internationallyTHE BARRIERS AND

OPPORTUNITIES TO TRAVELLING

It may seem ambitious to be talking about international Travel when we’re still experiencing issues with travelling interstate, but here at News Corp Australia we are committed to understanding all facets of the travel industry in a bid to better predict life post-pandemic for our clients and customers.

It is likely that some international corridors will open in 2021, assuming things keep going the way they’re going and we don’t experience any more serious outbreaks. Having even a small part of international travel available will, of course, be a confidence boost and the first countries opening corridors in a real way will be watched closely by businesses, consumers and countries alike to determine how well it’s managed. I’m not saying it’s just like the moon landing, but the resumption of international travel is something many are waiting for with bated breath. Moreover, the survival of many businesses depends on it.

Australians want to travel overseas. We are a country built on getting away, in part, because we live in a more isolated spot than the rest of the world.

In a recent poll we ran, 45% of Australians plan to

travel overseas in the future, proving that the appetite for international travel has not waned**. Our Escape.com.au readers have been heavy consumers of content related to the below international destinations; the US and Japan have consistently sat in the top five for the past seven months*.

The international market and consumer

Dwayne BirtlesHead of TravelNews Corp Australia

Cover; man relaxing in a swimming pool with view

towards New York City skyline.This page; tent in the desert .

Outside of travelling for leisure reasons, there’s also a deep-seated desire for reconnection, with a quarter of Australians having friends or family overseas that they haven’t been able to visit due to the pandemic**. As international destinations open, we anticipate an explosion of visiting friends and relatives (VFR), with consumers jumping on planes for their long-awaited “journeys of connection”. Opportunity exists to encourage these travellers to extend their holiday for longer, for example with a cruise or tour, rather than simply staying at their friends and families houses for the duration of their holiday.

With many people being restricted for so long, it’s likely that Australians will squeeze everything they can out of their next international holiday. With over 11 million overseas trips taken by Australians pre pandemic (2018-19)***, it’s likely that number will be surpassed in the next few years. With the resumption of international travel undoubtedly being staggered, it will be a gradual increase over a couple of years.

Does this consumer interest to travel internationally come with emotional baggage? Absolutely. The anxiety

“AUSTRALIANS want to travel overseas. WE ARE A COUNTRY BUILT ON GETTING AWAY, IN PART,

BECAUSE WE LIVE IN A more isolated spot THAN THE REST OF THE WORLD.”

Australians have about travelling within Australia is exacerbated for international travel, with the investment of time, money and emotion a step up. However, there is opportunity for travel businesses to provide customers with some level of comfort.

The Nervousness Around International Travel

In a year of continuous border shutdowns and a travel industry in disarray, a travel booking decision comes with more nervousness than in pre-pandemic days. The level of concern when travelling internationally is, of course, considerably higher than when travelling domestic, with 42% of those polled saying they are extremely concerned, compared with only 3% saying they are extremely concerned about travelling within their own state and 6% for intrastate**. This concern is a by-product of the unknown. How successful will international corridors opening be? What will state, national and international governments do if there’s an outbreak? How will travel companies look after their customers if things go wrong? Is the risk of catching COVID-19 higher overseas than at home?Source: Adobe Analytics Escape.com.au Website Report, Nov 2020 - Jan 2021

NOV-20 DEC-20 JAN-21

1 USA Canada Japan

2 Japan Maldives USA

3 Canada Bali Italy

4 Italy Japan Maldives

5 Maldives USA Greece

6 Singapore Italy Vanuatu

7 Vanuatu Vanuatu Canada

8 Bali Greece France

9 UK Vietnam Bali

10 Greece Thailand UK

When it comes to creating confidence, there’s no such thing as over-communicating. Messaging in-destination will also be crucial and will provide an advantage for countries and businesses that do it well. There’s no doubt this is complex, particularly with the language barrier for Australians who travel to non-English speaking countries. But it’s also a great opportunity for travel businesses – if they can reduce this complexity and provide ease of mind.

