By Brent Blake, President, Acendas Travel
If you look at the TSA numbers, you might be inclined to say everything is back to normal when it comes to travel. But if you take a deeper look at the data, you will notice some trends that — at least in the short-term — might complicate matters for travelers.
As a travel management company, we are having conversations with our suppliers, partners and even competitors to gain a better understanding of what is happening, why it is happening and how we can help our clients. This goes beyond the issues of masking on planes, distancing at various venues, implementing touchless travel and other process elements. Our focus here is on major trends that are taking hold in the marketplace:
Trend No. 1: Air Capacity Increasing to Targeted Cities
Airline schedules are driven by advanced bookings. We are seeing flights being added to vacation destination markets such as Florida, Arizona, California, Mexico and the Caribbean, and not to other regions that lost flights once the pandemic hit.
Airlines are also monitoring their flight loads and as a result there is an increasing number of flight cancellations because loads are not hitting the targets. Cancellations are also occurring because flight crews and maintenance parts are not available.
Trend No. 2: Continued Rental Car Shortage and High Retail Pricing
There are 5 – 600,000 less rental cars in the marketplace today than March 2020. Because of that, we are seeing higher prices for the consumer, no one way rentals and limited car style choices. Enterprise Holdings is adding 250,000 cars by the end of the summer and Avis and Hertz will be increasing inventories as well. The shortage is expected to continue well into 2022.
Trend No. 3: Travel Management Company Consolidation Continues
Travel was not immune to the merger and acquisition frenzy ushered in by the pandemic. Egencia separated from its vacation provider sister company Expedia and was acquired by American Express. Egencia’s business operations were not core to Expedia’s expertise. The crisis also exposed a lack of cash reserves for many companies, thus the merger activity is likely to continue in 2022. Acendas Travel, which expanded to Sioux Falls and St. Louis in the last five years, is not actively pursuing acquisitions in this environment.
Trend No. 4: Supply Chain and Labor Shortages Impact Hospitality Industry
We are seeing supply chain disruptions across many industries with shortages of resources such as microchips, laptops, lumber, food, etc. The lack of microchips to manufacture automobiles has caused a ripple effect with reduced rental car inventories. Staffing is in short supply as well, especially hotels for on-site amenities like bell staff, housekeeping, restaurant staff, etc. To compensate for this, self-service channels are being created utilizing technology. Research shows that 86 percent of U.S. consumers tried a new technology during the pandemic. Technology has been introduced to the market at an increasing rate over time, and labor shortages will heighten that pace.
Trend No. 5: Sustainability Becoming More Pervasive in Travel
The pandemic revealed the impact on the environment with less people doing less travel. You might remember the satellite photos comparing the earth’s atmosphere pre- and during the pandemic. The difference was stark. Companies in the travel and hospitality industries are making strong moves to support or subsidize “green” initiatives. We have seen an increase in our clients inquiring about reducing their carbon footprint. As a result of the trend, our parent company BCD Travel launched a sustainability practice last year. It is the only ISO Certified Travel Management Company offering this.
As you may have noted, there is not a “wait it out” approach being taken by industry participants. Providers are looking for options to make up for shortages in labor and supplies. While history has shown the marketplace to be effective in such transitions, we know the lag time might create headaches in the form of increased prices, lack of products & services, and a lower than expected level of performance. Our duty as a travel management company is to keep you informed and smooth out any rough spots.