August is normally a bumper month for destinations in the northern hemisphere. The fact that the Skift Recovery Index remained flat indicates that seasonality is still in play even today, and that travel volumes have indeed increased over the past month, but we can’t yet speak of a full recovery.
August. Normally a summer bumper month; this year far from it. The Skift Recovery Index has stalled at 43 over the past month, against a baseline of 100 for 2019 performance during the same weeks.
This is not to say that travel volumes and bookings have not grown. As the recovery index tracks the current performance against that of the same time last year, seasonality is taken into account, and a flat performance in the index means a growth in travel volumes like any other August for destinations in the northern hemisphere, including the U.S. and European markets. We can see this in many of the sources that are incorporated in the index.
In the U.S., where there are still major pockets of outbreaks, passenger throughput at major ports, as measured by the Transportation Security Administration has been increasing, although total volumes are still far from 2019 levels.
Likewise, new flight bookings made in 2020 by Russian travelers through the Aviasales platform have increased by 6 percent CAGR since early June, after slowing down significantly during April and May. Weekly bookings are now at a higher level than at the start of the year.
The question now is whether the industry can stretch the summer peak into September and October, or whether demand will fall as it would do in normal times. If the industry manages the former, we might see strong increases in index scores over the coming few months. If the latter comes to pass, the index is cursed to remain between the 40 to 50 mark for the foreseeable future.
China might be providing some indication. The country has benefited from a strong domestic travel season, and has seen domestic flight capacity and hotel occupancy close to pre-Covid levels. The country has experienced an accelerating recovery over the past few months, but according to hotel booking data from Shiji Group, the pace of growth has slowed down in August. The end of summer holiday period and children returning to school might have contributed to this slowdown.
While seasonal trends seemingly remained intact, the overriding factor remains the spread of the virus and travel advice for countries. This was nowhere clearer than in Mexico during August, where the country saw a healthy growth in its travel performance, despite the land border with the U.S. remaining closed for non-essential travel.
Mexico reached a peak in cases at the end of July, and new cases have since started to drop slowly. Since then, vacation rental bookings have skyrocketed and far outstrip 2019 levels.
Whether the country can keep this growth going is questionable. European countries are starting to show rapidly increasing numbers of new COVID cases as they opened for international tourism over the summer months, and the travel performance is feeling the impact.
As fall is coming, it is normal for tourism movement to slow down. It’d be bad news if there are new waves of Covid outbreaks on top of the seasonal decline. Let’s hope that won’t come to pass.
We work with many data partners to track how different sectors and countries are recovering from the current pandemic. We have recently added Aviasales and Onyx CenterSource to our list of partners, to further strengthen the insights.
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