With the Covid-19 travel shutdown gradually easing, companies are closely watching both consumer booking activity and supplier strategies for luring travelers back. Senior editor Jeri Clausing talked with Ray Snisky, executive vice president and chief commercial officer of Apple Leisure Group Vacations, about what trends ALG's package tour companies are seeing on the travel horizon.
Ray Snisky
Q: I recently spoke with Jack Richards of Pleasant Holidays, and he said he doesn't see pricing discounts leading the recovery from Covid-19. Do you agree?
A: We have seen some different strategies by carriers. American Airlines has leaned in on being more aggressive in pricing. Both Delta and United have been a little more conservative in pricing. Both of those scenarios try to lead to a similar profit level.
So for us there has been some natural lowering of the package price based on some of the airfares that are out there and some of the changes in inventory.
Q: What are some of the factors driving those strategies right now?
A: One of the things we look at is the volatility of capacity. If you look as recently as last year, the last six months, with the Dominican Republic, it really was a swing where it started off with really low pricing because of the problems [related to the deaths of several tourists]. And then so much capacity was pulled out, it ended up being high prices. So that's one of the things we're watching is this dynamic of air inventory and air availability and how volatile that is. But we have seen, obviously, very aggressive deals that are being put out. There has also been some semblance of if people are worried about safety and security, pricing won't make a difference, so let's not go that deep.
Q: How about hotels? What trends are you seeing in that sector?
A: What we have been seeing is two things. And one is people leaning in on brands they know and trust, really trying to dig into all the different touch points that are available with content on their protocols and what they're doing.
I think you're seeing some people saying, "I want to start off with something secure, with a brand I trust, [where] I know that what happens in the protocol video [posted on the brand's website] is really going to happen."
So in that regard we are seeing more popular and higher-end, four-and-a-half, five-star hotel sales coming back faster.
The other thing that we're seeing is we went very aggressively to try to recapture people who were canceling. And what we are finding is that the quickest return customers rebooking are the longer-stay customers. That's an interesting dynamic in that people that really were focused on going someplace and spending a lot of time, they want that vacation back. ... They are faster to come back than someone who said, "Hey, I was going to shoot down to Cancun for a three-day weekend. That's not a trip I really need to have right now. I'll just move on."
Q: Where do you see people most wanting to go right now?
A: Cancun is really winning the international comeback. It is really outplaying other destinations. If you were to look at it as kind of top of the chart, it's Cancun. Moderate is Jamaica, and then we have Punta Cana and Costa Rica kind of lagging a little bit. I think with Punta Cana it might be a little effect of some of the challenges we were having earlier. So we're working very closely with the tourism board and the hotel association there to get the word out and kind of change that perception.
Q: Generally, how are things going?
A: For us, we are still seeing 2020 new bookings being slow to return. And we have a position that we think that more consistent travel will happen in November and beyond. I think there's a lot of people in the wait-and-see approach. But we do have a very strong base of business. We have hundreds of thousands of people on the books for the summer, and our goal is that they will travel.