This is a contrarian story about travel

All those rosy 2021 predictions are wrong and here's why

Everything is not about to return to normal — at least when it comes to travel.

If I see another headline that says, "Travel is coming back!" or "Don't wait to book that summer trip!" I'm going to be sick. Anyone who tells you that in a few months we'll be traveling as if nothing ever happened is seriously misinformed.

Fact is, people are as worried as ever about the pandemic. The future is unclear, and many travelers are planning to stay home, not just this summer and fall, but all year. So let's unleash our inner contrarians and find out what's going on, and how it will affect you in 2021.

Consumers are still nervous

Let's start with a bird's-eye view of the economy. The Consumer Confidence Index (CCI) declined in December. And in November. The Index now stands at 88.6, down from 92.9 the previous month.

Lynn Franco, the senior director of economic indicators at The Conference Board, says consumers’ assessment of current conditions "deteriorated sharply" in December as the pandemic spread unchecked.

"Overall, it appears that growth has weakened further in the fourth quarter, and consumers do not foresee the economy gaining any significant momentum in early 2021,” Franco added.

Ah, but that's December. (The next CCI is out Jan. 26). What about now?

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Well, here's what now looks like.

This is the University of Michigan's consumer sentiment. It fell to 79.2 in January, from the previous month's 80.7 and below market expectations of 80. Experts blamed the horrendous rise in COVID-19 deaths, the storming of the Capitol, and the impeachment.

Bad — and getting worse.


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"Clouded in uncertainty"

Even travel industry boosters like Travel Again, an organization dedicated to restoring confidence in traveling, are having some trouble seeing the bright side. Travel confidence among leisure travelers dropped from 2.63 to 2.61 (on a scale of 5) between November and December.

"With overall traveler confidence reaching a very low, but plateaued level, the future of travel remains clouded with significant uncertainty,” says Travel Again cofounder Mike McCormick.

Even worse, business travelers feel just about the same.

No, people are not traveling again

All that talk about a massive surge in travel later this year may be a fantasy. Digital marketing agency AccuraCast asked customers what they would look for in a travel insurance policy for this year. To their surprise, 42 percent said they didn’t plan to travel at all in 2021, so they wouldn’t have any need for travel insurance. 

The 65-plus group was the most travel-shy, with roughly 50 percent saying they were staying put. Respondents between the ages of 18 and 24 were most likely to travel (64 percent).

“The travel industry has already taken a massive hit from COVID, and the results of this survey show that 2021 isn’t necessarily going to get any easier," says Farhad Divecha, managing director of AccuraCast.

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What this means for you

I hate to rain on the parade of the optimists, who are cheerfully predicting an imminent rebound in travel. I say that because I am an optimist, and I want what they say to be true. (I've been supportive of their cause in this newsletter.) But it isn't. This recovery could take longer — much longer — than anyone wants.

How does this affect you?

  • If you've already had the COVID-19 vaccine, you have a few months to take advantage of what are certain to be some spectacular travel deals. All-inclusive resorts, flights and cruises. Especially cruises. If you've had your shots, you can save some serious money on travel now.

  • If you're unvaccinated, you might want to wait until mid to late summer to plan a trip. Try to get the vaccine in the meantime. If you do, you can surprise yourself with an early vacation.

  • This could affect your travel company even more. The lack of travel confidence will continue to put airlines, hotels and tour operators under a lot of financial stress. Expect a bankruptcy or two — or more. Monitor the financial health of your company. And always consider travel insurance from a third party. You don't want to fly on an airline that goes all Chapter 7 on you.

In short, the long, slow recovery could help you save money and have a better vacation. But you need to be careful. And note that I haven't given the all-clear to travel yet. Even if you've had your shots, you still have to practice social distancing and wear a mask. 

I know, that's not much of a vacation. But at least we live to travel another day.

How about you? Are you ready to travel again? What does your inner contrarian say? The comments are open. 

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