Pleasant Holidays this week launched a travel promotion focused on secondary domestic markets, which are expected to lead tourism's recovery from the Covid-19 shutdown. Senior editor Jeri Clausing talked with president and CEO Jack Richards about the new offering as well as his outlook for package tours in general.
Q: You emailed me after I wrote an article about a town hall webinar in which some of your fellow USTOA members said they didn't expect to see any real recovery until 2021. You don't agree?
A: Most of those people were guided vacation operators. They are going to look at the world differently by nature of their business, which is taking between 20 and 50 people at one time. The other side of that is FIT and group custom vacations, which is what we do. On an FIT basis, we are -- for the last three weeks now, going into week four -- seeing a gradual increase in business, primarily for travel in July and certainly for later in 2020.
Q: Where are you seeing the most early demand? I assume primarily for the U.S.?
A: Yes, the U.S. domestic market. But that includes Hawaii. The Caribbean and Mexico are also doing well. Actually, for us, the Caribbean is performing better than Mexico. Why? I think because of the limited information coming out of Mexico in terms of how many Covid cases they have.
There's just not a lot of reporting that we are seeing. But we are working [with the major tourism destinations], and it looks like they are going to begin opening in June.
Q: Are you concerned about the lack of information on case numbers from Mexico?
A: Yes, I am. But we have [destination management companies] in each of the [main tourism destinations] so we'll be able to get realistic information from them. And we work very closely with the tourism boards. They are very accurate. There's just not a lot of information coming from [official government channels].
Q: What other trends are you seeing?
A: June and July is when North America is beginning to open up. Our modeling says that the domestic drive market will recover first, and it will not be to the big megacities. It will actually be to the secondary cities such as Albuquerque, Lake Tahoe, Myrtle Beach.
Just out of coincidence, last week we announced our "Explore America" sale for new bookings through July 31, 2020, for travel through March 2021. It includes one day free Hertz midsize car rental for every hotel night booked up to a maximum of three days.
We've been working on that for a while. We've been meeting with hotels and seeing demand in secondary markets.
We understand that this is going to be gradual, but we are seeing a light at the end of the tunnel now.
Q: What about 2021?
A: 2021 is tracking up double digits compared to the same time last year. I will tell you that our system doesn't do a good job of differentiating between new and rebookings, but we believe a lot of this is shifted out of 2020 to 2021. ... But it's encouraging. I think there is a lot of pessimism that this is going to take years to recover. And I think people can get into an attitude of so much pessimism. I'd rather focus on the opportunity here. We made it through 9/11. We made it through the financial crisis. ... We are a glass-half-full company.
Q: Did you ever think that we would actually be facing something like this?
A: No. And I think what caught most people off guard was how quickly it happened.
We entered 2020 with a record number of bookings. Even with the issues we had in late March, we had a very good first quarter.
For the past two weeks of March, and then April and May, we had 25,000 bookings that were impacted by the Covid-19 shutdown. That's almost 62,000 passengers.
We worked everything in date order. We redeployed all of our reservation sales agents into customer service. We were really focused on trying to provide really high-quality service.