Sneaking away during the lull between peak times – “the shoulder season” – is popular with savvy travelers for reduced crowds, milder weather and usually great deals on travel packages.
Tired of the brutally hot summer in the south? Walk the vineyards at harvest in Tuscany. Not looking forward to the long cold months upcoming in New England? Chase the summer down to Cancun. All for considerably less than you’d pay in summer, while the under-21 crowd is back in school.
But this year, travel – like everything else – looks quite a bit different.
The headlines change about every time you refresh your browser as restrictions, qualifications and confusion plague the shoulder season. What used to be a relatively simple and inexpensive time to get away has become much more complicated. Let’s look at the complexities associated with autumn travel plans in 2020.
The Travel Supply Chain
What luck! You’ve found an all-inclusive, week-long cruise to Honolulu in October for your whole family! It costs less than it did for you and your spouse to go last fall, and now you can bring the kids!
But when you get there, you better hope you enjoy the boat, because that’s where you’ll be staying! A mandatory 14-day quarantine is still in effect there right now and doesn’t show signs of letting up. Most of us can’t afford the time (or money!) to pop off to Maui for more than two weeks, especially at this time of year, so now the deep discount on the prices makes sense – and not in a good way.
Other travel issues affect what might be called the “supply chain” of travel, even during the shoulder season. Social distancing measures and quarantine restrictions aren’t the same all over the world. You might be in a safe environment at home in Chicago and then land in a virus hotspot where the restrictions are more relaxed. Carrying the virus back with you, even if you never show symptoms, is a real possibility as we all know.
If you can come back at all. Airlines have closed and reopened a few different times in different parts of the world. While you’re gone, could the border close before you get back home? What about your layover? Will the planes be grounded? Besides quarantine, these are the kinds of variables that keep people at home and on the ground.
Problems for the Tourism Business
From the business side of the question, the losses hurt and will probably hurt for a long time. A UN report estimated $3.3 trillion in losses for tourism in 2020, an astronomical number that will take years to recover.
Think about it in practical terms. A cruise ship might have around 1,000 staff members. No cruises means no revenue, so these crew members are sent home because of lack of work, many of them to other countries.
If the virus suddenly disappears, this isn’t a turnkey operation. Cruise lines can’t simply open up without trained crew members, who might be all around the world at this point. They also can’t run for a month until the restrictions change again. So recouping money lost during the pandemic is a matter of years, not months.
On top of this, collateral business will be affected, probably long after quarantine is over. For cruise ships, the many ports that run everything from posh clinics to tchotchke souvenir shops are ghost towns. For college football cities like Auburn, Alabama, and Lincoln, Nebraska, the bars and restaurants are notably empty.
Add to this the crime that can be part of life in some vacation destinations. Scarcity and desperation can make this worse and will keep on-the-fence travelers away.
The overall markets showed record volatility this year, but for the most part have plateaued. S&P growth has slowed but continues to increase. But there are major parts of the economy, such as tourism, that have been devastated.
The International Air Transport Association estimates that it will take until 2024 for air travel to return to pre-pandemic levels. It’s too early to tell what kind of long-term effect these issues will have, but we could be looking at discounted and otherwise complicated travel for a long time.
Keeping it Close to Home
Necessity, or at least inconvenience, births another one of the great American virtues: innovation.
Take for instance the industry that is booming: outdoor retailers. Kayaks, fishing rods and bikes are disappearing off the shelves like toilet paper in April, and campsites are packed in.
Tourism to favorite in-house destinations, which we may remember from decades past, is becoming popular again. Mt. Rushmore, Yellowstone, even old Route 66 will probably sell more t-shirts and oversized novelty pencils than they have in years.
Costco has long been a provider of affordable vacation packages. Now they feature the national parks to their list of possibilities alongside tropical and European locations.
Shrugging in the Shoulder Season
So where does that leave us in the “shoulder season” of 2020? On the one hand, we may be looking at fantastic discounts and affordable vacations we’ve always dreamed of. On the other hand, the safety of our families and communities could be endangered if we travel carelessly.
And while we might take the easier solution – just don’t go – we still need to practice self-care. Our physical and emotional health will decidedly affect our financial health.
Innovation will be the name of the game. We have to think more comprehensively and creatively about what “vacation” means. That could mean considerably more planning ahead, such as using COVID Controls, an interactive website that shows updated travel restrictions around the world.
Innovation also means rethinking “staycation” in the pandemic world. National parks, museums, local monuments can offer us a chance to relax and get our mind off work or other stresses. If you have kids in the mix, a hotel pool can be (just about) an exotic vacation. Catch a musical, eat steak every night and make the most of staying in place.
More than likely, you’ll be spending less money on your autumn travel plans in 2020. That means more to invest, or it could mean putting something toward a make-up trip in the spring. Seeing Madrid or London in the warmer months is amazing, but it feels even better when it’s fully paid off with pocket money left over.
How can we help you plan for this unprecedented year? Get in touch today to talk through your portfolio with your financial advisor.