Fewer than half of Americans say they are optimistic about traveling on vacation this year, according to a new survey that pours even more cold water on airline and travel industry leaders’ recent efforts to talk up a meaningful recovery beginning later this year of leisure travel demand.

Given the longstanding expectation that business people will be much slower to return to the travel market than leisure travelers, the fresh survey data from IPX 1031 further undercuts the recent, hopeful-sounding comments from several U.S. airlines’ top officers. Last month, as they reported the worst-ever annual financial performances, top leaders of several carriers – particularly Delta and United but also several others – sought to emphasize their expectations of a leisure travel rebound starting perhaps as soon as late spring.

A big leisure travel recovery, if it were to happen this year, almost certainly would not be enough to return the entire airline industry to profitability by year’s end, though Delta officials aggressively suggested their carrier would be back in the black by fall. That’s because conventional U.S. airlines’ profits are hugely dependent on higher fare-paying business travelers – who represent only about 15% of total passengers – for profits. Business travelers tend to pay around twice the price, on average, of what leisure traveler spay for their fares.

Still, an early recovery of leisure travel demand would be a positive for the deeply-troubled industry. It also would largely staunch the financial bleeding, which currently continues at a rate of tens of millions of dollars daily in cash losses for the six largest carriers.

Conversely, a further delayed recovery of leisure demand this year could send the staggering U.S. airline industry into an even deeper and more serious financial crisis. The six biggest U.S. airlines – American, Delta, United, Southwest, Alaska and JetBlue – lost nearly $35 billion in 2020 while seeing cash flow out the door at a rate of more than $50 million a day, combined. Some of them dodged bankruptcy only thanks to $25 billion in cash granted to the industry by Congress and another $25 billion in loans offered them by Congress last Spring. In December Congress authorized another $15 billion round of help for airlines, with the bulk of that money earmarked for 40,000 or more employees who otherwise would be laid off because of weak demand.

Last week American and United sent layoff warnings to more than 20,000 total works, many of whom have not even been recalled yet after Congress’s authorization of more grant money to offset their lost wages from Oct. 1 of last year through March 31 of this year. The industry already has begun lobbying Congress for further salary protection of such workers after the current round of support expires on March 31. The new Biden administration has not said yet whether it would support another round of such support. When asked, new Transportation Secretary Pete Buttigieg has to date avoided commenting on that possibility.

A second year of losses nearly as large as last 2020’s losses would threaten to wipe out the U.S. airline industry’s combined cash stockpile of about $32 billion. Some carriers have the ability to raise more cash by selling assets and issuing more debt obligations. But they would do so at the risk of further destabilizing their balance sheets or being forced into bankruptcy reorganization proceedings.

To be sure, the IPX 1031 survey does suggest that there will be an increase in leisure travel this year over the near-collapse of both business and leisure travel demand in 2020. But the concerns the new survey either raises or does not address are important ones:

  • When will the leisure travel recovery really start? If recovery doesn’t begin before or during the summer, the industry will have missed its normal peak revenue generation season. Many analysts and industry insiders believe a complete demand recovery back to the pre-pandemic levels seen in 2019 probably won’t happen until 2025.
  • How big will the leisure travel recovery be this year? The International Air Transportation Association, the global industry’s lobby group, was predicting as recently as December that travel demand world-wide would recover as much as 50% of what it lost in terms of travel demand in 2020 (when globally travel was off 66% from 2019). But just last week IATA chief Alexandre de Juniac said December and January travel bookings were so weak in response to new spikes in Covid-19 cases and new mutations of the virus all around the world that if that trend were to continue through the spring and into the summer IATA fears there may be only a 13% increase in travel demand this year vs. 2020. Were that to happen he estimated airlines around the world would need another $80 billion in economic support from their governments. “Last year was a catastrophe,” de Juniac said. “What recovery there was over the northern hemisphere summer season stalled in autumn and the situation turned dramatically worse over the year-end holiday season as more severe travel restrictions were imposed in the face of new outbreaks and new strains of Covid-19.”
  • By what modes will leisure travelers travel this year happen, and what facilities will they use? Typically in the U.S. around 83% of vacation trips are taken by car. In fact, Statista reports that in 2018  63% of Americans said they preferred car travel to travel by air. However, as the length of their planned journeys grow, and as the time available for such trips shrink, Americans increasingly opt to fly.
  • How much will leisure travelers spend on travel this year if/when they do travel? IPX’s research shows that Americans, on average, are budgeting $2,470 for leisure travel in 2021. Furthermore, 36% of respondents said they would use some or all of any federal stimulus payments they receive this year on such travel. Such payments currently are being discussed in Congress, with the focus being mainly on the size of those payments, not whether such payments should be made.

