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Dramatic changes in consumer behavior during the coronavirus pandemic have been hurting companies’ profits and sales. One of the most troublesome new consumer behaviors is engaging in short bursts of booking travel online.
McKinsey & Company has been studying travel search and booking data to detect patterns. The consultancy believes that nimble suppliers and resellers will gain if they adopt more nimble marketing and pricing strategies to cope with the new realities.
“We’ve seen sudden shifts in consumer sentiments about the attractiveness of different destinations based on new information,” said Nina Wittkamp, a Munich-based expert associate partner for McKinsey. “We’ve seen literally overnight jumps in booking volumes when governments lift pandemic restrictions affecting travel to popular destinations.”
“Hotels, destination marketing companies, and especially airlines have been quite focused on perfect forecasting,” Wittkamp said. “So many of them have been struggling to be agile. But the moment when, say, a significant country announces a change in its travel restrictions, is the moment to be present with marketing messages, promotions, etc. At least respond within 48 hours.”
McKinsey got access to search and booking data with help from companies like travel price-comparison service Trivago. When Germany announced the lifting of its travel restrictions, surges of about 30 percent in booking search volumes happened on the day for travel to many popular destinations in the near-term.
In some other markets, the surges are more significant for accommodation than for plane tickets, given that some consumers still lack the confidence to fly.
“Any changes in travel restrictions, whether it’s lifting or reimposing quarantines, travel bans, etc., can move consumers — who have a lot of pent-up demand,” Wittkamp said.
Bursts in Booking
McKinsey isn’t the only company to see the pandemic’s imprint on consumers’ spontaneous travel search behavior. Aviasales, an online travel group that serves Russia and other neighbors and Central European countries, has seen similar bursts of booking behavior.
On July 24, Russian Prime Minister Mikhail Mishustin said that international flights could once again operate from airports in Moscow, St. Petersburg, and Rostov-on-Don. Within an hour after the announcement, the number of search queries on Aviasales rocketed, with interest in Turkey tripling. The U.K. rose by five times, and interest in Tanzania increased by 70 times.
For more context, see Skift’s story earlier this week: Tourism’s Jagged Reopening May Be Worse Than Not Reopening At All.
Fanning the Flickers of Optimism
McKinsey tried to grasp why today’s consumers find some destinations more attractive than others beyond the lifting of travel restrictions.
“The prices that consumers have been clicking to book have still been relatively high, on average, even if down somewhat, year-over-year,” Wittkamp said. “In many European countries, you still have job protection programs or high disposable income or income supplements. So the willingness to pay for a trip is still there because they want to treat themselves.”
The consultancy shared some of its lessons from the German travel recovery, in particular, in a report last week. Germans have adjusted their list of most-attractive destinations, with many substituting their former favorite spot Italy with alternatives.
McKinsey looked at many markets worldwide. It found that it might prove a real competitive advantage for a company to spot periodic bursts in bookings and react fast.
“We’ve seen some of the low-cost carriers in Europe and the U.S., for example, take some signals they heard in the market and then launch more service on more routes faster than their legacy competitors,” Wittkamp said. “That could pay off for them. Other travel sector players could learn from that.”