2. We will demand more flexibility
The days of high cancellation costs are surely numbered. To win business, operators and airlines will – as many are already doing on a temporary basis – have to offer much more flexibility for those who need to change their plans after booking.
3. We will rely more on tour operators
Despite the huge reputational damage the travel industry has suffered over its failure to offer timely refunds for cancelled holidays, I think that the financial protection which tour operators ultimately offer and the fact that they have to take responsibility for all your travel arrangements, will prove hugely reassuring in future. Independent travel will still be important, but the balance will shift back in favour of package holidays.
4. Luxury will cost less
It remains to be seen how the cost of travel will change overall. There may be bargains in the short term, but in the medium term there will certainly be less choice, less competition and travel companies will be desperate to rebuild their profit margins. Those factors will all push prices up, though if the oil price stays low, that will help keep airfares lower than they might be.
However, the demise of business travel will have a different effect on the hotel and airline industry. Companies will not want to spend anything like as much as they used to on shipping their employees around the world when they can stay at home, or in the office, and meet up on Zoom.
That’s a big cost saving for some business, but a huge revenue hit for airlines and hotels, especially at the five-star, club-class end of the market. Many long-haul airlines depend on the profits from their business-class cabins, and upmarket city hotels rely on the revenue they get from Monday-Thursday business.
So two things will surely happen. While upmarket resort hotels – which offer more than the average amount of space and seclusion – might be able to keep their rates high, five-star city hotels will be forced to drop their prices and, as a result, their service standards. There will be fewer staff on hand to attend to your needs, rooms won’t be refurbished so often and that breakfast buffet won’t look quite so tempting as it used to. Meanwhile, on airlines, business-class cabins will shrink and seats will become cheaper – or subject to regular offers – and premium economy, aimed at better-off leisure travellers, will be expanded.