Mass tourism will return by summer, optimistic Expedia CEO says – Orange County Register
Things are looking good for Expedia Group – well, relatively, anyway.
Its third quarter earnings report shows a company that still generates $ 1.5 billion in quarterly revenue, beating mid-pandemic expectations, even though it represents $ 221 million in losses. Parts of the business, like airline ticket sales, may have fallen, but others, like the VRBO home rental platform, are making up for it.
Instead of looking back on the last few months of bumpy activity, CEO Peter Kern, who took over the management of the company in April, prefers to look to the future. Even relative to other bullish leaders in the industry, Kern is a firm believer that the travel resumption is not just on the horizon, but around the corner. And it will not only be on wooded hiking trails and scenic roads, but also in large, dense and barricaded cities.
“Rome has gone through a plague or two,” he said, repeating an idea he voiced during numerous engagements during the pandemic. “And he’s still here. New York has been through all kinds of things. This is not the first time that we have had civil unrest, ”he explains. “It was a very different place, in terms of safety, when I was growing up in the 70s, but we went anyway.”
And while it’s true that a calmer New York City still holds the vibrancy of many small towns combined, Kern feels that this story arc will bend sharper and faster toward a full recovery than before. “It’s an era with more science, more technology. We are not going to give up.
“This is just a man’s opinion,” he continues. “This [process] will be less than the three to five years others predict. If you said tomorrow that there was a 100% effective vaccine, and everyone gets it, do people want to live in a dead end or in a city? They would rush in and realize that there was a reason they weren’t living in a cul-de-sac before.
Aside from the bleak outlook for the suburbs, here are Kern’s broader (and more optimistic) predictions for the near-term future of travel, from a spike in bookings at any time to a “boost” in investment in hotels. urban restaurants and culture.
Kern firmly believes that news of an impending vaccine, rather than the vaccine itself, is what will jumpstart the journey. “People will think, ‘Well, by the summer, Europe might be open, or I might have the vaccine, so let’s save it,'” he explains.
Pfizer’s announcement last week that its vaccine candidate was 90% effective has yet to show any quantifiable impact on Expedia’s sales, but it has pushed the company’s stock price up 22%. , 5% that morning, as well as similar peaks for travel agencies such as Marriott International and Park. Hotels and resorts.
A change in consumer confidence doesn’t happen overnight, but it increases steadily, says Kern.
“With the exception of the vaccine, I felt people were becoming more and more comfortable with the safety of air travel and hotels – the precautions taken by the industry – and the numbers [of bookings] crawled [as a result], “he says.” Of course, it helps if everyone does their part. [to keep the virus in check]. “
The second half of this thinking is crucial: Trust in airline and hotel protocols only matters when people are physically able to travel. With a second wave forcing closures across much of Europe (and possibly the United States, soon), consumer confidence may well be a moot point.
Like others in the industry, however, Kern sees its fairly decent summer sales as proof that there is pent-up demand and a reason to hope that business can pick up speed again. “Everything is terrible, but it’s much less terrible than one might have imagined,” he concedes.
Businesses die, entrepreneurship not
As travelers decide to bet on 2021 bookings, they’ll be reassured by Kern’s predictions for their favorite city destinations, no matter where they are. This is because entrepreneurship is inherently resilient, as Kern puts it.
“Some people will lose money, restaurants, hotels, but I don’t really believe a hotel disappears as much as someone with capital coming in and saving it,” says Kern.
That doesn’t mean small businesses are swallowed up by conglomerates, he says. He would prefer to see them serve more as amicable partners. “The local color is what makes places great. But in New York City, many, many restaurants are not funded by the chef or whoever has the idea, but by people with capital. (Don’t tell any of the 2.6 million people who live in Brooklyn, where neighborhood pride and independent loyalty go hand in hand.)
Money, he says, isn’t a scarce resource – though strapped mom-and-pop operators might disagree right now – and it doesn’t necessarily have to fund top companies. range, which have so far proven to be a little more resistant to the pinch of the pandemic. . “There is still a lot of capital in the world. There will always be people to fund the theater and the restaurants and all those things, ”says Kern.
Why mass tourism is important
Many cities can rejoice in a lull in attendance: see Amsterdam, Venice and Barcelona, all of which have struggled with too much tourism in recent years. So how does this fit with Kern, whose company weighs in on much of the mass tourism industry?
“Travel is a force for good, and we want to help people get where they want to go, how they want to go,” he says. “We also want to see the negative impact of tourism on the planet reduced, and that will happen in many ways. But the impact must be driven by mass tourism [as opposed to luxury]; otherwise, it is modest compared to the stake.
Airlines’ efforts to push for biofuels and hotels to launder laundry more wisely represent big industry-wide changes that have taken hold or are being accentuated. . And while Kern says neither Expedia nor the travel industry as a whole is “doing enough” to promote sustainability, its plan is to make existing efforts more visible to consumers “so consumers can vote with their wallets. and that the industry can keep up with demand.
These consumers might not know how to assess which might be the most effective or innovative practices. But demand for at least some environmental awareness, he predicts, is likely to grow exponentially, as are our quarantined bucket lists.