Analysis: What's in store for travel in the year ahead?

Fortunately, with Covid-19 vaccines already being rolled out in the UK, there  is reason for optimism for the  industry (despite the latest  lockdown), although the road to recovery is likely to be bumpy for some time.

Of course, it’s not just  the pandemic that’s  going to make 2021 a  unique and strange year.  There’s the impact of Brexit,  now the transition period  with the EU has finally ended,  and all the uncertainties – and perhaps even opportunities – that creates.

We look at some of the factors that will likely shape 2021 as travel looks to bounce back from a truly horrendous 2020.

NEW NORMAL

Even with several Covid vaccines being rolled out in the UK and around the world, travel is not going to look anything like normal for the next few months, and possibly throughout the whole year.

As part of the latest national lockdown in England you must not leave home including to travel abroad, unless you have a legally permitted reason to do so.

With infection rates rising rapidly in the northern hemisphere winter, it may not be until spring that we start to see a real easing of Covid travel restrictions, which means travel corridors and a (thankfully now shortened) quarantine period are likely to be here to stay.

The government has announced a pre-departure testing requirement for UK arrivals, which comes into force on Friday (15 January), but the scheme sits alongside quarantine rather than replacing it. A number of airlines and airports have introduced their own initiatives, such as Virgin Atlantic’s pre-departure Covid testing trial on flights between Heathrow and Barbados.

Foreign Office (FCDO) travel advice has also been the subject of much criticism from the industry. Abta and Tui recently called for a review, saying it “risks preventing the industry getting back on its feet and holidaymakers back in the air”. 

But what happens in the UK is only part of the story, with travellers facing a myriad of restrictions and requirements depending on their destination. With the global roll-out of vaccines likely to be uneven, this will put the focus on pre- arrival Covid testing.

Requiring holidaymakers to take expensive private Covid tests has been another disincentive to travel, but hopefully prices will continue falling while destinations are becoming more flexible in the type of test they will accept. The Canary Islands, for example, began accepting cheaper and quicker antigen tests as proof of Covid-negative status.

Further down the line, there could  be potential issues around whether travellers have been vaccinated or not – although Tui has already insisted it would not turn away unvaccinated passengers.

POST-BREXIT TRAVEL

If the ever-shifting range of Covid restrictions weren’t disruptive enough, British travellers to the EU now face  a new entry regime when visiting most European nations. However, at least a dreaded “no-deal” Brexit was averted by the UK-EU trade deal just before Christmas.

New requirements include having passports with at least six months of validity, extra driving documents  and the end of the Pet Passport scheme. The European Health Insurance Card (Ehic) will continue to be valid in EU countries until the card expires, with the UK government having launched a new Global Health Insurance Card (Ghic) as a replacement. 

Brits can now only spend up to 90 days in any 180-day rolling period in EU countries unless they get a visa,  but there are different rules for visits to Bulgaria, Croatia, Cyprus and Romania.

The trade deal also thankfully ended fears that UK-EU flights could have been grounded from 1 January 2021.

CRUISE RESUMPTION

The constant rolling cancellations and delays to the restarting of most cruise operations was one of the more depressing aspects of 2020, alongside the FCDO ban on ocean cruising, first implemented in July. Last month, key figures within the sector said they had agreed a “multiple phase” return with the Department for Transport.

Most UK-orientated cruise lines are currently looking at resuming itineraries in the spring, so hopefully as more people are vaccinated  – particularly in the key  over-65s demographic  – these dates won’t be  further pushed back.

Despite cruise  being singled out for  negative publicity  during the early stages  of the pandemic, there  are reasons for optimism,  with consumers still determined  to get back onboard. Abta found that 58% of people would be interested  in an ocean cruise, with bookings for departures in 2022 particularly strong.

When ex-UK cruising does get going again, passengers will have plenty to look forward to with the delayed launch of P&O Cruises’ Iona – the largest ship ever built for the British market – and Saga’s second new-build ship, Spirit of Adventure, taking to the seas this year.

Meanwhile Fred Olsen is adding two new ships – Borealis and Bolette – replacing Black Watch and Boudicca.

Further afield, Virgin Voyages should finally make its debut in May with Scarlet Lady sailing from Florida to  the Caribbean.

EVENTS AND EDUCATIONALS

While most industry events and conventions have been “virtual” during 2020, this year should eventually see the return of more in-person events. Although many are likely to continue to feature virtual contributions and attendees, as the pandemic continues.

Those planning to take the plunge and hold events in spring 2021 include homeworking firm Designer Travel hosting its overseas conference on Spain’s Costa del Sol in April.

In October Abta plans to hold its convention in Marrakech, which had been due to host the 2020 event. 

While some enterprising travel firms and destinations were able to host a limited number of fam trips in 2020, this year should see the return of the educational as tour operators and tourism offices seek to get agents out to their destinations as Covid restrictions eventually relax.

INDUSTRY CONSOLIDATION

There’s pretty much universal agreement across the industry that further company failures are “inevitable”, particularly if the current peaks selling season fails to bring in the hoped-for volume of bookings, and the UK government continues not to offer sector-specific financial support.

Finance specialists have suggested M&A for outbound travel  companies will pick up  this year. Although mostly through trade sales as companies “in distress” are snapped up for a bargain price by their competitors as a way of driving more consolidation.

WILL THE PRICE BE RIGHT?

One of the most fascinating aspects  of 2021 is what will happen to holiday prices and availability, particularly with so many people deferring their 2020 bookings to this year.

Some have suggested availability may be a problem this summer in key hotspots, and this could be a strong sales message to get customers to book, with agents telling clients they need to move quickly to secure the holiday they want.

In December, Tui reported summer 2021 bookings were up 3% on summer 2019 with prices rising 14% year-on-year, bolstering hopes that “pent-up demand” will fuel a recovery this year.

Other factors that may impact prices include the 8-10% cut in cruise capacity this year, with older ships leaving fleets in 2020, while the expected continuation in lower levels of business travel may force some airlines to push up leisure fares.

Price increases could also be a positive sign the industry is on the road to recovery.