Uneven outcomes for hotels, airlines and travel agencies
As summer draws to a close, we are unveiling the results of the Natixis Payments Observatory on Tourism1, which focuses on three types of players: travel agencies, airlines and hotels.
An analysis of transactions by the French highlights major differences between the players: not everyone has benefited from the much-awaited ‘catch-up’ in the same way. Currently, it is hotels that are making the most of the summer uptick, thanks to a higher average order value and more transactions compared to pre-COVID summers. Airlines and travel agencies, however, are lagging behind.
Average order value soars for hotels – and plummets for travel agencies
Because of the catch-up effect, the total amount of transactions in the hospitality sector soared in July and August to levels above those observed in the summer of 2020, and even in 2019 and 2018.
- +43 points compared to 2020
- +23 points compared to 2019
- +34 points compared to 2018 (aggregate of transactions made in July and August)
This is mainly because of an average order value higher that of previous years: +€35 compared to 2019, from €122 to €157. But the number of transactions has also increased, by 5.7%.
For travel agencies, however, the trend is quite different. The average order value is lower than before the pandemic: down by €92 in 2021 compared to 2019 (it was €458 in 2019, and only €366 in 2021). The number of transactions is also down by 32.1% over the first 8 months of the year.
Airlines are also not out of the woods yet. The average order value is down (to €215 from €227 in 2019), and the number of transactions remains low compared to pre-COVID years. Cumulatively over the first eight months of the year, the number of transactions is 40% lower than in 2019.
The young are driving the industry’s recovery
Airlines are seeing younger people account for more of their sales: compared to 2020, those under 24 have increased their spending by 32%. On the other hand, spending decreased by 14% for those in the 55-64 age group and by 21% for those over 65.
Airlines: changes in spending in the January-August period, from 2020 to 2021
It is a similar trend for hotels: those under 24 have increased their spending by 67% compared to 2020, while those over 65 increased it by 1% only.
Hotels: changes in spending in the January-August period, from 2020 to 2021
The trend is even more marked for travel agencies, where those under 35 are the only ones to have spent more than in 2020.
Travel agencies: changes in spending in the January-August period from 2020 to 2021
Players who have gone digital
What do all these players have in common? A strong digital transformation.
Airlines were already highly digitised before the pandemic (e-commerce accounted for 92% transactions in 2019), and this trend has increased further with 94% of transactions done online in 2021.
For the other players, who were highly dependent on their physical presence before the crisis, the jump to e-commerce is unprecedented:
- Hotels: 56% of all transactions have been done through e-commerce in 2021 vs. 42% in 2019
- Travel agencies: 87% of all transactions have been done through e-commerce in 2021 vs. 77% in 2019
1 Natixis Payments Observatory, industry analysis based on electronic payment transactions by Banque Populaire and Caisse d’Epargne cardholders (22 million cards).