Pent-up demand is so strong that off-peak travel bookings are higher for pre-summer weeks and mid-week days. On the industry’s first 2022 travel earnings call, Delta Air Lines said off-peak travel returns are improving as travelers move away from the most popular travel schedules. Expect to hear more from travel officials this year.
The post-pandemic travel return has been so robust that airlines and hotels are selling more seats and more rooms for times once designated as “off-peak.”
As a result, off-peak prices have shown gains, which may weigh on travelers while benefiting airlines and hotels, even as historically more profitable business travel has yet to fully recover to 2019 levels. .
“We’ve been trying to catch up with this strong demand,” Delta President Glen Hauenstein said last week as the premium U.S. carrier got underway. airline revenue reports. “When you look at where we are pre-booked, we got (prices) slightly ahead during peak days and peak travel times versus off-peak times. And we’ve seen the consumer demand you’d expect, with travelers entering the off-peak period, but at higher yields. »
One result for the airline industry has been that revenue management is back in vogue after its pandemic decline. Now, airlines can try the traditional revenue management strategy again: hold onto some seats to sell them at higher prices to late-bookers. The model could not be sustained during the pandemic as late-booked business travel plummeted.
Hauenstein not only offered a shout out to revenue management, but also advised budget-conscious travelers to look for off-peak fares. “Our quest within the revenue management team, which I think has done a great job in managing this increase, is to not run out of seats as we approach the peak of travel, the season of summer trips,” he said. “We want to have reasonably priced offers on the market until the day of departure and we don’t want to run out of places.”
For the sensible price, Hauenstein said flying during peak summer season will require a willingness to fly on off-peak days. “As we head towards the peak, there will be constraints on peak days,” he said. “And so when you’re shopping, if you’re looking for lower fares, you have to be flexible about what days you would be willing to fly.”
Hauenstein’s discussion of off-peak travel referred to both midweek but also “shoulder seasons,” such as the slower spring weeks. When a renowned analyst crossed the historic low between spring break and summer travel, Hauenstein said: “One of the problems is coming out of covid, we are probably not going to reach the peaks as high as in the past to create more efficiency in the network throughout the year. For example, he said, pre-covid Delta operated about 20% more widebody aircraft in the summer than in the winter. “What we’ve really been working on during covid is to come out of this with a more seasonally adjusted network, so we can improve asset utilization, flatten the peaks and build on the troughs,” he said. he declares.
Delta’s earnings report sparked a boil in travel supplier stocks. For the week, Delta and American shares rose 15%, United 9%, Marriott 8% and Hilton and Carnival 8%. This week, American and United will release their results.
Hilton and Marriott will report in early May. The hotel chains did not comment on recent booking trends, but Marriott said that in the second half of 2021, “Thursday and Sunday shoulder days rebounded well just below 2019 levels (then that) Fridays and Saturdays were above pre-pandemic levels,” according to spokesman Benjamin Gerow. “Monday through Wednesday were still well below 2019 levels.”
During Hilton’s fourth quarter call in February, CEO Chris Nassetta said hotel stays were increasing. “As a positive indication of the resumption of transient business, in early January, mid-week US transient bookings for all future periods were down 13% from 2019 levels and improved to a decline of only 4 % at the end of the month,” Nassetta said. Regarding leisure travel, he said, “we expect strong leisure trends to continue again this year, driven by pent-up demand and nearly $2.5 trillion in consumers’ excess savings.”
Aviation consultant Bob Mann said it makes sense for travelers to move to off-peak times to cut costs. “Business travelers want to travel when they want to travel,” he said. “But with leisure travelers and price finders, you can focus on prices to drive changes in demand by day of the week and time of day.”