Patience doesn't always pay
The travel recovery is happening faster than expected in some places, new research suggests. Are discounts on their way out?
The travel industry's recovery may be happening much sooner — and much faster — than anyone expected.
Take vacation rentals, for example. Despite the pandemic, they had a 46 percent occupancy rate last year, up 2 points from 2019, according to Key Data, a vacation rental software company.
That makes some sense: Many travelers thought rentals were a safer bet after the outbreak.
New research says the trend will continue. The latest numbers from Mashvisor suggest that by September, Airbnb occupancy rates will be back to normal and prices will be significantly higher than in 2020.
That stands in sharp contrast to The US Travel Association's prediction that the travel industry won't return to pre-pandemic levels until 2024. Something tells me that projection is a little off.
But why should you care? Because it's travel planning season. And some of you, my friends, are still on the sidelines. That's understandable, given the surge in COVID cases and the craziness in Washington. And sure, there's a vaccine and a promise of a more stable political situation, but you're probably still nervous. (I am.) What to do?
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Everything will be back to normal by September
The national Airbnb occupancy rate will gradually improve each month in 2021, according to Mashvisor.
But some Airbnb markets have already bounced back. Reno, Kansas City and Detroit are already fully recovered in terms of occupancy rates. Next month, Sioux Falls, S.D., and Baltimore are expected to be back. On the other hand, markets like Miami, Phoenix and Honolulu will take longer than 11 months to return.
How about rates? They're going to be significantly higher.
Some industry segments are still in the dumps
But what about the rest of the travel industry? Hotels are still suffering while airlines are showing signs of life. I just did a deep dive on the uneven recovery. And December's jobless numbers, released just this morning, are pretty depressing.
No one said this was going to be easy.
I've had numerous conversations with travel industry insiders in the last few days, and they're telling me that overall, bookings are stronger than expected. Until now, conventional wisdom has reflected the U.S. Travel Association's pessimistic outlook. But I think this is one of those times when experts hope they're wrong about something. No one wants 2021 to be a replay of last year. (They needn't worry; it almost certainly won't be.)
The takeaway for your next getaway
When you start to put together all the pieces of the recovery, an interesting picture comes into focus. We've seen very aggressive discounts at the beginning of 2021, such as Southwest Airlines' $29 fare sale.
But those low prices will soon yield to reality, which is that in a post-vaccine world, people will be paying more to travel, including higher nightly rates for their vacation rentals. It's just a matter of time before hotel rates, car rental prices, and yes, even cruise fares, catch up.
I believe it'll happen sooner than you think. I watched rates bounce back after 9/11 and other crises. Inevitably, the recovery takes people by surprise.
But that's not going to push me out the door any faster. I'm locked down in Arizona, the epicenter of the current COVID-19 outbreak. It's still not safe to travel. You do not have my permission to go on vacation yet.
So here's my advice: Brace yourself for a time in the not-too-distant future when everything goes back to the way it was, in terms of prices, and most importantly, booking restrictions and cancellation penalties.
All that talk about the permanent removal of ticket change fees? Don't believe it. Airlines will come up with some other way of separating you from your cash. They're so good at that.
Bottom line: Don't wait too long to book your next vacation. Patience doesn't always pay.
Are you thinking about traveling somewhere? If so, where and when? And when do you think travel prices will fully recover to their 2019 levels? The comments are open.