The State of Summer Travel | Ep 73

Speaker A: M. Foreign.

Speaker B: Welcome to the JD Power Travel and Hospitality Podcast. I'm Sarah Baggett with the marketing department. Joined today as always with our subject matter experts Andrea Stokes, Azari Jones and Michael Taylor. Thank you for being on the show. All right everyone, we have some excellent summer stories to get into. Maybe not excellent for the consumer, but excellent for us to talk about. Um, Andrea, I'm going to start with you. We are in the height of summer travel season, but it seems like maybe a slightly conservative outlook for uh, hoteliers right now. Tell us a little bit about what's going on in the hotel space this summer.

Speaker C: Yes, thanks Sarah. Glad to be here. So we do have some uh, concerns I think being expressed, uh, especially by the large hotel chains about the more immediate term, um, especially around uh, business travel. I think in the this economic environment a lot of companies are just m more cautious. So they're sort of pulling back a little bit on transient business travel. Um, or maybe business travel is happening, but very last minute. Right. Not necessarily like forward bookings like I think the hotel industry is used to, uh, with regard to business travel, uh, in terms of leisure travel, I mean obviously there's the concern about international visitors to the US Hotels in the northern, northern states, uh, who usually get. Canadian visitors are struggling I think, and definitely seeing occupancy. But the updated forecast, I mean the forecast was revised around 20, 20, 25 in terms of occupancy revenue revpar, which is revenue per available room for owners and operators. Um, you know, also just daily, average daily rates, I think hotel rates. I think the good news there is that uh, we're not seeing huge jumps in hotel rates going into the summer. Uh, I think, you know, last summer was a little bit flat over the summer before. I think this summer is going to be the same. Uh, so that's good for the consumer in terms of finding really good um, hotel rates and not necessarily seeing a lot of increases or big jumps up and down, um, in hotel rates around the country. Obviously tourism focused areas might areas that have a pretty big summer season, like beach resorts and that kind of thing, um, probably still could push rate a little bit given you know, that the demand I think for leisure travel this summer is still there, but definitely seeing that caution, uh, a little bit of caution on the business travel side. And you know, for consumers. You know, we, uh, we did recently, uh, J.D. power did a survey, uh, of consumers asking about uh, how inflation might be, uh, affecting their purchases, not only travel but other discretionary purchases. And there was a percentage of people that were, uh, either postponing or canceling leisure travel, uh, because of inflation or at least concerns about inflation. So that's still there. That, uh, concern is still there, I think. But, uh, yeah, so we'll see. Summer season just kicking off right now. We just had Memorial weekend, so I think as the weeks go on, we'll see what plays out.

Speaker B: It'll be interesting to see how this shapes up, uh, for the summer season for sure. But it is nice to hear as a consumer that maybe, uh, you won't have as high of a room rate as you might see in a typical high summer season. So not all bad news.

Speaker C: And I think, again, very dependent on parts of the different parts of the country, uh, where, you know, that, um, you know, where you might, you know, consumers may find some really good deals based on, uh, the. The state or the city that they might be traveling to. So, yeah, so I, I think, you know, see again, hotel CEOs and, and the industry, uh, are just taking it, I think, day by day at this point. Uh, very, you know, little bit of caution again, about forecasting too far out, uh, into the year. Uh, I think there is some, you know, hope that things, uh, economically might stabilize, you know, in the fall or, you know, well past the summer season. So, again, yes, we'll see what plays out.

Speaker B: No need to panic about the fall and winter just yet, in other words. Well, Andrea, thank you so much for sharing that with us. That's very interesting information. Azari, I'd like to talk to you a little bit, ah, about rental car and the state of rental car in the summer. I'd imagine this is a high season for people to be renting cars and going out on the road. But there's some pitfalls for that as well, I think. So tell us a little bit about that.

