Why it is not too early to be looking at reserving your future trip
There is no doubt that 2020 was a disastrous year for the travel and hospitality industry. The pandemic caused countries to shut their borders, carriers cancel whole routes and ground fleets, and customers to cancel holidays in masses.
Air travel dropped by nearly 95 percent compared to the passenger numbers seen in 2019 and many airlines have pivoted to convert their aircrafts to carry cargo as demand skyrocketed for the shipping of goods and medical supplies globally.
In response, the travel industry contracted hard, with air carriers laying off staff and grounding fleets. Many aircrafts have been sent in pre-retirement or parked in the Nevada deserts until sunny days are back again.
Hotels and resorts were also shuttered, and their staff furloughed or laid off.
In 2021, conditions have changed slightly with the announcement and limited deployment of several vaccines that has reignited the prospects of being able to travel again. However, the travel industry is nowhere near recovering which, conversely, makes now one of the best times for you to book your future holidays!
Let’s face it, not many people are in the mindset of booking their future travel for the time being. The vaccine roll out is hitting some snags and the jury is still out on how effective they are on new “variants” that are now said to spread much faster.
It is against this backdrop that the airlines, hotels and resorts are attempting to draw customers back in. Not only have prices dropped but travel suppliers have made their cancellation policies a lot more flexible. Airfares, in particular, have seen massive price drops as airlines cut ticket prices across a huge range of destinations.
Both domestic and international airfares have plummeted, with some airlines offering flights to South America and Europe at half the price they were in 2019. In the U.S. domestic airfares fell nearly 30 percent to the lowest level in 25 years.
These price cuts can be seen extending out to summer 2021 at the moment.
The same pricing model applies to hotels and resorts in many destinations. In line with many of the current social distancing restrictions, many hotels have had to close their doors.
In order to mitigate current losses, room prices later in 2021 are being slashed to draw in deposits now.
Flexibility Has Never Been Higher
With no unified policy for the easing of pandemic restrictions, many passengers are worried about booking flights and hotels, only to lose money if their trip is cancelled.
In reaction to this, airlines, cruise lines, and hotels have significantly increased the flexibility of booking policies.
Many airlines have moved to temporary policies that allow customers to book flights now, in a certain date range, and cancel or rebook them as close as two hours before departure.
Under Air Canada’s new policies, customers can make a one-time change without a fee for all new or existing bookings made through February 28, 2021, for original travel between March 1, 2020, and February 28, 2022.
If you booked directly with Air Canada and you need to cancel for any reason, you can convert your ticket to an Air Canada Travel Voucher that has no expiry date or to Aeroplan points with an additional 65% bonus Aeroplan points. (See our blog about Travel Vouchers here)
WestJet’s policies state that all flights booked between March 3, 2020, and February 28, 2021, will be allowed a $0 one-time fee waiver for changes or cancellations. Changes or cancellations must be requested more than 24 hours from departure.
The value of cancelled flights will be returned as a Travel Bank credit, valid for 24 months from the date your flight was cancelled. If you change your flight, the difference in fare applies. If the new fare is less, the difference will be returned as a Travel Bank credit
It Won’t Last Forever
While prices are currently at an all-time low and flexibility is at an all-time high, there is a ticking clock on these conditions.
American Express has already predicted that there will be an uptick in holiday travel during summer 2021, driven by more widespread vaccination programs. The average international traveller will have more accumulated time off in the bank and will also have more disposable income in it too. Spending on holidays, since they haven’t been able to do so in a while, will be high on the do list as soon as a clear path forward is shown for the reopening of travel.
This will drive airlines towards what is called an “inflection point”, where demand starts to exceed the number of seats available.
After this inflection point, the demand for leisure travel could return to as much as 90 percent of pre-pandemic levels. However, most carriers won’t be able to pivot back to that level of demand, although many are not quite admitting to that yet.
As we’ve already mentioned, many airlines have grounded all or part of their fleets and laid off or furloughed trained staff. In the short term, planes will need to be refitted and staff will need to be, at best, retrained, and, at worst, rehired.
In the long term, this will drastically drive the prices of travel upwards as the demand for flights and accommodation will eventually exceed the available spaces.
Travel prices are currently at a historic low, but there’s an inflection point on the horizon. After that point, where demand outstrips supply, prices seem set to skyrocket.
So, if you are looking to book a holiday to soothe your travel blues or visit family ,planning now just may save you money and offer you the options you want at much better price points than ever before.