FCM Travel Solutions' Peter Psaltakis
Travel safety protocols and the science backing them are critical to mitigating rampant virus spread, but until Covid-19 is eradicated globally, the physical act of travel poses an elevated health risk. Despite the industry's efforts to increase cleanliness and consumer confidence, travelers cannot truly escape the virus until society achieves the CDC's estimated 60 percent-plus herd immunity threshold, whether via vaccination or through infection.
Fortunately, December 2020 has turned out to be the watershed month of this pandemic.
- Advantage: Effective vaccines from Pfizer-BioNTech and Moderna have begun emergency deployment in some countries. Further, Johnson & Johnson, AstraZeneca, and Novavax are showing great promise.
- Disadvantage: Cases, hospitalizations, and death rates are exploding and only going to accelerate in January with the winter holidays.
We therefore need to exercise cautious optimism about how to ease back into meaningful travel, gatherings, and ultimately post-pandemic living.
Risky Business
Let's look at the research:
- The CDC estimates that 53 million people in the U.S. had contracted Covid-19 by the end of September, back when the case count was 6.9 million. This suggests a 13 percent detection rate.
Now let's do some math:
- As of Dec. 29, the US has 19.4 million confirmed cases.
- If the CDC's estimate scale proportionally, then 149 million people in the U.S. today might have had Covid-19. This represents 45 percent of Americans.
We can conclude that traveling in the U.S. and similarly distressed countries remains a pervasive risk until unchecked spread meets mass vaccination.
What does this likely mean for travel in 2021?
- Domestic travel will rebound by summer in highly vaccinated countries.
- Travel bubbles between transborder neighbors might finally prove effective.
- Select international routes should enjoy higher volume by midyear.
- Numerous international borders ought to reopen by early fall, however some will remain closed until 2022.
My recommendation for the industry is to continue patiently waiting for its big break.
Enter the Dragon
Asian countries like China, Taiwan, Japan, South Korea, Vietnam, Thailand and Singapore have done remarkably better jobs controlling the virus by enforcing stricter nonpharmaceutical interventions like mask mandates, limiting movement and restricting gatherings. As such, their national economies should shift into higher gear quicker when compared with countries in the Western Hemisphere.
For travel buyers, this phenomenon could further skew business eastward, particularly if Covid-19's unknown long-term health impacts disadvantage a disproportionately higher percentage of the Western workforce.
China will undoubtedly emerge as Covid-19's leading economic beneficiary and experience accelerated long-term growth thanks to new relationships engendered this year by Beijing's "mask diplomacy." Its aggressive geopolitical stance will command the globe's attention over the 2020s and continually chip away at international business travel market share from regions like the Americas and Europe.
Independence Day
Despite quantum leaps in vaccine readiness, the rush to freely travel again should be tempered until the "all clear" signal is given by top governing bodies.
While this may be an incredibly tough pill to swallow, the forecast for 2021 is partially sunny given that 220 million of 328 million U.S. citizens should be eligible for a priority vaccination:
- About 20 million healthcare workers
- About 50 million aged 65 years or older
- About 100 million underlying health conditions
- About 50 million essential workers
A recent Gallup poll found that 42 percent of Americans said they would not get a vaccine. Therefore, it's estimated that willing Americans should be able to get vaccinated by May 2021.
According to a personal favorite newsletter, Financial Samurai: "based on the assumption that vaccine doses will be administered starting in December 2020 at a pace of 20 million a month, we're talking a realistic freedom date of July 4, 2021."
This should materialize similarly in developed countries.
Hope is right around the corner…
Apocalypse Now
… unless you live in a low or middle-income country.
According to the Duke Global Heath Institute, low and middle-income countries might not be immunized until 2024 due to limited vaccine production capacity and "vaccinationalism." Wealthier countries had already claimed stake to more than 5 billion doses of vaccines before clinical trials even were completed, leaving fewer than 800 million doses for the world's poorest countries.
Global recovery will consequently be inequal and closely parallel socioeconomics, widening the chasm between have and have-not nations—and thus, intermediate-term travel patterns.
It's A Wonderful Life
An invisible, indiscriminate and omnipresent enemy has upended life as we knew it. Covid-19 has ushered in political, economic and social changes that we will collectively feel for years to come.
Yet I'm tired of the gloomy, short-sighted "new normal" prophecies. Hopefully by this time next year, we will have family and friend gatherings again. Sports arenas and concert halls will get packed. Students will learn in classrooms. And we'll shake hands with friendly strangers we just met at the airport bar.
Be thankful for what you have today and hold onto it dearly for a better tomorrow. In the words of Howard Jones, "things can only get better."