With all the uncertainty surrounding the coronavirus pandemic, many Americans are reconsidering upcoming travel plans.
ValuePenguin, a company which specializes in assessing the value of financial products, recently conducted an online survey of more than 1,200 Americans and found that 48% of Americans have canceled summer travel plans due to coronavirus concerns. Alongside reconsidering upcoming travel, Americans also appear to be changing their views on travel in general, with 43% reporting feeling more negative about the industry as a whole and 52% admitting to being more fearful of future overseas travel.
Nearly half (48%) of Americans canceled summer travel plans because of COVID-19. Additionally, about 1 in 6 (16%) expect to wait more than a year before traveling again.
46% of those who had upcoming travel plans lost money on nonrefundable deposits and cancellation fees, averaging $854.30 per person. Most of the lost costs came from airline tickets (59%) and hotel rooms (44%).
The coronavirus pandemic is changing consumers’ views about travel.
Forty-three percent feel more negatively about the industry as a whole, and many will change their behavior as a result. For example, 55% said they’re less likely to take a cruise once the pandemic is over, and 52% are more fearful of overseas travel.
1 in 4 Americans are planning a celebratory trip once the threat of the coronavirus disappears, especially millennials, Gen Xers, parents of children under 18 and six-figure earners.
40% of consumers said they’re more likely to purchase travel insurance for future trips due to the coronavirus. However, 18% said the health crisis made them less likely to consider insuring their future trips.
More than a third (35%) of Americans don’t expect to use all of their paid time off (PTO) this year and many said their employer changed PTO policies as a result of the virus. Those policies range from the good (13% are allowing unused PTO to roll over into next year) and the bad (20% are reducing the number of vacation hours for employees).
Consumers are canceling summer trips, and many lost money on nonrefundable travel costs
Many consumers who canceled summer trips lost more than their chance for fun in the sun. Forty-six percent lost money on nonrefundable travel — mainly on airline tickets (59%) and hotel rooms (44%). Those who booked with Airbnb had better luck, as only 22% lost money on an Airbnb reservation.
Other losses included tours or activities (25% of consumers), cruise deposits (21%) and other travel related expenses (11%). Unfortunately, those who canceled travel plans lost a staggering average of $854.30.
Coronavirus is changing Americans’ travel behaviors
While many Americans are feeling uneasy about traveling right now, it turns out they may be less eager to travel even after this crisis passes. Many consumers said the pandemic has changed their views on the travel industry, with 43% feeling more negative, and only 15% feeling more positive toward the industry.
Brett Holzhauer, credit card expert at ValuePenguin, believes this change in feelings represents a bigger shift in consumers' view of the travel industry. “We’ve all been in the position where airlines haven’t been the best to work with, whether that be their customer service or their policies about cancellations. And now with this large pandemic going on, people are revolting, saying we aren’t going to tolerate these ridiculous policies that some of the airlines have,” he said.
Cruise lines in particular may feel a strain from this shift: Fifty-five percent of those surveyed said they’re less likely to take a cruise once the pandemic is over. Baby boomers were the most likely to stop cruising because of the pandemic (65%). International travel also seems to be taking a hit from the pandemic, with 52% of consumers saying that they’re less likely to travel internationally once the pandemic is over. Once again, baby boomers were most likely (61%) to feel this way.
Financial strain likely plays a role in why so many Americans may want to avoid traveling internationally post-pandemic. Twenty percent of consumers said they’re reallocating their vacation fund toward other expenses, although 27% are still contributing as usual. Consumers are also considering more precautions with their money, as 40% said they’re more likely to purchase travel insurance in the future due to the coronavirus pandemic.
Consumers shifting away from travel credit cards
Even those who want to travel will likely need to wait a while, which makes collecting travel points less appealing for the time being. Of those with a travel credit card, 43% have altered their behavior with that card due to the coronavirus, with 32% using their travel credit card less often and 11% switching to another card completely.
Holzhauer feels that stepping away from travel credit cards is a good move right now if you have other options, “I think it is very strategic and smart for people to adapt with the times when it comes to making purchases and earning cash back or travel rewards,” he said. Holzhauer noted that now is likely not the best time to be hoarding travel points as the future of the travel industry is uncertain.
Some are looking forward to traveling again
Not all consumers are afraid of travel (although 16% plan to wait more than a year before traveling again). A quarter of those surveyed are planning a “celebratory trip” once the pandemic is over. Millennials (34%) and Gen Xers (32%) especially are looking forward to getting out of town. And 41% of those who earn $100,000 or more said they are planning a post-pandemic trip. A similar percentage of parents with children under the age of 18 (42%) also plan to take a much-needed vacation once life returns to a more normal routine.
Paid time off (PTO) will likely play a big role in how much people can travel once we bounce back from this pandemic. Twenty percent of those with PTO through their employer said that their employer reduced their PTO due to the coronavirus. On the bright side, 13% reported that their employer is allowing them to roll over unused PTO, which will likely come in handy as 35% don’t expect to use all of their PTO this year.
What does this mean for me?
Your travel plans, career and lifestyle may have been affected by recent coronavirus-related events. If so, keep these few helpful tips in mind:
If you’ve canceled or need to cancel travel.
If you have to cancel a trip due to travel restrictions or health concerns, or would like to cancel an upcoming trip, you may be worried about being refunded for nonrefundable bookings. Some airlines and hotels are making exceptions for cancellations right now. Holzhauer recommends working with individual vendors first to get refunds. If they refuse to budge, he then suggests looking into your credit card's travel insurance policy.
According to Holzhauer, the best way to go about working with your credit card company is to, “First off, of course be pleasant to the customer service representative, everyone is under a very stressful time right now, you’ll never get anywhere with a frown rather than a smile." He advises patience. "Things aren’t going to get done in a timely manner … Give it some time, save all of your documentation, don’t expect anything to happen right away.” Holzhauer emphasizes holding on to any documentation that supports your claim, even if you have to wait until things calm down to present your case.
Worst case, you could try selling airline tickets you can’t use!
If you’re looking to book travel.
Whether you have wanderlust or business requires you to hit the road, booking travel can be nerve-wracking right now. If travel can wait, Holzhauer recommends booking as far out as possible for the time being. “Even the federal government doesn’t really know when things are going to open back up,” he warned. He also suggests booking any travel with a travel credit card that offers insurance. If your credit card does not offer travel insurance, then he recommends buying some from a third-party travel insurance company.
If you have leftover PTO.
While a sandy beach probably sounds good right now, a staycation may have to do the trick. Don’t let PTO go to waste, even if you have no official vacation plans. Working from home can be particularly challenging and stressful, so a few days of a major movie marathon may be in order!
One of the best things you can do is remind yourself that this difficult time will pass. Be patient while you wait for travel refunds and for your work life to settle into a new routine.
ValuePenguin commissioned Qualtrics to conduct an online survey of 1,201 Americans, with the sample base proportioned to represent the overall population. The survey was fielded April 3-6, 2020.
Generations are defined as the following ages in 2020:
Jim Hepple is an Assistant Professor at the University of Aruba and is Managing Director of Tourism Analytics.