Domestic Travel is on the Rise

By Adriaan Brits Friday, August 7, 2020

The $9 trillion global tourism and travel industry has been suffering recently, with projections by the World Travel and Tourism Council (WTTC) signaling a 40% annual decline, or approximately $3.5 trillion, in a report published in June. 

Despite the staggering losses, reports by the World Tourism Organization (UNWTO) suggest that the sector is starting to regain momentum in some areas, especially in the Northern Hemisphere.

Why the Increase?

After months of inactivity, it seems that travelers are roaming again. However, they are not going too far as few have the power to go to faraway destinations. This has been a welcome relief to local tourism industries. 

The recent break from activities centered around outside activities seems to have left people with a pent-up desire for travel. Andreas Papatheodorou, an economist at Greece’s University of the Aegean with a specialty in tourism, believes that “travel will rebound sharply because people would like to celebrate a return to normality.” 

This rise in domestic travel won’t wholly cover previous revenue, but it’s a vital improvement on the months with practically zero travel spending, according to economists and businesses.

Where Is This Upsurge Most Pronounced?

This increase is most evident in Asia, and Europe is following closely behind. Although some domestic travel resumed in the US, original eagerness soon waned. 

For example, Coronet Peak ski resort in Queenstown, New Zealand, recently clambered to hire additional staff as locals descended on the area’s unspoiled snow-capped mountains. Nigel Kerr, Coronet Peak’s ski area manager, says that in the space of a couple of weeks, the number of staff swelled from 100 to 160. Mr. Kerr expressed his surprise as the country remains mostly closed to foreign travelers.

The Effect on Well-Known Tourist Companies

Chris Lehane, the global policy vice president of Airbnb, has revealed that bookings were currently at the same level as last year; however, 90% of the travel is now domestic. 

Airbnb recently exceeded one million global bookings in one day, and in fact, this was the first time since March that these kinds of numbers had been recorded. Lehane theorizes that “people are using the money they would be saving from airfares to potentially get bigger accommodations,” adding that several people were making bookings for several trips spanning the summer. 

In May and June, Hyatt Hotels Corp. also noted that occupancy rates in Shanghai and five other Chinese cities had increased from the previous year; this occurred even though Beijing’s borders remained primarily shut. 

In the UK, Sykes Cottages Holdings reported a 159% upturn in property rentals across the country in recent weeks against the equivalent time period in 2019. Graham Donoghue, CEO of Sykes Cottages, believes that “the months ahead are set to be extremely busy, with properties booking up fast and Brits eager to take a much-needed break.”

What More Needs to Be Done?

The increase in domestic tourism has been a savior to many local tourist organizations and some big ones. However, more is needed in the global setting. The WTTC has outlined the extensive and swift measures required to sustain the travel and tourism sector. 

The WTTC also urges governments to employ policies that will directly sustain the industry across three areas. These include:

  1. Protecting the employments of workers: This aid should be offered in monetary terms to safeguard the earnings of the millions of workers who are suffering financially.
  2. Fiscal support: It would be helpful if governments prolong fundamental, unlimited interest-free loans to global travel and tourism businesses and the millions of small and medium-sized companies as a stimulus to avert bankruptcy. Government dues and financial burdens on the travel and tourism sector should be relinquished straightaway for, at a minimum, the next 12 months.
  3. Injecting Liquidity and Cash: Cash flow support to those involved in the travel and tourism sector, both big and small. This, in addition to targeted support to harshly affected industries within the sector, is essential.

About the Author

Headshot for author Adriaan Brits
As an analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in Advanced Analytics & Media.

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