INDUSTRY NEWS
Europe's ban heaps more troubles on U.S. travel industry
The European Union’s decision Tuesday to continue its pandemic-related ban on American travelers dealt yet another blow to the beleaguered travel industry while underscoring the continued unpredictability and political tensions created by Covid-19.
“The industry is very nervous, if you can be nervous when suffering from shellshock,” said Tom Jenkins, CEO of the European Tourism Association. “Bookings for 2020 had been excellent, and many bookings for the peak season of September-October remain on the books. These bookings are looking more hopeful than probable in the current environment.”
Still, industry officials noted that the EU will review its border policies every two weeks, meaning the ban could still be lifted before the peak summer and fall travel seasons are over.
“I would refer to it as a work in progress, and we are hopeful that decision will be reviewed soon,” said Nick Calio, CEO of trade group Airlines for America.
Calio said he believes some EU concerns could be ameliorated if the federal government were to begin temperature checks for airline passengers. Temperature checks, he said, were a subject of discussions between EU and U.S. officials as the EU developed the specifics of its border-reopening plan.
Airlines for America has called on the TSA to conduct temperature screening at airport checkpoints. But TSA administrator David Pekoske on Tuesday said no decision had been made on that issue.
Jenkins said he believes the EU border opening decisions are being driven by public perceptions and opinion polls over logic.
“There is no doubt that the process of travel involves risk of transmission, particularly in such hubs as airports,” he said. “But international travel poses no greater risk than domestic travel.”
The EU decision reopens Europe’s 26-country Schengen Area to travelers from EU member states and 14 other countries: Algeria, Australia, Canada, Georgia, Japan, Montenegro, Morocco, New Zealand, Rwanda, Serbia, South Korea, Thailand, Tunisia and Uruguay.
The EU said the decision was based on science and infection rates in other countries.
Jenkins emphasized that the virus is everywhere, and for the EU to say it will only open to travelers coming from countries with lower infection rates than the EU “is a highly problematic proposal.”
“If you are only willing to deal with countries that have a lower infection rate than yourself, you are effectively saying that you will only allow travel to countries who ought to quarantine your nationals,” he said.
The New York Times first reported last week that the EU planned to exclude the U.S., Brazil and Russia from the lifting of its travel ban on July 1 because of soaring infection rates in those three countries. The U.S. Travel Association had called the news “incredibly disappointing and a step in the wrong direction as we seek to rebuild our global economy.”
Also commenting on the NYT report, ASTA CEO Zane Kerby said it was “a short-sighted decision that could have unintended long-term consequences.”
“Our travel advisors report extraordinary pent-up demand for travel,” he said. “The European travel market is vital to the business of travel advisors. With the no-sail order still in place, this proposed travel ban threatens to push our members’ businesses off a cliff.”
Tori Emerson Barnes, the U.S. Travel Association’s executive vice president of public affairs and policy, said the EU’s decision to exclude the U.S. “will have major negative implications for an economic recovery -- particularly if this ban results in cycles of retaliation, as is so often the case.”
But she did not make any mention of or call for the U.S. to lift its travel ban on Europeans, which has been in place since mid-March.
Reciprocity is seen as key in border reopenings. China, for instance, is on the list of countries that will be able to resume traveling to Europe -- if it agrees to open its borders to Europeans.
Jenkins said the EU plan has also created rifts among EU members.
“There is considerable tension within Europe after this move,” he said, noting that many of the member countries in southern Europe “were open to receiving American visitors, but the general consensus was that this was not the right move to make.”
While EU members are not bound by the decision, Jenkins said, “It would be a brave nation to break this collective decision.”
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Mexico is open. It's welcoming. And it has become a best seller
When Mexico travel specialist Jennifer Doncsecz was invited to Cancun for an agent trip to the Hyatt Ziva in the midst of a pandemic, she admits she was hesitant, and she waited until the final moment to commit.
But like other advisors who have traveled to Mexico recently she was impressed that the implementation of comprehensive health and safety protocols didn't compromise her relaxing experience on the beach and made her feel she was safer than she was at home.
She now has plans to return over Labor Day.
As quarantine-weary Americans look to venture out, Mexico -- despite high Covid-19 infection rates -- has become the top international destination for near-term travel, sellers say. That's likely due in no small part to proximity and that so few other countries, near or far, are currently welcoming Americans without restrictions.
Doncsecz's sense that she was safer in Cancun than at home is the result of collaboration between Mexico's resorts and tourism officials, who have worked closely with each other and local governments to adopt, enforce and publicize strict health and safety protocols.
"All of our hotels are now at the maximum allowed occupancy," said Armin Kaestner, vice president of business development in the Americas and Caribbean for Riu. "It's great and it's not, because [allowable capacity] is only 30%." Still, he said, Mexico is booking at twice the rate of the company's properties in Jamaica, the Dominican Republic, Aruba and the Bahamas.
The Cancun-Riviera Maya region has, by far, the country's most hotel inventory of any beach destination, so it's not surprising that it's been the hands-down leader in gross bookings. But Los Cabos last month reported the strongest recovery in international tourist arrivals on a percentage basis.
"Little by little, things have been getting back to normal. It's very interesting," said Rodrigo Esponda, managing director for the Los Cabos Tourism Board.
Figures for international arrivals to Los Cabos in July were at 27% of their July 2019 levels, compared with 15% for Cancun and 18% for Puerto Vallarta.
While still dramatically lower than in 2019, they reflect dramatic improvements from the near 100% falloff recorded from April through June.
And travel sellers say that after dropping off a bit in early and mid-July, Mexico bookings picked up again dramatically in recent weeks and are second only to domestic travel.
Jack Richards, CEO of Pleasant Holidays, said that 51% of his company's customers traveling between Aug. 1 and 10 were going to Mexico. And among those booking the destination July 1 to Aug. 3, 70% were for trips in 2020.
"It's a lot of last-minute stuff," he said. "We're seeing people booking on Monday and departing on Tuesday."
Ray Snisky, president of Apple Leisure Group Vacations, said their bookings for Cancun in August are down just 8% year over year.
"There's a real push for people saying, 'Let me get on this trip before summer ends'". "I think this close-in booking trend will continue into the fall, although I don't think it will be as dramatic as in the summer."
Still, like everything Covid-19-related, the future remains unclear.
"This feels like a roller coaster ride," said Richards. "You go down, you come up. Then you go down, then you come up."
David Lavigne, director of product development and destination operations for Delta Vacations, agreed demand for Mexico "is a very fluid trend at this point."
But "all in all, we continue to see a reasonable build for both short- and long-term business."
Although airlift into Mexico for August is about half what it was at this time last year, travel sellers say it is sufficient given that hotels are currently capping occupancy at between 25% to 30% of maximum, depending on the state.
One thing that is helping Mexico, Snisky said, is that the majority of hotels in the major beach markets are open, and customers are more comfortable booking places that have some experience operating in the new environment and where they can be reassured about what the experience is going to be like.
They are also opting for more upscale properties, sellers said, with five-star properties selling at four-star prices.
Bill Linehan, president of Worldwide Marketing, said that, right now, the most popular products of client Karisma Hotels & Resorts on the Riviera Maya are the more expensive, private overwater bungalows and casitas. And customers are benefiting from upgrades, he said.
"What's interesting is they are equating their value not just on price but quality, because they can get higher quality, greater value. And that's where we're benefiting."
