Looking back, the start of 2020 brought global movement to a standstill. Eager tourists had to cancel their holidays, digital nomads were encouraged to extend their visas, and business travel was redirected to Zoom meetings, home-office and long-distance phone calls. Work From Home (WFH) has become the new norm. Suffice to say, the Covid-19 pandemic wreaked undeserving havoc on the travel industry. The good news is that we are slowly seeing an earnest recovery with travel bans being lifted and tourism in many countries being given the green light to open doors once again:
Spain opened its border to the Schengen Zone as of June 21st, two weeks earlier than expected. Greece, Italy and Sweden have eased travel restrictions earlier too. Singapore negotiated the opening of a business travel corridor with China, while American Airlines & United are set to increase flight schedules as of July.
The question is, what is powering the recent increase in corporate and leisure travel demand?
As travel recovery becomes more apparent, the months ahead will see a fast rise in flight bookings and the need for flexible, Covid-19-appropriate accommodation. Along with consumer demand, summer demand has led to the need for domestic and holiday rentals to prepare for the return of short- and long-term visitors. This makes the urge for movement and the need to keep the wheels of the economy turning reason enough to re-open the travel industry amidst the Covid pandemic. But what else has sparked the drive for travel recovery?
✔ Long stays to drive occupancy rates up
There’s a dire need to get the economy up and running. This means that businesses started to move ahead with their planned talent mobility & management strategies and pending assignments, relocations and employee transfers have started to resume. Fortune 1000 companies have already started to remobilise their global workforce and proceed with employee transfers and relocations. Considering that Global Mobility is of strategic importance to Talent Management, multinational companies like Apple announced an early return to office in an effort to ensure business continuity.
Besides companies, the demand for long stays are also driven by frontline workers, digital nomads, or social distancers. As Omer Rabin, the Managing Director, Americas at Guesty explained:
“Most of these travellers of today are looking for longer stays than before, but they don’t want to make the commitment of signing a several-month lease. This has led to an increase in bookings for mid to long-term rentals (stays of 28 days or more), a trend we are seeing globally.
In order to meet the demand for longer stays, we are seeing more and more hosts introducing flexible business models and including extended stays into existing inventory.
We are predicting that hosts will increasingly move towards mid-term stays and long-term stays, rather than just short-term, meaning portfolios will become hybrid. This business model of flexible rentals will be the norm in the post-COVID world, as travel will not go back to normal all at once.“
✔ Domestic Moves Set to Restart a Travel Boom
As lockdown restrictions begin to loosen, people are starting to feel the need to move around away from the confines of their homes. Families are eager to reunite with each other, country holidays are longed for, and an overall urgency to “just move freely” has nudged domestic travel into action. We expect domestic travel redistribution and new destinations to rise as people are curious to discover anything that is within driving distance.
Moriya Rockman, CEO, CMO and Founder of Smiling House shared more about factors driving the recent spike in demand for luxury rentals.
“Since March 2020, because of the Covid-19 situation, we recognised the huge need of getaway destinations close to nature as a solution for vacation rentals. As people had to spend a lot of time at home, the need for facilities such as hot tubs, pools, garden, BBQ became much more appreciated.”
This trend, as well as the requested luxury properties in leisure destinations, has been increasing since. According to Moriya, “As summer started, and people already got used to the idea that Covid-19 is here to stay. The guests, who can afford it, are choosing luxury options for privacy, cleanliness and extra facilities. The bigger and more luxurious the property is, the more facilities you will find, such as private pools, gyms, playgrounds and large gardens. In the new era of travel, families even made out of 3 generations, would like to stay together in a “safe” place, where they can enjoy each other without sharing with strangers.”
The ever-increasing demand for alternative accommodations, be it apartments or luxury villas, shows that rentals are particularly well positioned for a safe travel recovery. As Moriya highlights “Nobody is eager to go to a 5 Star Hotel with 4 pools and 12 elevators. If a property can replace 4 to 6 hotel rooms, we can see by the amount of requests and bookings, it’s the best alternative!”
✔ Working from Home Opens New Possibilities
One of the many things Covid-19 has taught us, is how to work from home. As companies around the globe put systems in place for employees to work remotely, it awakened an idea that more can be done from home than once thought. Couple this with the need for staff members to self-isolate if they or a family member becomes sick; what we have is alternative accommodations emerging as a key solution for businesses seeking contingency plans to keep staff safe, healthy, and productive.
This trend has created a surge in the number of digital nomads and expats who have realised just how much they can get done as they move from one location to the next. It is expected that large corporations and Fortune 1000 companies will be increasingly offering work from home as part of employee benefits.
The technology giants, including Facebook and Google have recently announced that their employees are likely to work from home until the end of the year. NatWest and RBS’s employees are set to return to offices in September.
✔ Summer Holiday for a Great Deal
It’s summertime in Europe and after strict lockdown regulations, the population has a pent-up demand to head out to the country for a breath of fresh air and a good dose of vitamin D. Families want their young kids to have the space to run free and students and young adults are eager to catch up with friends and enjoy social group holidays. With the borders of the likes of Spain, Mallorca, Cyprus or Ibiza now open, many are making their summer reservations despite the threat of the current global pandemic. Combined with attractively reduced rates for high quality accommodations, including apartments and villas, occupancy rates have gone up speedily in the last few weeks.
✔ School Closures Offer more Flexibility
Some schools have yet to open while others are restricting the number of pupils they’re willing to cater to at a time. This means that the summer holidays have been somewhat extended. With the more casual restrictions on movement, families now have the ability to travel and extend vacation time. For example, instead of carrying on with home life in London, groups are heading off to enjoy monthly stays in Bali.
While people have mixed views on travelling amidst the continuation of Covid-19, many are of the mindset that they will be kept safer out in the country or in smaller tourist destinations. This is as opposed to if they were to stay within the hustle and bustle of cities that pose a great risk of contraction.
The Bottom Line
With an abundance of precautionary measures put in place, the travel and tourism industry is feeling more confident about hosting leisure and corporate travellers. Individuals are tired of restrictions and are relying on these precautionary measures to keep them safe while they make the choice to move around both domestically and internationally.
Are you planning to travel for business, or organise an employee transfer for your company ? Get in touch to discuss your temporary housing solutions and health & safety requirements on booking@altovita.com or view our Enterprise Solution for our flexible Corporate Housing solution.
References:
[1] The Telegraph UK. Spain to reopen borders on June 21
