Interest in travel has waned as the United States experiences an increase in coronavirus cases, Trivago CEO Axel Hefer told CNBC on Monday.
“Demand has not been sustained,” Hefer said in “Squawk on the Street.” “With a significant deterioration in the health situation, there is a significant drop in travel activity.”
Hefer emphasized that the relationship between travel and health “goes both ways.”
“You can clearly see that when there is a significant improvement in the health situation, and also a clear communication from the government that it is safe to travel, that there is an increase in demand,” he said.
The coronavirus pandemic has had a broad economic impact, but the travel sector has been one of the most affected. Using data from the TSA checkpoint to illustrate, more than 2.2 million people went through security on March 1. But in mid-April, as the pandemic worsened, daily figures were usually less than 100,000.
But as government restrictions on businesses eased and orders to stay home were lifted, data from TSA checkpoints steadily increased. On Sunday, 754,545 people passed through security.
Trivago, a platform for finding and booking hotels, also saw that recovery. In April, people in the US looking for domestic locations fell to just 11% of pre-pandemic levels in January, according to a recent company report.
By mid-June, that number had reached 39% of January levels. It has dropped to less than 30% in July as new Covid-19 cases and related hospitalizations increase, particularly in the southern and western states.
“We believe it will be a bumpy ride in the coming months, ups and downs,” Hefer said of the travel demand.
The top domestic travel destinations on the Trivago website have generally held steady during the pandemic and include Florida, California and Texas, three states that have seen a worsening of their Covid-19 outbreak in recent weeks. Nevada is number 4, while South Carolina replaced New York state in fifth place, according to Trivago data.
“Since mid-June, willingness to travel and perceived safety of travel has decreased, first in affected states and very recently also overall,” Hefer said. “But still, Florida is still the number one destination.”
People traveling within their home state have gained popularity as a result of the coronavirus crisis, Hefer said. In the United States, as well as globally, Hefer said Trivago has seen “the return of the road trip.”
“People want to control their transportation and go to their location and return completely independently,” he said.
Hefer said Germany-based Trivago has begun running ads for its platform, but even more so in Europe, where the Covid-19 outbreak is “more stable and has generally returned more travel.” Travel, mainly road travel, has rebounded across the European continent and more recently in the UK, he said.
“In the United States we have also done some very few tests, but generally speaking, we feel comfortable advertising significantly for travel when we feel it is safe and very stable,” he said.
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