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Virtuoso: Holding out, optimistically, for 2021

The year 2020 started out with “incredible promise,” according to a press conference and panel at luxury travel network Virtuoso, with many travel agents expecting higher sales than 2019. What they got: a global pandemic, millions of lost jobs, cancellations and months of negative growth in the US$9 trillion global tourism industry.

Virtuoso’s Travel Week conference, usually in Las Vegas, is being held virtually this year for the first time. It’s still offering meeting rooms for those fast-turnaround appointments, this time in online breakout rooms. As of Monday, 4,000 people from 96 countries had joined the event, booking 78,000 appointments.

Still, panelists representing the spectrum of luxury travel expressed optimism – at least for 2021, when they see travel returning in earnest.

In the meantime, Misty Belles, Virtuoso’s managing director of global PR, laid out some statistics based on a poll of agents: In a 2019 poll, 85% had predicted higher sales, and mostly double-digit increases in bookings, for 2020. Now, “it’s an opportunity to reimagine” the industry, Belles said, with travel looking different once the pandemic eases globally.

What do customers want? Road trips with “travel pods” – people and family who feel safe traveling together; most prefer to stay within 1,500 miles of home. Wellness-focused hotels remain popular, but properties near landmarks and city life are gaining. Top destinations: Globally it’s South Africa, Italy, Australia, France and Japan; in the U.S., California, Hawaii, Alaska, Washington and Montana.

But more than anything else, Belles said, consumers want flexible booking and cancellation policies amid the unpredictability of future pandemic waves, government restrictions and their own uncertain futures. That was underlined by Virtuoso CEO Matthew Upchurch, who predicted that cancellation policies will determine a customer’s decision to book a vacation.

Current situation

Upchurch said the global tourism sector has suffered badly this year, with “staggering job losses and effects. While the rest of the world is dealing with a recession, our industry is literally dealing with a depression,” he said, predicting that 197 million jobs would be lost by year-end if the global situation didn’t improve.

Last year, he added, the hot topic was overtourism. Now it’s “undertourism,” as local economies dependent on tourism money struggle to survive in an environment where every country has implemented some kind of travel restriction.

What keeps the industry going, Upchurch said, is the global rise in affluence and interest in experiences, along with five generations of people traveling at the same time. He called for better collaboration and coordination between public and private entities, which he said was affecting travel confidence.

He said Virtuoso partners have observed that savvier travelers are proactively booking into 2021, assuming that limited capacities might make reservations more difficult to get. “They are trying to make sure they have the best space,” he said.

“The great news is that people are not canceling,” said panelist Geoffrey Kent, founder and co-chairman of luxury travel company Abercrombie & Kent. Instead, they are pushing bookings into 2021, into small camps in Africa, for instance, and other wide-open spaces. “Everyone’s talking and postponing.”

While cruise companies in Europe are starting operations again, U.S. operators voluntarily suspended sailing until the end of October, said Lisa Lutoff-Perlo, president and CEO of Celebrity Cruises. The company isn’t pushing to start sailing again as soon as possible, she said, because “too much protocol can kill the experience.”

“When we come back, we want to do it in the right way, with confidence not just in cleanliness and safety protocols but in ports of call as well,” Lutoff-Perlo said. But 2021 is looking good: 40% of bookings are re-bookings, 60% are new, with Alaska and Europe topping the list.

Philippe Zuber, Kerzner International’s chief operating officer who was named to the CEO post in July, said his company is seeing some positives as well: July numbers surpassed the same month last year in China, and destinations with proximity to a domestic market are seeing a rebound as well.

The biggest challenge for travel agents has been staying on top of health and safety questions for customers around COVID, quarantines, safe destinations and the like, said Becky Powell, chief strategy officer of Protravel International.

Key trends, according to the panel:

  • Zuber: Larger suites and private homes – anything with more space – seem to be selling out first, and the Kerzner-managed One&Only Reethi Rah in the Maldives is seeing bookings of 28 days – “really, really extended stays” – signaling a desire for more stability and trust with a single resort.
  • Kent: “This pandemic has made everybody realize that adventure and experience is what they want. They’re going to pursue that,” and not visits to major cities. More camp and villa holidays that can be done as a family.
  • Powell: Guests will want to engage with local communities differently as the communities address the effects of overtourism. And the definition of luxury now means “private” – private villas, jet travel, etc.
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