The Post-Covid Travel Industry’s Soaring Demand Despite Challenges

Demand for travel is high and rates are even higher – an average of $1,600 per night for hotel bookings during 2023/24 festive season. Happy (but stressed) travel advisors and suppliers are delighted to see you swarming back, often in record numbers. The only challenge is meeting your expectations, something that has never been more difficult. Fifty-seven percent of you say, “Creating a travel experience that best fits my expectations is more important than price.” Making sure you have a bon voyage these days takes more time and creativity, even if it’s often hidden behind those smiles. Welcome to the post-Covid travel industry.

According to Virtuoso, a network of travel agencies that cater to HNWs and UHWNs and sell around $30 billion in luxury travel annually, its members have seen a 69% jump in sales versus 2019 numbers. Hotel and cruise segments are up 173% and 122%, respectively. Despite wavering forecasts about the economy and world disorder, future sales, compared to 2019, the previous high-water mark, are tracking 107% higher.

Jack Ezon, CEO of EmbarkBeyond, says he recently launched Embark Together for small groups of family and friends. The programming includes sending a coordinator along with the customers to organize activities and ensure no letdowns.

For everyone, it’s a challenge, say executives attending Virtuoso Travel Week, which ended yesterday in Las Vegas and drew over 5,000 participants.

Sometimes, the answer is no. Mina Agnos of Travelive, a destination management company in Croatia, says, “We had to say we were sold out for the first time ever. We just couldn’t find any additional qualified drivers and tour guides.”

Paul Tumpowsky, CEO of Skylark Travel, says it flows back to travel advisors. “The DMCs are understaffed. There are plenty of hotels, but not the people on the ground to help our clients,” he says.

Rebecca Masri, Founder of Little Emperors & Co, adds, “There’s a lack of English tour guides. The transfer companies are understaffed. There are not enough drivers.”

Most frustrating is providers who take bookings months ahead of time and email hours before a client’s arrival to say no drivers or guides are available.

For advisors, who are often independent contractors, it means more work, which means they have less time to take on new clients and to take a breath.

Matthew Upchurch, Chairman of Virtuoso, urged advisors in his keynote to analyze their customer lists and eliminate the ones who are hard to deal with or have low revenue.

However, firing customers isn’t necessarily easy. Over 99% of Virtuoso clients say they would recommend their advisors, so most new ones come as referrals, making it stressful to dump that nightmare client if they came by way of a big spender.

Still, Upchurch says advisors need to put their mental wellness first in a job that means checking text messages and solving problems 24/7.

Andrea Grisdale of IC Bellagio, a DMC in Italy, says, “You need to know when to say when. There is always the idea of just hiring more people. It’s not that easy.”

“It’s no longer, okay, there are hotel rooms. The answer is there is a limited supply of people, guides and drivers who can provide the right experience,” she says. “For the first time in 24 years, we stopped sales. All of our trusted providers were booked.”

The solution, she hopes, is to extend the season. Seasonal hotels are closing a week or two later and will open in a bit earlier in 2024. She believes it is up to the industry to be creative. That means selling the benefits of slow-season travel.

“In June, any restaurant in Rome is going to be packed. You will not get the same level of personalized attention as in October or November,” she says.

She is working with the World Travel & Tourism Council to exchange ideas with members in other regions to see what tactics work and then replicate the good ideas.

Regent Seven Seas Senior VP Sean Tubman says his ships have no issues. However, executing shore excursions that are part of the luxury cruise experience at the level clients expect remains challenging. “We have to work hard to ensure travelers understand the reality,” he says.

In some cases, technology helps. Guests on Princess Cruises wear or carry a medallion that transmits their photo and profile as they approach crew members so they can be welcomed by name and served their favorite libations right away.

Other times, it’s helpful to come from a powerful family. Michael Ungerer, CEO of Explora Journeys, which just debuted its first vessel, says having MSC, the world’s largest shipping company as its parent, gives it clout with sticky supply chains. So far, so good. Explora I earned an 89 net promoter score on its maiden voyage.

In the case of Claudio Meli, GM of The Place Firenze, it helps that while other hotel managers come to their properties from other places, stay for a couple of years and move on, as a native Florentine, he has local connections and lifelong relationships.

Being candid is the first step to solving the problems, says Jerry Mpufane of South Africa Tourism. International arrivals are back to 82% of pre-lockdown, and Americans, the highest spending market, are at 95%.

He says the good news is that popular camps had extensive renovations and introduced new concepts. However, “Ramping up is bittersweet. We accept the criticism that we aren’t moving fast enough, but we are doing the best we can, and we want our valued visitors to know we are trying.” To help things along, the government has set-up new funds for tourism start-ups and is supporting hiring and training efforts by the industry.

Gilberto Salcedo Ribero of Pro Colombia says it has been easier for his country since it reopened in September 2020, meaning fewer people left the industry.

Companies have also had to change how they recruit. Fairmont Hotels and Resorts CEO Mark Willis says staffing challenges vary by region, with the biggest holes in Europe and North America.

The Accor luxury brand launched its first-ever PR initiative to attract employees.

“The message is we are hiring from attitude. You don’t need experience. We’ll train you. We’re in the make people smile business. It’s not that difficult,” he says.

Another change is job candidates “want to be sold. They interview us about sustainability, diversity, and inclusion.”

Still, guests get frustrated when staff don’t know what to do. Auberge Resorts Senior VP Evan Altman says, “We had a hall pass for two years to charge high rates with service lapses. That’s not okay anymore.”

The group prides itself on being a gateway to experiencing the destinations where its properties are located, something that, before Covid, provided a winning formula for creating jobs in those local communities.

However, in some places, it’s just not possible at the level guests expect, which has meant a bigger focus on figuring out ways to entertain you on the property.

In other cases, it means new solutions. At Wildflower Farms in New York’s Hudson Valley, a “hard labor market,” Auberge now has employees lead its guided hiking program, something he says costs more but was “the only way to have consistent quality.”

Red Carnation Hotels CEO Jonathan Raggett says he was supported by the owning Tollman family, who did not layoff staff when hotels were closed.

In an industry known for overnight shifts and working on the holidays, the post-Covid world means meeting employees where they want to be. “You want to work Tuesdays, Wednesdays and Saturdays. That’s fine. We’ll do it,” he says.

He believes Red Carnation has been able to navigate around supply chain issues because it has strong relationships with its suppliers. “We pay everyone promptly. Vendors are not our bank,” he says.

Virgin Hotels CEO James Bermingham says the biggest help in recruiting for the fast-growing brand is simple. “People want to work for Virgin. People want to work for (Sir) Richard (Branson).”

Despite all the best efforts, supply chains sometimes just run out of supplies. S.B. Fuller, a senior data analyst and vegetarian was surprised when a major restaurant at John F. Kennedy Airport in New York told him they had run out of vegetables for the vegetable tacos.