Data Story of the Travel Market Recovery

The lockdown period brought a dramatic closure & after it opening of travel. The changed landscape is interesting to examine as travel is returning but the return is not equally distributed across countries and segments. We looked into FindHotel’s demand, search & booking data to highlight the most interesting changes we have seen.

Overall, from a low of 72% drop YoY in April, hotel searches are on the rise, and Jun '20 is expected to only have a 30% deficit on Jun'19.

Indexed Searches for Accommodation (Forecasted numbers for Jun'20)

1. An alive segment:

Back in March, while the rest of the travel industry took a plunge, demand for one small segment remained unscathed. The roadside hotels/motels segment in the United States remained alive throughout March and April.

Google Search Trends for select Hotel/Motel brands

These hotels had a lower dependency on international or business travellers, and with an economic collapse around the corner, most remaining local bookings across US were consolidated in these budget roadside hotels, moving the user search share in US for these hotels from 32% in Jan-Feb to 44% in Apr-May.
Our hypotheses were soon validated by Skift and Koddi.
For FindHotel in particular, with our mission to “Get every traveller the best accommodation deal, worldwide”, we particularly stand out in price sensitive segments, making this a valuable building block for our recovery.

2. A recovering market:
While we were focused on the budget segment within the US market, the remainder of the overall US market started to recover as well.

Indexed Searches for Accommodation in US

US was back to 60% of January search levels by start of May, and is already at ~100% of Jan levels. To contrast, the global market just crossed the 60% threshold in the first week of June.

Indexed Searches for Accommodation Globally

This recovery was the first stable recovery after a couple of false starts in some Asian markets. For instance, Singapore brought us some promising starts in March which did not stay for long.

Indexed Searches for Accommodation in Singapore

This growth for US was more stable, and sustained through April and May. The share of US hotels went from accounting ~20% of global accommodation demand in January to ~30% in May. Start of June was when other markets started growing more rapidly than United States and regaining their traffic shares.

Share of United States in Global Accommodation

3. Global recovery:
After US, parts of Europe and Oceania were among the first markets to start recovering around the first week of May.

Indexed Searches for Accommodation in Select Countries

Notably, the Scandinavian market is already at search levels higher than January, in line with summer seasonality for this time of a regular year.

Following an announcement of re-opening of EU borders starting July on 5th June, this traffic is further expected to grow through June. Government announcements are heavy growth points, as witnessed by the more sudden increase in France, Spain and Italy Markets

Indexed Searches for Accommodation in Spain, Italy and France

A notable exception from this recovery story has been United Kingdom, which is the only major market yet to show any significant signs of improvements. The lockdown is still in effect in England as of creating this post.

Indexed Searches for Accommodation in UK

4. Emphasis on domestic travel

An expected outcome of this pandemic has been an increased emphasis on domestic travel.

The share of international searches dropped from ~29% in May 2019 to ~17% in May 2020.

From the beginning of the year, as the pandemic grew in Asia, international traffic took a bigger hit than domestic travel did. Indexed searches through Mar-May remained as low as 20% of Jan values. (The slight increase in June is mainly in the EU region).
Domestic travel on the other hand already has reached 80% of January levels, and based on trends in some countries, expected to surpass the January levels before July.

Indexed Searches for International and Domestic Accommodation

One major effect of this domestic trend has been movement away from searches in major cities.

In United States, for instance, the share of searches for accommodation in major cities (New York City, Las Vegas, Orlando, Chicago, Los Angeles, San Diego, Washington D.C., Atlanta, San Francisco) has dropped by 45%

Share of major US cities within US accommodation searches

Similarly, within Europe, the share of major cities London, Paris, Istanbul, Rome, Berlin, Amsterdam, Madrid, Barcelona has dropped by 65%

Share of major European cities within Europe accommodation searches

5. Trips planned on shorter notice

Once bitten, twice shy. After having to cancel plans in March/April, many travellers became wary of making reservations in the distant future. We saw a noticeable drop in the booking window (days booked in advance)

Average Booking Windows in 2020

Interestingly, just because travellers were reluctant to book does not mean they were reluctant to plan. There was barely any drop in the search window for properties, as our users dreamt of where they would want to be in a few months.

Average Search Windows in 2020

6. Hotel Rates are on the increase again

With the drop in demand, most hotels had reduced prices to attract the remaining users. Overall room price/night had dropped by ~30% from global mean of ~90€ in February to ~70€ in March-April. However, this was temporary, as by June, we already see average prices exceed the 90€ mark.

Global Trend of Mean Nightly Rate in 2020

7. Different segments performing differently

Not all hotels are equal, but some hotels are more unequal than others. We already discussed how the demand for budget roadside hotels in US did not drop as much as the rest of the industry. In fact, it stayed above 50% at all times, and crossed the 100% mark in early May already. It’s still growing through June.

Indexed Searches for Budget Accommodation in US

Another segment that recovered very quickly is accommodation around beaches. The announcements of beaches re-opening on 26th April allowed for a sudden surge in searches for beach accommodation. Beaches are also already at 130% of January levels, increasing every week.

Indexed Searches for Beach Accommodation in US

Not all segments were as fortunate though. Accommodations around airports, which get most of their traffic share from international travellers, are still below 80% of January demand levels.

Indexed Searches for Airport Accommodation in US

Overall, we are excited with the relatively quick recovery the travel industry has experienced, and we cannot wait to tag all the above data as “Exclude — Outlier” in the coming years for our analyses!