Koddi: Labor Day demand to be near 2019 levels

Demand for summer travel continued to increase throughout the month of July, with U.S. demand at its high point for the year, according to online booking research firm Koddi. Based on historic trends and the recovery that was seen for Memorial Day and the Fourth of July, the company expects Labor Day demand to be near 2019 demand levels.

In both the U.S. and Europe, COVID-19 cases are on the rise; however, both markets have yet to see a demand reaction. Asia-Pacific (APAC) continues to see declines in week-over-week COVID-19 cases, but demand has not yet reacted with significant growth.

Here is an overview of the key insights for each region in July:

U.S. highlights

  • U.S. demand is again at a high point for the year as we reach what has historically been the
    busiest travel season.
  • COVID cases are on the rise in the U.S. after bottoming out at under 9,000 new cases/day last month. The daily rate is currently 5x that amount at above 50,000 new cases/day. Demand has not yet reacted to this, but it is a trend to keep an eye on.
  • Advanced booking windows (ABW) do appear to have reacted to the rise in new cases with increases to the share of ABW less than seven days buckets and decreased to all eight-plus ABW buckets.
  • Coastal cities make up a majority of the largest growth markets for July 2021 vs. 2019, but also include two cities in Arizona: Tempe and Scottsdale.
  • The U.S. to Canada and Canada to U.S. border restrictions were set to expire Aug. 9 and Aug. 21, respectively, which has sparked increased demand for both itineraries.
  • Labor Day check-in dates are likely to see large increases in demand over the coming weeks based on historical trends.

Europe highlights

  • COVID case counts are back on the rise in Europe after falling from April through June. The rate of new cases is just below 150,000 new cases/day.
  • Despite the increase in COVID cases, demand in Europe has remained strong and continues to close the gap between 2019. For the first week of August, demand was down only 8.2% vs. 2019. At the low point in April 2020, it was down 86.2%.
  • Advanced booking windows have seen a shift toward shorter booking windows over the past four weeks. With the 8-30 window relatively unchanged, most of the short window increases were due to decreases in the 31+ buckets.

Recent notable updates:
European Union: Effective July 1, the European Union made available its COVID-19 passport for all citizens and residents—allowing fully vaccinated travelers to move within member states freely.
Germany: The German government has removed several popular international travel destinations, including Italy, Croatia, Switzerland and the Czech Republic, from its list of coronavirus risk areas—removing the need for people arriving from these destinations to present a negative test result or quarantine for 10 days.
U.S.: Fully vaccinated travelers from green list countries, which includes the U.S., are able to enter the U.K. without self-quarantining.
France: France’s parliament approved a law that will provide vaccinated people with privileged access to restaurants, cafes, intercity transportation and other venues beginning this month.

APAC highlights

  • Demand has consistently remained flat for the past four weeks, with a 2.3% decrease for the first week of August.
  • Meanwhile, a sizable wave in new cases is beginning to form. COVID cases decreased by 1.5% week-over-week; however, the previous three weeks before that each experienced an average 14% increase in new cases.
  • Year-over-year APAC demand is up 5% compared to the same week in 2020 and down 38% compared to 2019. At the low point in April 2020, demand was down 76.6%.

Other notable developments in the APAC region this month:
Taiwan: Lockdown restrictions are beginning to ease as new cases continue to fall.
Singapore: Returned to Phase 2 lockdown earlier this month; outdoor activity is highly restricted.
New Zealand: In response to the Delta variant, quarantine restrictions reintroduced for travelers from New South Wales, Victoria and Southern Australia states.
Philippines: Similarly, travel suspended from Malaysia & Thailand, and restrictions in Manila.

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