Air Travel Rebound Still Years Away as Virus Lingers, Kayak Says

(Bloomberg) -- Travel demand probably won’t return to last year’s levels until about 2023 because of the lingering impact of Covid-19, according to travel-search site Kayak.

“Consumer confidence will take time to return and supply will take a long time to return,” Kayak Chief Executive Officer Steve Hafner said in an interview. “The issue is not on the rental car or hotel side, it’s on the flight side. Airlines don’t want to operate flights they lose money on. They will be rational about how they bring those schedules back.”

On Monday, Booking Holdings Inc.-owned Kayak published a data site that allows visitors to track day-by-day how the coronavirus pandemic has affected flight searches globally, relative to the same day last year.

Searches for domestic flights by Americans are rebounding more quickly than international, but are still down 42% from the same day a year earlier. International flight searches have declined 62%.

Flight searches in the U.S. hit a low in early April. They began a rebound in May as domestic and international restrictions eased. In Latin America, where the number of virus cases continue to climb, flight searches are tumbling.

There was a counterintuitive spike in searches in early March. Hafner attributes that to a mad dash for flights home before lockdowns came into force.

Kayak says data are from a global sample of more than 1 billion searches and based on flight interest by a searcher’s country of origin, not actual bookings. While the figures are compared with the same day a year earlier, they also serve as a leading indicator because some consumers are looking for flights well into the future, Hafner said.

Caribbean Trips

In general, the searches show U.S. consumers are steering clear of urban hot-spots and seeking the outdoors. Searches are also affected by which locales have or haven’t eased travel restrictions.

“If I am willing to get on a plane, where I am willing to go has changed a lot,” Hafner said. “It’s not crowded destinations like New York or Paris. It’s places with outdoor space, more like Hawaii or Caribbean.”

Jamaica, Puerto Rico and the Dominican Republic top the list of destinations showing the most improved search traffic from the U.S. Meanwhile, searches for trips to the U.K., Spain and France remain at least 75% lower than a year ago.

China points to a recovery as a destination for U.S. searchers, which Hafner hypothesizes could be related to potential business travel and Chinese students returning home.

A notable pickup has been seen in the leisure segment rather than with business travel, Hafner said. Las Vegas, which reopened casinos June 4, has seen the biggest spike in searches, up 42% week-on-week but still down 38% from a year earlier.

The trends that Stamford, Connecticut-based Kayak identified gibe with increases reported in recent weeks by U.S. airlines. A Standard & Poor’s index of U.S. carriers has climbed more than 60% since mid-May, when it hit an almost seven-year low. The index remains well off its pre-Covid levels.

Seeking Deals

Although Kayak doesn’t publish price-change data for air fares, it has identified another particular behavior among consumers in recent weeks: bargain hunting.

“Average fares are down considerably from last year,” Hafner said. “There is deal hunting to be found.”

Consumers in China have increased searches for international flights, now down 64% from a year ago versus the trough of an 87% decline in late April. Their top destinations are San Francisco, Vancouver and Copenhagen. Searches for flights from China to Boston and Washington, D.C., have surpassed last year, now up 81% and 61%, respectively.

In Brazil, which last week overtook the U.K. for the world’s second-highest Covid-19 death toll, flight searches have been mostly flat since late March, consistently down about 75% from a year ago. Spain and Italy, which have reopened their economies, are also seeing a steady increase of flight search interest.

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