As Covid-19 cases continue to surge across the country, travel companies report that a much-hoped-for recovery in domestic and regional travel this summer has largely stalled, dimming hopes for any meaningful rebound before 2021.

After a hopeful upturn in May and June, during which advisors, hotels, airlines, cruise operators and tour companies all began reporting an increase in bookings, travel companies say sales began to plummet.

"The summer is gone," said Jack Richards, president and CEO of Pleasant Holidays, which in May launched a series of packages in secondary U.S. cities designed to tap anticipated demand for close-to-home summer getaways.

"The overall demand for travel remains very weak," he added. "We were very encouraged with bookings and sales in the month of June through the July Fourth holiday. We had nice pickup, including a lot of last-minute stuff. After the Fourth of July, everything just stopped."

Charles Robertson, CEO of American Cruise Lines, which operates river and small-ship coastal cruises that are exempt from the Centers for Disease Control and Prevention's No Sail Order, said that while the line still hopes to restart river cruises at the end of August, people are "increasingly hesitant to get out there this summer. We are seeing a drop in demand, that's for sure.

"It seems like every day, instead of getting one step closer to the end, we take two steps back," he said.

Indeed, according to the latest Travel Weekly poll, 23.4% of advisors reported domestic queries dropped from May and June to July, although most, 60.9%, said domestic bookings were unchanged.

Summer domestic travel stalls; hopes for a quick rebound fade

And 66.7% respondents in the online poll of 842 advisors conducted July 24 through July 28 reported that overall domestic booking activity is down this year.

Bookings for regional travel, which was widely forecast to follow domestic travel in the recovery cycle, appear to have dropped more dramatically. The poll showed 36.4% of respondents reported bookings to Mexico were down in July from May and June levels, while 43.2% of respondents said Caribbean bookings had dropped.

Summer domestic travel stalls; hopes for a quick rebound fade

Joshua Bush, CEO of Avenue Two Travel in Villanova, Pa., said that after the pandemic was declared, his agency began seeing two trends: people looking for national park visits and drive destinations and others forgoing 2020 vacations but doubling down on plans for 2021.

However, after the July surge in domestic Covid-19 cases, he said, "things started to drop off precipitously."

Paul Metselaar, CEO of Ovation Travel Group, agreed, saying that "we've kind of flatlined again."

"I think people are just playing a waiting game right now," he said. "It's all about trust and confidence. We have zero now. We had about 10% trust and confidence a few weeks ago, and that's been extinguished."

Summer domestic travel stalls; hopes for a quick rebound fade

Data from airlines and hotels underscores the drop-off.

Southwest Airlines reported in its earnings call last month that from the beginning of July to the end of the month, its bookings declined about 10% to 15%. American Airlines, meanwhile, reported that its July bookings were down about 75% to 80% year over year. Delta also reported dropping demand, particularly in the South.

Likewise, domestic hotel performance backpedaled in July, according to STR senior consultant Hannah Smith.

"We hit the bottom for the industry the week of April 11, and it had been improving, but we saw a reversal of that with the week ending July 4," Smith said in a recent Americas Lodging Investment Summit Summer Update webinar.

"Everyone was projecting a big week for the industry," she said. But the week coincided with some areas, including Texas and Florida, reclosing beaches and bars, "and that caused a rollback in occupancy in a lot of those markets."

Although the number of rooms sold in subsequent weeks returned to positive territory, STR said, week-over-week demand increases have slowed overall. And demand has dropped in states with high infection rates.

In South Carolina, for example, hotel demand was down 15.5% for the weeks ended June 27 to July 11, while Arizona and Florida saw declines of 9.9% and 7.4%, respectively.

California also saw a pullback in July, said Lynn Mohrfeld, president and CEO of the California Hotel and Lodging Association. "And I haven't heard anyone say good things about August bookings."

Jamie Lane, senior research director of Econometric Advisors and CBRE Hotels Research, said that "July, August and September bookings are definitely under what we expected back when the recovery started in April and May."

Ray Snisky, president of Apple Leisure Group Vacations, which sells domestic destinations as well as Mexico and the Caribbean, said that while they too saw the market soften in July, bookings started to go back up last week.

He said Cancun remains a bright spot for them. And both he and Richards say high-end all-inclusives are among the best sellers.

However, guided travel operators -- many of whom began putting together additional domestic packages to tap the expected rise in demand by Americans blocked from traveling to some international destinations or afraid to leave the country -- continue to push back their start-up dates.

"We were lined up and ready to go months ago," said Steve Born, chief marketing officer for the Globus family of brands. But he said uncertainty about what would and wouldn't be open has prevented them from launching the trips.

The good news, he said, is that the promotion of their new Undiscovered North America packages "really triggered a lot of energy around 2021" demand. 

Likewise, the Travel Corporation has pushed back its domestic and global restart until December.

And Tauck CEO Dan Mahar said they have canceled plans to begin running domestic trips in September because of "the increased surge in Covid-19 cases and cross-state border complexities."

Carol Dimopoulos, president of Perillo Learning Journeys, said the only real demand they are seeing is for luxury resorts in nearby drive destinations. 

Otherwise, she said, "Everyone I know is renting an RV."

But even drive vacations are down from last year, according to AAA. The group estimates Americans will take more than 700 million trips, 97% by car, from July 1 though the end of September. Overall, however, AAA says summer travel is down nearly 15% compared with last year and is the first decline in summer travel since 2009.

Even demand for the quintessential all-American road trip to national parks is soft in some areas.

Betsy O'Rourke, chief marketing officer for Xanterra Travel Collection, which operates a number of hotels across the national parks system, said that while Yellowstone, Glacier and Zion are sold out, Grand Canyon properties are running about a third less occupancy than past years, likely due to high Covid-19 rates in Arizona. Oasis at Death Valley also has rooms, she said, likely due to rising cases in Los Angeles as well as the July and August heat.

"In short, we continue to see bookings but then close-in cancellations," she said. "Our belief is people want to travel, book the trip and hope that things will be better by the time they plan to travel, and then if it's not, they cancel."


Jamie Biesiada, Christina Jelski and Robert Silk contributed to this report.


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