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As the weather warms, consumers traditionally start thinking about where to spend their hard-earned vacation time. At least, that’s usually the case. According to the United Nations World Tourism Organization, the COVID-related decline in international travel in 2020 resulted in an estimated $1.3 trillion loss in global export revenues. That loss is more than 11 times the deficit resulting from the global economic crisis more than a decade prior.
With the industry in serious need of recovery and consumers slowly taking to the skies again, here are a few leading brands looking for a summertime bounce-back.
With more than 6,400 properties in 119 countries that include the Waldorf Astoria, DoubleTree, Embassy Suites, and over a dozen other brands, Hilton’s marketing team is undoubtedly working hard to coax vacationers and business travelers back to its properties. Hilton reported a net loss of $225 million for its 2020 fourth quarter, compared with net income of $176 million for the same period in 2019. For 2020 full-year, the hotel operator’s net loss totaled $720 million compared with a net gain of $886 million in 2019.
The company is banking on travel returning to some semblance of normalcy, having announced plans to build up its presence in Thailand by up to 2,000 over the next 24 months and expand its upscale DoubleTree by Hilton brand in Islamabad, Pakistan, in 2025. Hilton also announced the opening of Virgin Hotels Las Vegas, Curio Collection by Hilton. The property consists of more than 1,500 chambers and suites, an exclusive spa, 12 food and beverage outlets, daytime and nighttime live entertainment venues, a 60,000-square-foot state-of-the-art casino and more.
The world leader in online travel and related services, Booking Holdings brands include Booking.com, Priceline, agoda.com, Rentalcars.com, KAYAK and OpenTable. Virtually all of these brands suffered a brutal 2020. Fourth-quarter 2020 gross travel bookings for the holding company were $7.3 billion, a 65% decrease from the prior year, contributing to a net loss of $165 million, compared with net income of $1.2 billion in the fourth quarter of 2019. To entice tourists, Booking Holdings brands are creating new incentives and travel-related services.
Rolled out late last year, Priceline VIP is a multi-tiered rewards program that offers discounts of up to 50% on over 45,000 name-brand hotels and up to 20% on rental cars. Other VIP perks include early access to future sales, exclusive coupons, and even deeper discounts as status levels increase. Booking Holdings’ KAYAK brand is looking to go beyond a travel search engine, having announced plans to open its own hotel in Miami Beach this April. Hotel operations will be integrated into the KAYAK app, providing 24/7 access to hotel staff and support, notifications of on-property events, room-ready alerts, itinerary management, housekeeping requests and more.
With more than 30 million members, Travelzoo is a global Internet media company that publishes deals from more than 2,000 travel, entertainment and local businesses such as restaurants and spas. While the company’s fourth-quarter consolidated revenue totaled $12.5 million, a 51% year-over-year decline, March 2021 was Travelzoo’s strongest month since pre-pandemic March 2020. As a result of the recovery of revenue and substantially lower operating expenses, the company expects to either come close to the break-even point or post a profit for its first quarter. Despite the travel industry’s uncertainty, Travelzoo shares are up more than 400% for the trailing 12 months ended March 30, 2021.
Described by CEO Ed Bastian as “the toughest year in Delta’s history,” passenger revenues for the major airline declined 70% in 2020. As a result, the airline went into cost-savings mode, reducing its average daily cash burn to $12 million in the December quarter, nearly 90% lower when compared to the early days of the pandemic. With passengers slowly returning to the skies, Delta is employing a few strategies to boost sales. These include extending the deadline to use purchased tickets to the end of 2022, bringing snacks on board again and offering hot meals in its Delta One or first-class cabins on certain transcontinental flights.
In an abysmal 2020 in which total revenues declined by 48%, the second-largest American car rental company adapted by realigning its fleet, consolidating locations and staffing to the reality of pandemic-level travel demand, cutting all non-essential spending and capital expenses. Hertz, whose brands include Dollar and Thrifty, filed for Chapter 11 bankruptcy last May in a plan that included the sale of substantially all of the assets of its fleet management subsidiary, Donlen Corporation, for $891 million in cash proceeds. Hertz plans to emerge from Chapter 11 this June.
With business and leisure travel slowly picking up – boosted in part by the global vaccine rollout – brands such as these could be poised for a much-needed comeback in 2021.
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