Will Post-COVID-19 Travel Cost You More? Here Is What You Should Know

Travel has been on everyone’s to-do list for months. Though the COVID-19 pandemic isn’t over, increased vaccination and awareness among people are helping many countries to open for tourism after months of travel bans. Domestic tourism is also gradually returning to normal in even densely populated countries such as India. Thus, it can be said that post-COVID-19 travels are gradually rising as more and more people are stepping out of their homes for a much-needed vacation or work. By Manas Sen Gupta

However, things have changed significantly since the pandemic began. For one, the confidence to travel, though improving, is not too high. US market research firm Destination Analysts, which has been surveying 1,200 Americans weekly to note their travel sentiments, revealed in the November 1 week update that the “near-term outlook for travel is positive.”

According to the firm, Americans are inching towards normalcy following the Delta variant surge but are looking at changing their lifestyles to focus more on family, work and themselves. The study found an overall improvement in travel-related matters, including welcoming of tourists and the ability of travel businesses to provide adequate services.

The survey also found 53 per cent of the respondents have a travel plan for the next three months. However, around 60 per cent pointed at high travel prices, with 42.7 per cent saying they didn’t travel in the past month because of it. The cost is, therefore, a major factor here.

Cost of travelling post-pandemic

The question in our minds is, will travelling in the post-pandemic world be expensive? Yes.

A rise in tourism will lead to a rise in costs as businesses get back on their feet. In some cases, it is likely to be even more than what it was in 2019 — the year before COVID-19 was declared a pandemic. The exact figure, however, will vary from country to country.

The pandemic was a major blow to tourism and its components, including travel and accommodation services, the two most important expenditures incurred by a traveller. Moreover, costs of COVID-19 tests and travel insurance add to a tourist’s expenses.

Meanwhile, the steady rise in oil prices has a significant impact on the cost of travel. Everything, from flight costs to accommodation prices and other related expenses can directly or indirectly affect oil price rise.

Oil and airfares

Airlines require jet fuel, the demand for which fell during 2020 and much of 2021 as people could not travel and airlines undertook limited operations. However, demand is gradually rising with more and more travelling to various destinations by air.

But the problem is that oil prices have risen sharply due to a foreseen supply issue against the rising demand. On October 18, Brent crude oil futures were at a three-year high of over USD 85 (INR 6,335) a barrel. The US West Texas Intermediate (WTI) crude futures hit a seven-year high of USD 83.73 (INR 6,240) before settling at USD 83.51 (INR 6,224) a barrel.

A rise in oil prices means that airlines will have to pay more for fuel, which would result in flight prices becoming dearer. Meanwhile, the passing of rising costs has already been discussed in the USA.

“Higher jet fuel prices lead to higher ticket prices. Ultimately, we’ll pass that through,” CEO of United, Scott Kirby, told CNBC in October. Quoting S&P Global Platts data, CNBC reported that the price of jet fuel in the USA was up more than 115 per cent from 2020 to USD 2.3282 (INR 174) a gallon.

Thousands of kilometres away, the situation in India is somewhat similar. According to a September report by Mint, data from Indian Oil Corporation Limited (IOCL) revealed the price of jet fuel rose from around INR 42,000 per kilolitre in 2020 to INR 68,609.22 per kilolitre in New Delhi.

Prices are also affected by occupancy and policy decisions. During the pandemic, airlines operated with several restrictions, and with improving conditions, these restrictions (such as keeping the middle row empty) are being eased.

Starting October 18, the country’s Civil Aviation Ministry lifted all restrictions levied on airlines, allowing them to operate at 100 per cent occupancy on domestic routes.

However, domestic air travel had already become expensive in August when the government raised lower and upper caps on fares by 9.83 per cent to 12.82 per cent. In September, the government brought down the days of limit for the caps to 15 days from 30 days. This means that airlines can set their prices for bookings after the 15th day.

Prices will also depend on the season as tickets during holiday seasons tend to be costlier. However, airlines are not the only mode of domestic travel in some countries. Compared to airlines, train travel in India is a cheaper option and is, thus, the preferred mode of travel by millions every year.

Having said that, railway fares, too, have been affected by the pandemic’s economic fallout.

