Henry Harteveldt, Travel Industry Analyst and President of Atmosphere Research, joins Yahoo Finance Live to discuss the uptick in travel over Memorial Day Weekend and the outlook on the travel industry amid COVID-19 reopening.
BRIAN CHEUNG: Anyone that was traveling this Memorial Day weekend may have noticed that the airports were getting more packed, and the data we got from the TSA seems to back that up. It hit a pandemic record in terms of travelers that were passing through. The average of almost 1.8 million people were moving through the airports each of those four days spanning the weekend.
And to discuss this more we’ve got Henry Harteveldt He’s a travel industry analyst at Atmosphere Research. And Henry, it’s great to have you on our show. I want to just kick things off by asking– that number was still below the 2019 Memorial Day weekend level, which implies that maybe there’s still more room to grow in terms of people getting back out there to travel. So what is the ceiling, at least from what you’ve been seeing so far, as the economy continues to reopen?
HENRY HARTEVELDT: Well, Brian, there are a couple of things to consider. First, we still have almost no international travel allowed from the US. So what we saw over the Memorial Day weekend was mostly domestic and to a handful of international countries, including Mexico and a few places in Europe. Second, there’s no business travel taking place at all right now. And granted, you don’t think of business travel during Memorial Day, but business travel does continue year round. So we’re about 23 and 1/2% or so down from where we were in 2019. Considering where we are in terms of restrictions and limitations and what is available, that’s pretty darn good for the airline industry.
– So let’s speak about that a little bit, Henry. What is the outlook that you have for international travel, for business travel, at least through the second half of the year? When do you think those things are going to start to pick up again?
HENRY HARTEVELDT: We conduct market research with travel managers. These are the people who manage the programs and the budgets at different companies. Right now most of them are expecting their travel programs to resume in September or later in the year. And it’s going to be, again, limited, mostly domestic, where they can international. There remains a lot of uncertainty.
It’s going to take the business travel segment probably three years or so to recover for the US. It may be longer in other parts of the world. Leisure is probably going to hit 100% of pre-COVID levels by some point next year, and United Airlines is saying that they’re already seeing leisure fares match the prices people paid in pre-COVID times.
So there’s strong demand for now. I think we’ll continue to see strong demand from leisure travelers. I also think leisure travel stretches out beyond summer. People who have the flexibility to work from home or work from anywhere may be able to work out with their managers, hey, look, I’m going to take four weeks and work from somewhere else, wherever that somewhere else may be, and then be back at home. They’ll still do their jobs. It just may be somewhere else, whether Paris, Texas or Paris, France.
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