Labor Day caps dismal summer for travel and tourism

The travel and tourism industry is limping into the final weekend of summer, with layoffs looming for the fall and desperate hopes that a winter vaccine can help recoup what by then will be almost a year’s worth of losses.

Labor Day weekend caps off a dismal summer that started with relatively high hopes that Congress would provide more COVID-19 relief and states would fully reopen their economies. Instead, the traditional end of summer is expected to be no better than it was over Memorial Day and Independence Day weekends amid coronavirus spikes in new parts of the country.

“The state of the industry’s still extremely depressed, and we still very much are advocating generally for the significant need for Congress to act quickly on a meaningful relief package,” said Tori Emerson Barnes, executive vice president of public affairs and policy at the U.S. Travel Association.

Only 16 percent of Americans said they planned to travel over Labor Day, according to an American Hotel & Lodging Association (AHLA) survey conducted by Morning Consult. For upcoming holidays, the outlook is not much better. Only 25 percent expect to travel for Thanksgiving and 29 percent for Christmas.

Public health officials are reminding people to take the necessary precautions while traveling or socializing, particularly over holiday weekends. 

Anthony Fauci, the nation’s top infectious disease expert, said this week that Midwestern states, where coronavirus cases are rising, should be vigilant during the Labor Day holiday. He urged everyone to follow distancing guidelines, wear masks and avoid large crowds. 

Cases rose dramatically following Memorial Day and Independence Day after many states quickly reopened their economies without meeting metrics set by health officials to ensure the virus was coming under control.

Airlines are among the travel companies predicting a rebound in a matter of years, not months. Airlines for America (A4A), which represents major U.S. carriers, said it doesn’t foresee returning to pre-pandemic levels until 2024. Passenger volumes are currently down 70 percent from this time last year.

A4A is calling for more aid from the federal government, and President Trump has indicated he wants to help the sector beyond the lifeline it received early on in the pandemic.

However, a weeks-long stalemate in negotiations over the next coronavirus spending package means no immediate relief is in sight.

Airlines are prohibited from firing or laying off any employees until Oct. 1 under the terms of the relief funding they received in March. But once October hits, United Airlines plans to cut 16,370 employees. That announcement on Wednesday follows similar plans from American Airlines, which last month said it expects to ax 19,000 jobs.

The travel downturn isn’t just hitting airlines. Amtrak recently announced it will slash more than 2,000 employees from its payrolls, with expectations that ridership will return to only 50 percent of pre-pandemic levels in fiscal 2021. Like the airlines, it’s calling on Congress to provide financial relief, to the tune of $1.5 billion.

Simon Hudson, a professor at the University of South Carolina College of Hospitality, Retail, and Sports Management, said things are going to get worse before they get better.

“I don’t think we’ve seen the worst,” Hudson said. “We’ve had cushioning because of government subsidies. Once that money stops, we’re going to see a lot of businesses start laying off, closing up restaurants, airlines, because they’re hemorrhaging money right now.”

Only 14 percent of hotel rooms are booked for this Labor Day weekend, compared with 41 percent a year ago, the AHLA survey found.

Consumer confidence has not returned for traveling and likely won’t until there is a vaccine or expanded rapid testing, Hudson noted. 

“We’ve seen a lot of domestic tourism, but a lot of that is drive-tourism. People are still wary about getting on an airplane, and I think they will for time to come,” he said.

In an effort to attract more customers, airlines are going beyond mandating masks and increasing sanitation measures. Delta Air Lines, American Airlines and United Airlines this week all moved to permanently eliminate change fees for domestic travel. 

Airports are also struggling to make ends meet with low foot traffic as they wait for more relief from Congress. The Department of Transportation announced this week it will award more than $1.2 billion in airport safety and infrastructure grants to over 400 airports to boost the industry. 

“These grants underscore the need for Congress to approve another major relief package to provide meaningful long-term financial support to airports that are running out of money to fund operations and service debt,” said Annie Russo, senior vice president of government and political affairs at Airports Council International-North America (ACI-NA), a group that advocates for the airport industry.

The travel and tourism industry is attempting to remain optimistic that people are ready to start moving again or at least start purchasing tickets for future trips.

The U.S. Travel Association found that 52 percent of U.S. consumers are ready to plan their next trip but predicted that those travel plans will be by car instead of by plane.

“The beaches, national parks, anything that has that outdoor option definitely is seeing an uptick, and we’re seeing some areas that are doing quite well with regard to that,” Barnes said. 

The association also found that 63 percent of travelers said that with the right assurances they would take an overnight trip within the next three months.

“People are very sensitive at the moment. Health is a priority, but if they don’t perceive it to be safe, even if it is, they’re not going to travel,” Hudson said.