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European travel continues to outperform other regions as growing COVID-19 cases impact consumer behaviours in the US and Australia

15th July 2020: Continued steady growth, driven by European markets, supported 9% week-on-week growth in bookings last week. This growth has been aided by continued easing of governmental restrictions across Europe. Cancellation rates are beginning to normalise across all channels, as customers’ hesitation around travelling appears to be abating.     ​

Throughout the pandemic, CarTrawler has been closely monitoring search trends for both flight and car rental volumes across key residencies. These search volumes are an insightful early indicator of demand and a lead indicator of future bookings. We can see that car rental recovery appears to be improving at a faster rate than flights. In Europe, the average year-on-year growth in car rental search terms has increased by +58ppts versus their nadir in early April (-73% at nadir vs. -16% last week) compared to +30ppts for flights. This trend is also mirrored in North America with a +47% trajectory improvement in car rental search terms and just +16% for flights.  ​

The split between domestic and international travel for total business has shifted back to a 50/50 mix, however, the regional split has remained relatively stable. Europeans are still favouring international travel, making up 67% of bookings in the last 30 days – this is just 10 percentage points off the same period in 2019. Both North America & Australasia remain domestic only for the most part, representing 91% and 98% share respectively. ​

Average rental days within the business are continuing to rise with a +16% increase evidenced over the last 30 days versus the same period in 2019. This trend is driven again by growth in Europe where consumer confidence levels appear to be steadily increasing with average rental days +23% from the same period last year. ​This trend is expected to continue as leisure travel recovers at a faster pace than business (typically shorter duration) travel. 

As the International Travel Controls continue to be relaxed in Europe, we can see increased booking volumes. Gross bookings this week increased again by +13% week on week. This growth was primarily driven by the UK, with a +20% increase in gross bookings this week compared to last week. Spain & Portugal are the most recent markets to move from border controls to lighter restrictions. We are also seeing some markets where Governments are increasing measures moving from ‘No Measures’ to ‘Screening and Quarantine’ measures, namely Italy & UK.  ​

An increase in COVID-19 cases across the US has resulted in slowdown in booking volumes in the market, as case numbers have begun to rise sharply in some of the Southern states previously less impacted (e.g. Florida, Arizona, Texas and California). We have observed a decline in both demand and booking volumes, across our partner base including airlines and online travel brands. We can see booking growth slowed for the 3rd week with a -14% decline in bookings versus last week. Canada also declined for the first time this week by –7%.  ​

In Australia, gross reservations trajectory is +10pp versus last week, however; as Australia, particularly Melbourne, have seen case numbers rise sharply following the enactment of the government’s three-stage easing plan in late May the State of Victoria have now moved back to Level 1 “stay at home” restrictions. We will continue to monitor the effect this may have on demand. 

Author: Laura Ryan