppliers like airlines and hotels have put in place, and what entry/exit requirements apply to their destinations, before they book a trip. Due to this, it is important that travel suppliers thoroughly document their safety and hygiene measures and communicate these regularly to agencies; so that agencies can in turn pass this on to travelers. Travel technology companies like Travelport can act as a conduit for suppliers to communicate safety and policy information through booking platforms and merchandising technologies, while providing tools to agencies that enable them to optimise their workflow, such as resources concerning travel restrictions.
Q: This article says a coordinated approach at a global level should be ready in four weeks. What’s Travelport’s role in a global, coordinated action in getting travel to reopen?
If we’re to see a safe, healthy and responsible return for travel, we believe the industry and governments across the world need to unite around a consistent set of clear, practical and meaningful protocols, which are backed up by medical evidence and give travelers the confidence they need to once again take to the skies.
The World Travel and Tourism Council (WTTC) took action on this earlier in the year by developing the Safe Travels Protocols for Aviation, and we are proud to have contributed to their formation. We have also been supporting other similar industry advocacy efforts, with both the WTTC and other industry organizations.
Q: Your study talks about the need for industry to put in place a set of 10 safety measures. Which countries are doing better than others?
The results of the study are based on a survey of 5,000 travelers across the United States, United Kingdom, India, Australia and New Zealand, as well as in-depth interviews with 29 leading travel suppliers. The study found that at all parts of the travel journey, it is deemed critical to have social distancing rules, mandatory use of face masks, and ready access to sanitizing gel or wipes, face masks and gloves. The study also revealed, however, that additional measures still need to be implemented by airlines, airports, hotels and car rental companies to fully restore consumer confidence.
On a country level, the study revealed demand for almost every safety measure is highest in India. Demand in New Zealand, while still high, tended to be the lowest across the five countries assessed. When it comes to age groups, demand for robust safety measures was again high across all categories, however, it was highest among baby boomers and lowest among millennials.
Over the last few months, the travel industry across the world has responded by rolling out many initiatives to support a safe, healthy and responsible return for travel. Many suppliers, such as airlines, have now already implemented the safety measures travelers say they need to book a domestic or international trip – but we still have a long way to go. Collaboration and communication are now key to restoring traveler confidence and securing a strong and responsible industry recovery.
Q: What are 2 key highlights you’d like to call out in the study? And what should industry do about it?
One of the key findings is that the 10 measures we’ve identified are all necessary, and must be in place at all parts of the travel journey. It’s a clear case of the chain being only as strong as its weakest link, and these findings speak clearly to the need for harmonized, industry-wide standards of the sort we ourselves, as well as organizations like the WTTC, have been advocating for.
Another important finding is that travelers are more likely today to book through a travel agent than before the COVID-19 crisis, with one-third (33%) of all travelers anticipating an increase in their use of travel agent services. Of these travelers, two-thirds (65%) said it’s because they feel travel agents are best placed to provide them with the latest travel safety information.
Naturally, travel agents can only provide travelers with safety information if this has been clearly documented, and then made easily accessible to them. Technology such as Travelport’s COVID-19 Smartpoint Plugin, which provides comprehensive information on travel restrictions across the world, as well as our Airline Health & Safety Tracker, which provides information on the safety initiatives of more than 80 of the world’s largest airlines, will be key to empowering agents in this regard.
Q: It is clear we will have a smaller industry after this – how does Travelport think about the future of distribution in Asia? How are you evolving your business in a future of fewer travel agents and fewer airlines?
Post COVID-19, we think that the travel industry will continue to experience rapid change. This transformation will be built on three foundational priorities for the industry: multi-source content, retailing excellence and maximizing the value of every trip.
- Multi-Source Content is all about ingesting, normalising and delivering access to a wide variety of content types, whatever the source.
- Retailing Excellence is enabled through next generation tools creating an environment of easy up and cross-sell, and flexible and customisable displays.
- And, by maximising the value of every trip travel sellers will grow revenue or reduce the cost to serve at every point across the trip.
Well before the crisis began, we had already started work on our next generation platform which will enable all of these priorities. While weathering through the crisis and looking towards recovery, we’re seeing that the value of our platform will be even more significant, and we remain laser-focused on its development.
Featured Image: Getty Images