IPX 1031 got survey responses from just over 2,000 Americans. Among other things, the survey shows that:

  • 48% of Americans says they are optimistic about traveling and vacationing in 2021. Another 27% say they are “somewhat optimistic,” meaning 75% of Americans have at least some expectation of vacationing in 2021. But that also means 25% are not at all optimistic they’ll be doing so this year. It is worth noting that in a “normal” year not impacted by a pandemic or other major global concern, experts on the subject suggest that between 20% and 25% of Americans do not take any vacation or travel for leisure. Also around 52% of Americans in most years fail to take all their available vacation days, even if they just take those days off but do not travel.
  • While just under half are “optimistic” about traveling for vacation this year, 58% said they do, in fact, have plans to travel this year. And 42% already have booked their trips. The incongruency of the “optimistic” vs. “planning” results indicate that a sizeable portion of those who do intend to book, or already have booked leisure trips this year anticipate having to cancel or delay their travel plans.
  • While the IPX survey questions do not specify by what means leisure travelers expect to travel, when asked specifically about when they will feel safe about flying, 48% said they already either feel safe or expect to feel safe about flying later this year. Eighty percent said they will feel safe about flying in 2022. Those answers indicate a close relationship between the national effort to vaccinate people against Covid-19 and the perceived safety of flying. About 72% of respondents said they’ll feel safer about flying after being vaccinated themselves.
  • IPX reports that 23% of their recent survey respondents said they do not think travel will ever return to “normal,” meaning no health-related or other restrictions on who may travel, where they may travel, and when they may travel. Currently, for example, travel for Americans to Canada, much of Europe, Asia and the Middle East is so heavily restricted that there is almost no demand for travel to those destinations. Intriguingly, just 45% of those responding to the IPX survey said they expect that travel demand will ever fully return to pre-pandemic “normal” levels.
  • Significant “pent up” leisure travel demand does, in fact, exist. That’s evidenced by the 57% of IPX survey respondents who said they have gone a year or more without taking any leisure trips/vacations. That portends a potentially stronger and quicker impact on the lodging industry and on tourist destinations than for the airlines. If anything those sub-categories in the overall travel and tourism industry have been hurt even more than the higher profile airline industry. Most such companies are stand-alone businesses or privately-owned franchises operated under the brands of publicly traded companies. Thus the financial impacts are felt more at the private company or small company level than at the large corporate brand level.

IPX 1031’s interest in the subject of leisure travel stems from its involvement in risk mitigation in the vacation real estate business as a title insurer. The company’s researchers, therefore, also asked what  Americans’ preferred vacation accommodations likely will be in 2021.

Hotels were favored by 28% of respondents, “with family” by 21%, and short term vacation rentals (i.e. Airbnb, VRBO, others) by, 17%. Owned vacation homes or time shares will be preferred this year by 10% , and camping will be the choice of 7%. Another 9% said they plan to stay in their own homes during a “staycation” type of vacation, while 8% said they would make other lodging arrangements.

The survey also showed that of the 24% of respondents who said they own a vacation home or a timeshare, 67% of them said they have used those properties as their primary residence during much or all of the pandemic.