Reinventing travel and hospitality with revival in consumer confidence

With nationwide lockdown restrictions eased over the past few weeks, early demand signals can be witnessed across the travel, tourism and hospitality industry. 

As per Deloitte’s ‘state of the consumer survey’ (conducted bi-weekly between April and July 2020), around 40 per cent of the respondents were actively searching for travel deals as many hotels and resorts are offering lucrative and discounted packages with the promise of best safety conditions. 

Additionally, overall consumer travel sentiment has improved by 4 per cent in July as compared to June with 44 per cent of respondents feeling safe to fly now and 40 per cent of respondents feeling safe to stay in a hotel. This can largely be attributed to the safety measures taken by the industry such as fixed occupancy in flights, contactless check-ins, enhanced sanitation procedures and various other measures taken. 

While green shoots are being seen at an overall consumer sentiment level with regards to travel, certain areas in leisure travel such as religious, wellness and culinary tourism are witnessing even more promising trends as follows:

* Consumers are increasingly preferring nearby destinations for leisure travel. 

* The preferred mode of transport being actively considered is self-driven (owned or rented) with almost 49 per cent respondents (compared to 43 per cent in the previous month) planning to use this mode for weekend retreats, non-metro gateways, and near-by religious sites once they start opening. 

* Rental seems to be emerging as a preferred option largely due to self-drive option, distancing from fellow travelers, short travel schedules, and the opportunity to move away from crowded metros safely and hassle-free.

* Intent to stay at hotels has also gone up by 14 per cent as compared to the last month with 42 per cent of respondents planning to travel and stay at a hotel in the next three months. This positive sentiment turnaround seems to be largely due to efforts on two fronts – consumer wellness and digitization. Hotels are seen to be adopting strict safety guidelines, partnering with sanitation players, and driving digital enablement of operations. Interestingly, over a third of the respondents plan to reserve private accommodation in the coming three months. Several travel platforms are offering city escapes and temporary accommodation in less crowded and scenic places to serve the dual purpose of retreat and workstation. 

* Confidence in travel also seems to be growing with 46 per cent of respondents (compared to 41 per cent in the previous month) showing an intent to take a domestic flight and over 40 per cent of respondents (compared to 34 per cent in the previous month) intending to take an international flight in the coming three months. This can be largely due to the increased coordination among airports, airlines, and government. Airports are seen to have implemented proper screening measures and hassle-free check-in. Airlines are flying at fixed occupancy with safeguards as deemed necessary.    

As one of the strongest expansion cycles in recent times in the industry came to an abrupt end, an era of significant challenges began. However, improved consumer sentiment seems to be providing an indication of early recovery signals into the recovery of the sector. While some of this might be pent up demand as consumers missed the summer holiday season, there is no doubt that sustaining this demand and going back to pre-COVID days is expected to be a long haul that would require continual focus from industry players. 

While on one hand, travel and hospitality players need to keep a high focus on safety and sanitation, on the other hand, they also need to invest in customized promotion and marketing campaigns so as to transform these sentiments into revival opportunities.