It’s looking good for Americans to think about travelling to Europe again this summer.
With the news that the EU is ready to open its borders to vaccinated foreigners, Europe’s luxury brands and department stores can be cautiously optimistic about overseas shoppers returning this summer.
EU open for business
The EU has announced it will ease travel restrictions for non-EU visitors in plenty of time for the summer tourist season, meaning the bloc is open for business for the region’s biggest overseas visitors, both from the UK and the US.
Ambassadors from the 27 EU countries approved a European Commission proposal from 3 May to loosen the criteria to determine “safe” countries and to let in fully vaccinated tourists from elsewhere, EU sources said, reported Reuters.
The EU is expected to provide an update on its Digital Green Certificate program, which will allow travellers to share their vaccine status via a QR code on a smartphone app. Once the vaccine certificate is available, each EU member state will be able to adopt the same entry requirements for visitors. Fully vaccinated travellers will be allowed to enter any of the countries without having to quarantine upon arrival or provide recent negative test results, with the newly eased rules applying to ‘white-listed’ countries that have controlled the Covid outbreak to the standard decreed by the EU – aka a 14-day average of under 75 new daily cases per 100,000 people.
Since the EU announced it planned to lift its bloc-wide travel restrictions, trans-Atlantic airfare searches spiked 47% according to the last-minute travel app Hopper, that said the surge was a direct result of EU Commission President Ursula von der Leyen’s comments that strongly indicated vaccinated Americans may be able to travel to Europe this summer.
London, Paris and Barcelona are the most popular European cities by total searches, however Hopper’s data showed Denmark (+84%), Poland (+72%) and Switzerland (+63%) saw the greatest percent change in searches following Leyen’s comments on 25 April, reported CNBC.
“Internationally, we’re seeing great optimism for Europe’s reopening,” Misty Belles, MD at Virtuoso, aglobal luxury tourist group, commented to CNBC.
While Greece and Iceland are popular for American tourists at the moment, the top European destination for the firm is Italy, illustrating that people are eager to return to their favourite spots, she said.
Vax n go
Spurred on by a return to domestic travel, Americans are clearly becoming more confident for overseas travel, especially as the country moves closer to President Biden’s goal to have 70% of Americans vaccinated by 4 July.
In the US, there are new incentives being rolled out to encourage vaccines as demand starts to slow. In New York, Governor Como announced a $5m ‘Vax n Scratch’ lottery, which promises a one-in-nine chance of winning $20 for first time vaccinations. The White House is also promoting vaccinations via a partnership with popular online dating apps that gives users perks in exchange for proof of a jab.
Furthermore, ‘Vaccination Tourism’ is a fast-paced trend, especially in the Americas. It is being seen as a boost to encourage continental travel between Latin America and North America, and comes shortly after IATA revealed research that showed the majority (81%) of travellers would get a vaccine in order to be allowed to travel.
The latest travel trends from Destination Analytics point to increased optimism from American travellers, as national vaccination rates continue to rise: 73.4% of American travellers have or will get vaccinated. Of those who have been inoculated, 87.3% are more comfortable with the idea of travelling. Overall, nearly two-thirds of American travellers believe the pandemic situation will improve in the US in the next month. They are actively planning to travel: 77.5% of Americans dreamt and/or planned travel, with one-third reporting that they researched travel ideas online. And they are actually making bookings: so far in May, 18.7% of American travellers made a travel booking and/or reservation, primarily hotels (56.9%) and airline tickets (43.5%).
Economy on the up
Americans have turned to travel again as a sign of their growing confidence in the US’s economic recovery. Aided by pandemic stimulus money, they paid off a record $83bn in credit card debt in 2020.
According to market research by YouGov and The Economist, confidence in the economy has returned to pre-pandemic levels: For the first time since the coronavirus pandemic began, Americans are split on whether the economy is on the rise or in decline. The survey, conducted among 1500 adults, in the first week of May, asked: “Overall, do you think the economy is getting better or worse?” Roughly 30% said the economy was on the upswing, 30% said it was trending downwards and 28% said it was about the same.
And vaccinated Americans have been increasingly going out this spring, their spending on entertainment and leisure venues was up 10% in April, according to survey data from market-research firm Cardify.ai.
Meanwhile, footfall in airports is the highest it has been since March 2020, according to the Wall Street Journal, that reported ‘passenger volumes at US airports hit pandemic records [in mid-May], with more than more than 1.7 million people passing through airport security.’ Furthermore, United Airlines is adding more than 400 daily flights to its July schedule and is increasing service to reopened European destinations. The move marks United’s largest monthly schedule since before the pandemic. Summer travel is up 214% compared to 2020 levels.
However, while the news that domestic air travel is on its way to recovery in the US, it’s not yet a sign of international travel doing the same. That may well depend on how the US government continues to debate whether to allow more foreign travellers to visit.
But there are small gains on European capacity, according to aviation data specialist, OAG. It reports Europe’s seat capacity continues to grow with 440,000 more seats in Western Europe and 140,000 in Eastern Europe – suggesting some optimism that we will have a summer season in Europe.
Despite the positive outlook for Americans to travel, the level of domestic airline capacity in the US is not quite back to 2019 levels and is currently running at around 75% of May 2019 levels and assuming capacity holds, will reach 88% of July 2019 numbers. This would certainly reflect both growing demand and perhaps more importantly market confidence, as vaccination rates rise and infection levels fall further, the specialist suggests, in a blog post.
Americans are also searching for more remote vacation options, according to Airbnb data, that cites from recent searches for Memorial Day trips (seen as the unofficial start of summer in the US), nearly 70% are for off-the-beaten-path locations.
One key highlight from the global travel specialist is that travellers are seeking out more flexible travel options. In its latest 2021 trends outlook, Airbnb’s survey of 1500 users, revealed an “overwhelming” desire for more flexibility in travel. Among the site’s booking searches in April, 40% were for flexible dates and locations, or both.
So, what does this all mean for travel retail? Americans are traditionally big travellers in Europe and they’re big spenders too. When they can travel again, they will. And they’ve missed Europe, so while the popular touristic and cultural hotspots in France, Italy and Spain can expect to welcome back Americans in search of a bit of R&R plus shopping, it’s less likely they will choose to travel over the water to the UK.
This would mean undertaking a little extra paperwork to enter Great Britain after Brexit with slightly more cost thanks to the new ETA entry visa requirements and far fewer dollar savings for luxury purchases further to the (definitely) cancelled tax-free sales and VAT Retail Export Scheme.
It remains to be seen if some of London’s biggest shopping attractions – Harrods, Selfridges, Liberty, Hamleys, Burberry, Savile Row, Regent Street, Bond Street or even Bicester Village, will offer new incentives in place of previously influential tax-free shopping savings, by making their stores more experiential and perhaps linked to cultural partnerships? We hope so.