Vaccine Bounce. When will Travel see it?

The announcement that a Covid-19 Vaccine, will start being rolled out by Christmas gave airline shares a massive boost this week, with British Airways share price improving by 40%.

The city clearly sees this as the “beginning of the End”, which is great news for the Industry, but will customer confidence bounce as fast?

Early signs are positive with many retailers, particularly those in the luxury sector, reporting a strong surge in bookings as more affluent customers, with money in their pockets and frustrated by disrupted Summer 20 holiday plans, make up for lost time with early bookings so Summer 21.

However, I still fear that the demand for “mass market” beach holidays will not return until we can reassure customers over the availability and price of Covid-19 tests.

The focus for the first wave of vaccinations will be older people, the medically vulnerable and health workers. It is highly likely that the bulk of “package” holiday makers will not have access to a vaccine until the summer at earliest and even when they have, we still have no idea how “health passports” will be issued or accepted by other countries to allow entry without testing.

Therefore, I think the travel industries focus should remain on implementing a low-cost testing infrastructure.

As a board member of the ITT, I have been able to put forward a question to be asked during the house of Lords debate on travel this week. Basically, it is a request to allow holiday makers access to the Governments PCP testing stocks, if they are willing to pay a £25 fee to have a test prior to travel and one on return to shorten quarantine.

Most holiday destinations are following the example of Cyprus, Dubai and now the whole of Spain in requiring visitors to take a test within 72 hours of arrival.

The cheapest private test available currently cost £125 (Although, TUI customers have access to a negotiated bulk discount) and cost escalate rapidly if you need a “last minute” test, which by definition of the 72-hour rule prior to departure, is a major issue for holidaymakers.

A cost of £250 per couple or £500 per family is a massive deterrent to booking a holiday. I have no doubt that by the time we get to the summer the availability of testing will have increased and competition will have forced down “Rip off” pricing levels. But only the Government has the stocks required to give holiday makers the certainty of access they need to book in January with any confidence.

In reality few people under 50 are still scared of Covid-19 as the low death rates and the relatively mild impacts on people they know provides reassurance. However, many like myself, still have elderly parents or vulnerable friends that dictate a cautious behaviour set, as they cannot risk catching Covid-19 and passing it on.

Once these vulnerable groups have been vaccinated however, I expect the clamour for a return to a normal life, including overseas holidays will surge. At this point the acceptance of illogical blanket quarantine rules will also be heavily challenged.

Due to peer group pressure and social responsibility, I twice returned early this summer from holidays to avoid being quarantined for 14 days, even though I was returning to Rochdale which had a 10 times higher infection rate than the destinations I was returning from.

I’m not convinced the Government will convince me or anybody else to comply with these idiotic blanket rules once the vulnerable are protected, again leading to a surge in demand to get away.

Strong holiday demand for Summer 21 is coming, but I think it will be an ultra-late market still.