Most industry observers are expecting January sales to be only 30-40% of traditional levels because although the news of a Vaccine is a massive boost to consumer confidence, too much uncertainty remains over the speed of the vaccine role out and access to low-cost testing to allow travel.

With hundreds of aircraft sitting on the ground and Jet Aviation Fuel being 37.8% cheaper year on year, flight capacity will return rapidly for Summer 21 once demand returns, creating an “Ultra Late” market for holidays. However, low-cost airlines models yield models are based on low early prices establishing solid load factors before the “lates Market” i.e. within 3 months of departure and natural caution is likely to lead to capacity remaining at 70% of 2019 levels. So less overseas holiday will be sold in 2021 compared to 2019 peak volumes.

Travel companies January marketing will have to change to reflect changes in the mix of customer types booking and the types of products demanded. However, there are so many variables at play, it’s hard to predict these changes with any certainty, requiring a “measure and react fast” policy.

A key impact cutting across all passenger types is the increased differential between the “Have’s” and the “Have Not’s”.

The impact of Covid-19 lockdown measures have not been felt equally across all industries or employment sectors. If you have been working throughout Covid-19, you will now have increased disposable income having spent less in lockdown and have a large number of holiday days left to use. However, many people have been furloughed or made redundant, making these customers unlikely to be in the holiday market this year.

There are a few trends that can be predicted however

Families. Traditionally, 60% of January sales come from families booking early to secure the right hotels during school holiday periods. With the costs of Covid-19 tests currently at £120 per person per test, it’s hard to see families booking in January, as the combined cost of inbound and outbound tests, in theory, could be as much as £960 per family, which is just untenable for a mass-market beach holiday.

Older customers. Ironically, this could be the first market to return to booking, as they have the greatest certainty of being able to get a vaccination and have been locked down the hardest over the last 9 months. Covid-19 has reminded us all of our own mortality and the importance of enjoying life while we are healthy enough to do so but apply this to an age group with the finances and time to travel and you can easily see surge in bookings from this sector. Cruise is the obvious beneficiary but watch out for growth in demand for destinations like Cyprus, Malta and Benidorm that have older customer profiles.

Couples. Test costs are lower and potentially bearable, so depending on economic circumstances this group should be willing to book and will make up a higher percentage of the reduced January booking levels.

Younger people. This sector remains the most Covid confident, as the health impacts are much lower, but their disposable income is lower and the need to book early is minimal. Why would they book in advance when they are being told that there will be plentiful late availability?

I personally believe that “Lockdown” levels may also impact consumer phycology and introduce a further potential regional impact on demand. If you are in Category 3 and cannot socialise with friends outside the house, in pubs or restaurants, you are a lot less likely to discuss holiday plans. Historically this has been a big driver in the “Dream” stage of deciding where and when to go. How often have you booked a holiday because you heard friends talking about their holiday plans?

Predicting changes in destination mix is equally hard, as the unpredictability of “Quarantine Corridors” is a nightmare for the travel industry and customers alike. Even with a reduced quarantine period of 5 days with a test, quarantine corridors will have a massive influence on demand and simply cannot be predicted with any certainty in advance. Therefore, it’s hard to predict what changes in destination mix we will see until January bookings start coming in.

However, it is likely that the demand for self-drive holidays and staycations will remain high again in Summer 21, given its unlikely that the majority of the holiday taking population will have been vaccinated by summer and Covid-19 avoidance may remain front of mind.

The phrase the “the only thing certain, is that nothing is certain” has never rang truer.