If You're Expecting Intense Travel Crowds To Go Away, Don't

Throughout the peak part of the pandemic, travel was more heavily restricted and many folks remained home instead of taking their annual trips. But that has since changed.

Flying away

As restrictions began to loosen, all of that pent-up travel demand led to HUGE demands for vacations and the things that come with them (rental cars, etc.). Disney has seen some pent-up demand for its parks. But now that travel restrictions have been loosened for quite some time, is that demand going away? Will some of those longer lines at the airport be getting shorter soon? The news is not necessarily what you might want to hear.

Recently, Delta Airlines’ CEO, Ed Bastian, spoke with CNBC about the demand in the market and whether that is starting to wear off. Bastian’s response? “Not at all.”

Bastian pointed out that we’re lapping the surge point this President’s Day weekend, but he said there are “no signs that people were able to in the space of a year take care of almost 3 years of travel.”

©CNBC

In fact, Bastian shared that he thinks this is going to be a “multi-year demand set.” But just how far out is Delta looking? One CNBC reporter pointed out that some sources have suggested consumers’ excess cash could start to run out this June or July — is that complicating things?

Bastian shared that they have a pretty good level of insight into the spring and early summer of this year and the numbers continue to be very strong.

Orlando International Airport crowds

Bastian did point out, however, that Delta’s consumer base is a bit different since they are more of a premium brand so its consumers may have more cash still.

But he also noted that international travel is still opening, which means there’s still a LOT of potential for increased demand there. He shared that he thinks there is a “significant year ahead” for the travel industry. But it’s up to the air travel industry to do a “good job” of running the business.

©Delta

One CNBC reporter also asked about business travel and whether that (compared to leisure travel) has improved to pre-pandemic levels. Bastian shared that they are not back to pre-pandemic levels in terms of traditional business travel, BUT traveling for business has changed.

He said that you now see people traveling for many reasons. Instead of working from the office, they may be able to work remotely, meaning they can take their work on the road. Bastian shares that those people can then travel and work from wherever they’re at, and that is leading to a “significant incremental piece of business” that Delta hadn’t seen before.

©Delta

So if you had been hoping that airports would suddenly get emptier, it seems that might not be the case, at least not for travelers who have a significant amount of cash still and are seeking to vacation (potentially with more premium brands). This lines up with information shared by Reuters where various U.S. airlines indicated that they expect strong travel demand to continue in 2023.

But it’s not necessarily all good news. Reuters points out that “economic uncertainty and burgeoning labor and operations costs could cloud their rosy outlooks.” So while you shouldn’t go in expecting travel demand to suddenly drop, it is subject to change and could look dramatically different depending on how this year plays out.