The fear of future international travel is driven by border shutdowns and the fear of being stranded overseas. When we polled Australians in September 2020, their top two concerns about future holidays were borders closing at short notice and being stranded away from home****. Travel businesses who plan and offer contingencies for overseas travellers will be preferred by consumers.

As a hypothetical example, let’s say a customer was travelling around Italy. The country was about to go into lockdown, but neighbouring countries in Europe were still functioning normally. In this case, imagine a business that could seamlessly move the client to a neighbouring country, including all elements of their holiday such as accommodation, flight transfers, departure flight back to Australia.

We must acknowledge that the number one attribute Australians are looking for from travel businesses is reliability. The planning and booking framework/arrangement pre-trip could include a selection of back-up destinations that the customer is happy with in the event of a country or border shutdown. This is not without considerable logistical and operational challenges, of course, but the businesses that take itinerary and risk management to the next level for consumers will win.

Customers Want Certainty and Clarity

Businesses must provide a high level of certainty to travellers when they take the international travel plunge. When looking at reasons why Australians haven’t booked their next holiday, we identified some large differences between international travel intenders versus intrastate and interstate intenders.

The number one reason international intenders had not booked their next holiday was uncertainty around refund/cancellation entitlements (42%); this is seven percentage points higher than with interstate intenders, and eight points higher than with intrastate intenders.

One of the largest differences in reasons for not booking was with confusion around what is covered under travel insurance, with international intenders sitting at 17% versus 11% for interstate and 9% for intrastate intenders**.

Being fully transparent about what a customer will receive if things go wrong is not an easy feat, but if a customer doesn’t feel protected and informed, they will go to someone who makes them feel that way. Providing full flexibility on a booking before the trip commences is one thing; providing full cover during and after the holiday is another thing completely. This is where the insurance conversation comes into play.

We know it’s possible for travel businesses to include cover for their customers in the event of customers being diagnosed with COVID-19. Etihad was an early mover in offering cover via its “Global Wellness Insurance” which covers all costs from medical to quarantine costs. Travel insurance businesses have also come to the party with COVID-19 cover, such as Cover-More providing insurance for Australians who are travelling domestically or within

Row of beach umbrellas at Mediterranean seaside

paradise of Positano, Italy.

On a scale of 1-5, how concerned are you about going on a holiday to the below destinations?

Reasons why you are waiting before booking your next holiday?

“The number one reason INTERNATIONAL INTENDERS HAD NOT

BOOKED THEIR NEXT HOLIDAY WAS uncertainty around refund/cancellation ENTITLEMENTS”

Source: News Corp Australia Travel Consumer Intelligence Report - Jan 2021

Source: News Corp Australia Travel Consumer Intelligence Report - Jan 2021

New Zealand. The interesting development to watch will be the level of cover that’s on offer as more international corridors open.

Businesses will need to provide a safety blanket to their customers - by integrating the relevant “customer care” functions into their business model and ensuring that it’s delivered to customers as issues arise will be a critical component to success. There is no doubt that margins for international sales will be impacted as a result. However, the reality is there may not be a customer to get margins from if the transparency, certainty, and seamless execution in delivering on customer care isn’t there.

Safer Travel in the FutureCompliance of the Traveller

We will live in a far “cleaner” travel world as it recovers and reopens, with most Australians becoming comfortable with following mandatory safety and health measures. From what we’ve witnessed throughout history, a period of unsettlement becomes the norm when it relates to security and safety measures in travel. If we observe travel post the 9/11 terrorist attacks in the US, we can identify that security became more strict than ever before at airports. The resultant long security delays are now second nature to flying.

Businesses need to ensure their customers remain informed and know what’s required of them before they travel to an international destination. This will help create a more comfortable and seamless experience, allowing customers to be open to travelling more in the new world.

It’s clear there shouldn’t be as much concern from travel businesses about backlash from customers if health and safety measures are encouraged or enforced. In fact, if it means Australians are able to travel, they will be even more inclined to follow the “rules”. To support this, our most recent travel consumer research found that Australians strongly agree to safety measures such as wearing a face mask on a flight (71% agree) and that it’s important people have their temperature checked regularly at hotel, airport and cruise checkpoints (82% agree)**. Travel businesses have already taken great measures to ensure their experiences are of the highest COVID-19 health and safety standards. Once Australians see these measures in action on a global scale as international travel opens up, we anticipate this will provide a good kick to confidence.

