While a majority of travelers are staying home, many continue to accumulate frequent flier miles through spending on their airline-branded credit cards.
That’s inspiring hope at Delta Air Lines and its credit card partner American Express that there’s pent-up demand for travel.
“That’s actually a really, really encouraging sign,” said Delta chief financial officer Paul Jacobson during an investor presentation this week. He sees it as an indication that travelers are building up miles because there’s a trip to Europe or other vacation coming.
“If I thought the pandemic was going to last three years and I wasn’t really going to be able to fly anywhere, I would probably shift my spend away from accruing miles and put it on somewhere else,” Jacobson reasoned. But he thinks many continue to store up miles because they “believe that this is going to pass.”
American Express CEO Stephen Squeri said, while reporting the company’s financial results in late July, that “once consumers feel safe again, you will have this unbelievable pent-up demand for people to want to get out and travel.”
American Express cards co-branded with Delta, Hilton and British Airways are performing better than others, he said.
“A lot of people, their psychology is they save points for the big trip," Squeri said. Others focus on earning elite status with an airline or hotel through spending, which he believes “is going to be even more important as we move forward.”
Dreaming about trips is something the travel industry also hopes to see more of, even if many people aren’t going anywhere now.
The U.S. Travel Association and a coalition of travel industry businesses launched a campaign this week called “Let’s Go There,” with the idea of encouraging people to plan or think about taking a trip when they’re ready.
“The act of simply planning a trip can have a positive impact on our outlook,” said Disney Parks executive Jill Estorino, who is part of the coalition. Visit California president Caroline Beteta said having a trip to look forward to “is a much needed reminder that better days are ahead.”
Bookings for domestic flights and hotels were still down 64% as of the end of August, according to a traveler trends tracker from travel data provider ADARA.
While optimism can play a role, travel restrictions and continued virus outbreaks are still keeping many from venturing out on big trips.
Jacobson expects the recovery to be choppy, adding “we’re still well, well behind where we should be.”