Industry Update
External Article 2 December 2020

The Travel Industry Is Up Against a Psychological Make-or-Break

Predictions on recovery from a consultant who has an eye on it all.

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As the head of travel and tourism for Boston Consulting Group, Jason Guggenheim is used to troubleshooting on behalf of airlines and hotel companies when the road gets bumpy. Typically that means rethinking operations and carrying out restructuring efforts for sprawling resorts, cruise lines, online travel agencies, or big names in air travel. But even for someone whose job it is to fix the industry's most complicated problems, there's never been a year as turbulent as 2020.

Clearer skies may be ahead in 2021, but that's relative. Boston Consulting Group predicts that travel won't rebound to 2019 levels until 2023 or 2024. So Guggenheim is likely to be just as busy next year—and the following, and the following.

That's because the tourism business is driven by the great intangible of consumer confidence. Regardless of therapeutics or vaccine availability, second or third waves, or the efficacy of safety protocols, the industry won't fully recover until travelers and service providers do so psychologically. Even then, the industry varies greatly, ranging from the already booming roadside hotel sector to unable-to-operate cruise lines.

Here's what to expect in the medium to long term, from an expert who has an eye on it all.

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