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We spend a lot of time at Skift these days ruminating about the shape and scope of the travel recovery, sometimes using our own proprietary research but more often than not we share stories from our personal lives.
Those exchanges often come to life on our internal communications platform Basecamp. As a fully-distributed company now, Basecamp is our virtual water cooler.
On Wednesday, the mention of a single data point on savings rates during the pandemic unleashed some really thought-provoking exchanges that we felt were too good not to share. At its core, it is about the idea of travel as a right versus a privilege, really — a notion that our founder Rafat Ali pressed the industry on as far back as 2019, but with very little response.
Thinking through how extractive travel as a sector — and us as 2 billion travelers — has become; some reframing/rethinking needed: we have been shouting for decades about travel as a right, now the need is to change it to travel as a privilege. Lots of nuances to this of course.
— Rafat Ali, Media Owner & Operator (@rafat) February 21, 2019
Our banter on Wednesday echoed some of these themes.
This format is an experiment for us, telling a story in this way. Let us know what you think.
Now to our talk:
Seth Borko 11:52 a.m. EST (Senior Research Analyst, New York)
“Interesting Bloomberg article on savings during the pandemic. Says that Americans have pocketed $2.9 trillion in excess savings during the pandemic. Fascinating stat … In the U.S., a running down of all the money saved in the past year would propel economic growth to as much as 9% If you’ve heard me harping on about savings rate and economic data this is why. Really has potential to power a large rebound in travel spending.”
Rafat Ali 12:01 p.m. (Founder, CEO, New York)
“Here for the rebound!”
Dawn 12:04 p.m. (Dawn Rzeznikiewicz, Brand Strategist, New York)
“What makes you think it will be spent on travel rather than debt, medical bills, or just held onto tightly since people are going to be in a different place psychologically after this scary time? Seth (suppose all are still good for the economy)
curious on your thoughts.”
Jeremy 12:12 p.m. (Jeremy Kressmann, Research Editor, Duluth, Minnesota)
And on that same topic, might it be used speculatively, a la what’s been happening w/ Gamestop and Robinhood?
Borko 12:16 p.m.
“A lot of different ways to respond there and it will all at the end of the day just be speculation until it happens for sure. But the first is that even before this crisis is that those who were relatively wealthier led travel demand in the U.S. and they have better ability to handle debt and medical bills. The edit team is actually working on piece about luxury leading the travel recovery which plays into this idea.
Borko 12:23 p.m.
“Whether people are in a different place psychologically is a great question and it may change for some but our survey work indicates that more Americans than not are ready to increase spending on travel in the next twelve months. And also on your point about medical bills and debt. The savings data is after all of those mandatory expenses so it is excess cash that is available to spend. Also interesting to note that interest payments have actually declines in aggregate mostly because mortgage rates are so much lower (though this is very uneven and primarily benefits owners over renters)”
Rzeznikiewicz 12:25 p.m.
“thats all interesting – and points taken! has research done anything looking at if travel will be cheaper or more expensive or the same during the return?”
Madhu Unnikrishnan 12:26 p.m. (Editor, Airline Weekly, a Skift brand, San Francisco)
“I wonder, though, if past recessions are a guide, will spending rise on consumer goods, new houses, etc? And after factoring in the fear people still may have to travel, I wonder if travel would be further down on the list than it usually is.”
Tom Lowry 12:26 p.m. (Editor-in-Chief, New York)
“Ned would tell you no, Dawn … Airlines May Actually Regain Some Pricing Power This Summer
Rzeznikiewicz 12:27 p.m.
“ooft maybe ill book some flights now, Tom”
Rachel Bronstein 12:30 p.m. (Developer, New York)
“Anecdotally, which might not be worth much: my friends come from a variety of backgrounds, including artists/freelancers, restaurant workers on unemployment, others who were laid off from various fields, and a few tech bros like myself. Regardless of economic status, medical access, or debt, most people are talking about traveling ASAP. With the first EIP and extra unemployment benefits, most of my friends with debt paid off as much as they could and spent very little, but by this point most people I know are eager to spend. It’s not that my friends aren’t worried about their financial health, because that is scary and will continue being scary. But my feeling, and the feeling of those around me (I believe), is that leisure — be it traveling, partying safely, enjoying restaurants, or just being together — is as important to recovery as recuperating financial health and saving. Both are critical to recovery, and travel is the part we talk about the most. Of course, that might just be my specific group! No one has families over here.”
Rzeznikiewicz 12:33 p.m.
“(brag) lol – I agree that sounds a lot like me / my personal circle, but we are of a relatively privileged class. thought suppose the privileged have always been the travelers.”
Haixia Wang 12:34 p.m. (Vice President of Research, Seattle)
“agree with Rachel on this. and Dawn, fascinating to look at this from psychological perspective. i think most people feel they need a treat for themselves after this and will spend on “non-essential” things.”
Rzeznikiewicz 12:34 p.m.
“to your point Jeremy I’ve never been so interested in the stock market, or invested for that matter, until this year”
Dani Wagstaff 12:35 p.m. (Director of Emerging Brands, New York)
“I’m sure Skift has covered this or will, but I’d be interested to hear more about points… we now have sooo many points on chase that we normally spend on travel. Will travel companies have to change point exchanges if they need cash? Not sure how it works”
Rzeznikiewicz 12:35 p.m.
“Haixia, definitely. here’s hoping ned’s a liiiiiittle wrong in the indication that travel might get more expensive – that might box a lot of us out. i can indulge to a POINT haha”
Kressman 12:36 p.m.
“Dani Chase has been trying really hard for members to use their points for non-travel purchases. Lots of offers to redeem points for everyday spending discounts, statement credits, etc. But it will be interesting to see everyone try and use their point balances all at the same time when travel opens up!”
Wagstaff 12:38 p.m.
Ali 12:44 p.m.
“This is a fascinating discussion, we should either try to turn this into a story or into a clubhouse :-)”
Jason Clampet 12:51 p.m. (Co-founder, Chief Product Officer, London)
“Rachel: That’s fascinating! My friend group, instead, is spending money (or planning to spend money) on massive home projects, new stoves and appliances, cars, etc. There’s some talk of travel, but on the whole, all I hear about is home improvement/renovations
“And this is a well-traveled bunch. I’m actually surprised at how little we’re all talking about trips and how much we’re talking about Wolf vs. Bertazonni stoves”
Lebawit Lily Girma 1:25 p.m. (Global Tourism Reporter, Dominican Republic)
“Agree on regional/local travel as well. With planning for 2022 long haul travel. We talk a lot about international travel but there are interesting shifts/dynamics happening at a domestic level too. For example in my backyard prices have dropped dramatically at resorts and hotels that used to be inaccessible to the majority of the population – now they’re literally staycationing several times a month (so it seems). Same is happening in African safari destinations where locals used to be priced out. Many thoughts on this. As for my fellow privileged traveling friends I hear mostly post vaccine travel plans for summer. Totally agree with that, Jason.”
Wang 2:36 p.m.
The million (billion? trillion?) dollar question for me is how much all of this will permanently change everyone’s habits and decision making versus just prove to be a temporary blip before historic habits fall back into place”
“thats interesting to hear Haixia — and a case for things shifting back to how they were re: international travel, have to remember that people don’t only travel because they particularly want to go that place. with the world being more and more connected, people have family in different countries they’ll be desperate to see. also, most countries aren’t as big as the US so I wonder if the lure of domestic travel might not be as long lasting as it could be here. (where we have a bunch of different types of places to visit)”
“True Haixia – maybe a mix of both”