“BUSINESSES NEED TO ENSURE THEIR CUSTOMERS REMAIN

informed and know what’s required OF THEM

before they travel TO AN INTERNATIONAL DESTINATION.”

This page; luxury bed in the desert.Opposite; aerial view of luxury overwater villas in tropical lagoon of indian ocean.

I would be willing to self-isolate for 14 days at the beginning and

end of my holiday (self-funded)

I would be ok with wearing a face mask on a flight

It’s important for people to have their temperature checked

regularly at hotel / airport /cruise checkpoints

QR code check-ins should remain mandatory even after COVID-19

To what extent do you agree or disagree with the below statements?

Source: News Corp Australia Travel Consumer Intelligence Report - Jan 2021

The future of QR check-ins is an interesting topic of debate: when we asked Australians if they think QR check-ins should remain mandatory after COVID-19, half of respondents agreed, with one quarter disagreeing and one quarter undecided. With many Australians already conditioned to using QR check-ins domestically, it won’t be a rude shock to do the same when travelling internationally. There’s also the opportunity for a more seamless communication experience, in destination with the data from these check-ins, with of course necessary privacy and permission frameworks implemented. With international countries having varying levels of data regulation, increased complexity ensues.

On the topic of vaccines, we found that 83% of Australians said they would get the COVID-19 vaccine if it were a prerequisite to overseas travel, with only 3% saying they would not and the rest undecided**. Travel businesses can be comfortable that if they take a “no jab, no travel” stance, it won’t have a major effect on their bottom line.

The Isolation Conundrum

With the Australian National Dictionary Centre recognising the abbreviation for isolation – “iso” – as the word of the year in 2020, we wanted to go a little deeper and understand how Australians feel about it, especially in terms of how it impacts their travel.

In our recent research, we asked if consumers would be willing to self-isolate for 14 days at both the beginning and end of their holiday (self-funded). Seventy per cent of respondents said they would not, which is understandable considering the average international trip in 2019 was only three weeks *****.

Some businesses will see the small percentage of consumers who said they would isolate as an opportunity. Only 15% of respondents said they would, but it’s safe to say those people probably have the financial means and/or the job flexibility to do so. There is an interesting area to explore here around how travel businesses may equip themselves, with government approval of course, to support the isolation process, and in a way make it part of the customer’s holiday (undoubtedly the less glamorous part).

The reality is that for most people, enforced isolation is going to be a huge limiting factor in ensuring travel recovers at pace. It’s not something that is in the control of business but hopefully with close relationships between governments and the travel industry, a workable solution is on the horizon to support recovery.

In Summary

We’re not there yet, but we’re getting closer. Coming off the back of a very tough and distressing 2020, the world is still striving for some form of normalcy. In among all the uncertainty and isolation, we all want liberties again, including the freedom to travel overseas.

Australians want to travel overseas again. Businesses need to be cognisant of the fact that Australians are feeling more uncertain than ever when it comes to refunds and cancellation policies, and from this uncertainty spawns confusion around travel insurance, especially in the COVID-19 world. Travel businesses need to provide clarity and transparency with their policies. They need to listen to their customers and make sure they offer easy-to-understand, safe offers. While the world is still scary and uncertain, now is the time to remind consumers about the excitement and joy that comes with a foreign land.

Sources*Adobe Analytics Escape.com.au Website Report, Nov 2020 - Jan 2021. **News Corp Australia Travel Consumer Intelligence Report - Jan 2021. ***Roy Morgan Single Source (Australia), Apr 2001 – Mar 2019. ****News Corp Travel Horizons Research - Sep 2020. *****Australian Bureau of Statistics, Overseas Arrivals and Departures, Australia - Jun 2019

“WITH INTERNATIONAL

COUNTRIES HAVING VARYING LEVELS OF data regulation, INCREASED

complexity ensues.”

Oia Santorini Greece.

Above; Wonders of Nature. Moraine lake at sunrise,

Banff, Canada.