Earlier, concessions were a key component of fares in 53 categories for people in India, including senior citizens (males 60 years and above; females 58 years and above), students, medical personnel and sportspersons.

Some of the concessions, including those for senior citizens, were withdrawn temporarily to discourage people from travelling during the pandemic. Those concessions are yet to be reintroduced.

Accommodation prices

Prices of hotels usually rise phenomenally during holiday seasons and other key annual events. A recent example was seen in Scotland’s Glasgow, where attendees of the 26th UN Conference of Parties on Climate Change (COP26) had a harrowing time getting hotel rooms. The high demand led to an astonishing price rise with some charging GBP 1,400 (INR 1,39,740) for a room that is normally priced at GBP 42 (INR 4,192) only.

City A.M. reported in October that data shared by travel agent Buttler indicates that global hotel prices are now 184 per cent more than it was in 2020. According to the data, most major cities witnessed a rise in the prices of hotel rooms because of exceptionally high demand. New York City recorded the highest price rise of 28 per cent (to approx USD 300 or INR 22,364) against a rise in demand by 361 per cent. Madrid and London recorded a 24 per cent price  and 23 per cent price rise against a demand surge of 409 per cent and 220 per cent, respectively.

In countries such as Singapore, where despite a rise in demand by 90 per cent, the price of hotel rooms has gone up by just one per cent.

“America, the UK, Spain, and Portugal have all told the world they’re open for business while Australia, South Africa, and Singapore have either taken a more cautious approach to reopening or have reinstated certain travel bans having previously relinquished them,” City A.M. quoted Timothy Davis, co-founder and CEO of Butter, as saying.

Insurance and COVID-19 tests

Not all travel insurance companies include COVID-19 in their cover, but many offer both medical as well as cancellation coverage against the disease. This is important in cases of flight and accommodation cancellations because of a sudden rise in cases, or if a traveller has contracted the virus in a foreign country and needs to meet hefty medical expenses. And as with insurance, an additional cover means the insured will have to shell out more.

Some countries, including Singapore and Thailand, have made it mandatory for foreign travellers to be covered under travel insurance that comprises COVID-19 treatment. Singapore, for instance, warrants that short-term visitors have a COVID-19 inclusive medical insurance cover of a minimum of SGD 30,000 (INR 16,48,807). In Thailand, the minimum coverage has to be USD 50,000 (INR 37,27,375).

However, more and more people are opting for high-priced travel insurance that includes a COVID-19 cover, as was found by American insurance company Seven Corners in 2020. According to Reuters, 80 per cent of the total medical travel plan sales by Seven Corners was of a new plan that provided a COVID-19 cover.

Depending on where one is travelling to, COVID-19 tests might be required both before departing for and upon arrival at the destination. Test prices vary wildly between countries, so these have to be factored in at the time of making travel plans.

According to a research by UK-based airline and airport reviewer, Skytrax, as of April 15, 2021, an airport PCR test was the cheapest at the Mumbai airport at USD 8 (INR 596), while it was the costliest at Japan’s Kansai international airport at USD 404 (INR 30,112). Similar was the case with the rapid antigen test; the price in Mumbai was again the cheapest at USD 2 (INR 149), while it was the highest in Helsinki at USD 214 (INR 15,950).

(All information regarding country regulations on vaccine requirements and tests are available on this page of the International Air Transport Association.)

Should you travel?

While travelling in a post-pandemic world has its pros and cons, tourism, in particular, is economically and socially important to millions.

Tourism is a major employment generator in many countries, especially those that are not developed economically. The tourism industry was severely hit by the pandemic, thereby upending lives dependent on this sector.

The lifting of travel bans comes as a ray of hope for small businesses and local communities to recover from the blow of lockdowns triggered by the pandemic.

This year’s World Tourism Day 2021 also highlighted the need to help people affected by the pandemic through tourism. The message was to ensure that the “Leave No One Behind” declaration in the Second Principle of the 2030 Agenda for Sustainable Development and the Sustainable Development Goals (SDGs) is adhered to.

So, high costs or not, travel is essential in the post-pandemic world.

(Main and Featured images: Isabel Lee/@sayhitobel/Unsplash)

Related: Virtual Tourism Is The Most Popular Type Of Tourism In 2021