Domestic USA hotel booking volume now over half of Pre-Coronavirus levels
Sharing data on the pickup of domestic travel in the USA
As the coronavirus spread around the world, travel dropped precipitously. Airlines cut staff, cruise ships remained docked, and hotels shut their doors. With borders closed for the indeterminable future and caution predicating every consumer decision, travel largely moved to a standstill. However, as restrictions lighten, we are noticing signs that consumers are eager to participate in domestic travel. Let’s dive into the numbers.
Week over Week GMV Growth
A common metric used to measure an OTA’s (Online Travel Agency) sales is to look at GMV (Gross Merchandise Volume). This is the total top-line value of sales. I.e. If a customer books a hotel room for $200 — the GMV would be $200.
We took a deep dive into US domestic GMV (i.e. Americans booking hotels in America) to better understand how and when travel is occurring. Here is what has happened to GMV over the past few weeks.
- Feb 24th Week — Let’s take this as the high point (pre-coronavirus drop)
- Mar 2nd, 9th Weeks — Small decreases in GMV (~6% / week)
- Mar 16th, 23rd, 30th Weeks — Large decreases in GMV (~45% / week)
- Apr 6th Week — Bottom out! An 80% decline from pre-coronavirus levels
- Apr 13th — May 11th Weeks — ~15% week over week increases.
- May 11th Week — Our most recent complete week. This represented a 136% increase from the low-point (week of April 6th) and brings us to ~54% of Pre-Coronavirus levels (week of February 24th).
Let me reiterate for emphasis:
US Domestic hotel bookings are now at 54% of pre-coronavirus levels
Recovery differs by state
Hotel booking volume in different states are recovering at different times. This is largely influenced by government policy related to when hotels can open. Let’s take a closer look at booking trends in a few large and interesting states:
- Florida — (58% of pre coronavirus levels) — The biggest change in booking volume has occurred in Florida, a state that has been among the earliest to re-open the hospitality sector, with restaurants, gyms and malls now operating at reduced capacity.
- California — (48% of pre coronavirus levels) — Strong uptick in booking volume for the past few weeks. We expect this to continue as the state cautiously re-opens several urban hubs like LA and many public beaches.
- New York State — (27% of pre coronavirus levels) — The hardest hit area in the world. New York City went into a lockdown on March 22. We’re seeing a relatively flat booking curve over the past few weeks.
- Nevada — (20% of pre coronavirus levels) Las Vegas went into a shut down mid-March, with the largest casinos in the world shutting their doors. With casinos and hotels still closed, bookings have remained flat.
New York City vs New York State
A closer look at New York provides us with some interesting insights. As an epicenter for COVID-19 transmissions, NYC has endured some of the highest transmission levels and the most strict stay-at-home orders. In this environment, New Yorkers still want to get away and are favoring less densely populated areas.
Traditionally, NYC would account for over 60% of GMV in the state. In the last 2 months as the city is on lockdown, consumers have stayed away opting to book elsewhere in the state. In the most recent week, NYC only made up 24% of bookings in New York State.
Doing our part to put customers at ease
During these uncertain times, we have been fortunate to see a stronger recovery in hotel bookings relative to the industry. A key component has been our ability to put the customer at ease.
1 — Messaging provides comfort in an uncertain time — Snaptravel is built on top of popular messaging platforms. This means that customers can effortlessly reach a live human agent 24/7 if they have any questions, concerns, or just want reassurance. This human connection is critical in helping customers make these difficult decisions.
2 — Transparent cancellation policies — While a large volume of the bookings are coming in with a short lead time, there has also been an uptick in bookings that are 60+ days out. For these customers, having a transparent cancellation policy is extremely important in this period of uncertainty.
Who is travelling in May 2020?
The pickup in booking volume paints an interesting picture in terms of customers booking patterns and behaviours. We have seen more of a focus on short lead times. Customers are more often booking for same-day and next-day check-ins. We have also seen a partial recovery in customers booking refundable rooms that are 60+ days out. The biggest drop-off are the bookings with lead times between 3 days and 60 days. While all these numbers are interesting, it doesn’t really capture the why. We decided to ask our customers so we could learn more.
A portion of Snaptravel customers received a simple question during the booking flow:
What is the purpose of your stay in this hotel room? We kept this as a free form question so we could capture the motivation of why people were travelling in their own words. We then looked at all the responses, and divided them into three groups; leisure, work and essential travel. Something like a wedding or a beach visit would count as ‘leisure’, whereas a booking to self-isolate or to attend a medical appointment would be categorized as ‘essential travel’.
- Leisure: Whether it’s to celebrate an occasion like a birthday or anniversary, or simply to relax, 65% of our domestic travel last week was leisure. One interesting trend was the number of times travellers cited needing to ‘get out of the house’
- Work: 23% of bookings were related to work. The assumption is that most of these ‘work’ trips are cases where our customers need to physically be present (i.e. truck driving, factory, delivery…)
- Essential: 12% of our bookings were made for essential travel, including visits to medical professionals, hotel stays to self-isolate from loved ones, and funerals. Another common reason in this category were bookings due to eviction or homelessness.
Looking Forward
While it’s still early to call the recovery of the travel sector, the data is promising for the US domestic travel market. It is quite honestly surprising given that we are not far removed from the top of the curve in the USA. With each state using vastly different tactics to manage the pandemic, we expect that the eventual return to travel will not be evenly distributed. As with our peers in travel, we remain cautiously optimistic at these signs that we have endured the worst of the storm.
Who is Snaptravel?
Snaptravel empowers customers to find and book hotel rooms over a conversational interface (SMS, Facebook Messenger, WhatsApp, Alexa…). We use NLP and ML technology backed by humans to recommend hotels and deliver a delightful experience.
We have driven over $200MM+ in sales exclusively over messaging. We have raised ~$20MM USD from tier-1 investors including iNovia, Telstra Ventures, Peter Kern (CEO at Expedia) and NBA Superstar Steph Curry.