Speaker A: Yeah, so we, uh, there. We want to help people avoid the horrors of traveling in the summer and having issues with a rental car. I'm, um, going to give some tips and I'm just going to go into it with that. Some companies have experienced, um, a couple of, you know, lawsuits here and there because, you know, people have bald tires, accidents, AC is not working, a lot of things that we don't want to happen in the summer. Um, if you. I'm a Texan, and that's one thing you do not want to malfunction is not having a car with ac. So you just want to know when you're getting a rental car for the summer. These are cars that are used by other people. Sometimes they Sit long. You just want to make sure that you're considering what you would consider for your car when you're getting on the road. So something as simple as checking the thread on the tire, you know, using a quarter, uh, making sure that the thread you. I think if you turn it upside down and if the wash his head is still visible or something, then that means the thread's not deep enough or something like that. But you want to make sure that you're using either an app or some kind of tool. Check your tire thread. Right? You don't want to travel on the road, even on a rental car with, with bald tires. It's just not safe. You can run to rain, heat, um, unable to break. So want to make sure we check those things. Um, tire condition in general. Just want to make sure that you have enough air in the tire, especially in the heat. We know tire pressure fluctuates, so you just want to make sure that you're checking that tire pressure. They have apps for that now. So if you're like me and you're a millennial and you have no idea how to use that little stick thingy, and I'm going to call it a stick thing, uh, to check the gauge of the tires, uh, there's an app for that. So you just want to make sure you do do your, uh, due diligence. Um, another thing is to the walk around, I know sometimes we get a little comfortable, like, oh, you know, it's okay, but you don't want to skip that.

Speaker B: Even in the heat.

Speaker A: I know it's kind of hot and you just want to get on the road, get the air going. But make sure you're. You're doing the, the walk around, you're checking the fluid and all those things, um, just to make sure you're good. Right. Especially if you're going to, um, on a long road trip. Um, again, here in Texas, while we have major cities, there are some cities where gas stations are few and far in between. You don't want to get stuck on the side of the road where you don't have anywhere to stop or any local places to kind of check on that. So definitely want to do that. Brake lights, signals, all those things. Because sometimes things happen. People overlook those. Of course, you want to make sure you don't want to wait until you need to fuel, uh, up. So that's a big one, too. People have been stuck on the road and wondering, you know, I was going to fill up here, but no, you want to fill up as soon as that thing starts going down to a quarter, just go ahead and put gas in it that way. Again, if you're going to, like Jackson Hole, Wyoming, or somewhere up in the mountains, you're not stuck trying to find a gas station. Because as demand spikes, sometimes, you know, gas, uh, stations run out of gas. We don't want to, don't want that to happen to someone in a rental. So those are just little, a little few things. Um, the typical overheating. Want to get a hazardous kit, all those things just to make sure that you have a good rental car experience. Right. Um, the companies are going to do their due diligence, but sometimes you just want to make sure you're extra careful and that you have everything you need. And that way you're enjoying your summer vacation. You don't have a horror story saying, hey, it was great, but this happened. Um, so just take that extra few minutes, check the fluid levels, um, all those great things. And also, don't leave electronics and medication in the car in the heat. You don't want that to be an issue either. I know we get comfortable and forget, but it's hot out there. You just want to make sure that you're taking care of yourself during the summer.

Speaker B: So it really sounds like preemptive, you know, checking around the car, making sure to check all the little side things can save you a ton of time. Those preemptive actions can save you a ton of time down the road when you're not worried about a flat and a headache.

Speaker A: I've been fortunate to. Every time I get a rental car, it's a wonderful experience, but sometimes things just happen because that's the case. So, yeah, just take that extra few minutes and walk around and be that. Be that person who just is a stickler for everything, looking for every scratch. Ding. Everything. And that way, you know, you'll feel safe on the road. Like, okay, let's start our family vacation. Let's not stop and get stuck somewhere. Let's have a good time.

Speaker B: Nothing ruins a vacation quicker than, uh, being stuck on the side of the road. That's for sure.

Speaker A: Yes. In the heat. In the heat. Yes.

Speaker B: In the heat. Thank you for that, Azari. That's very helpful information to keep in mind. Absolutely. As we hit the roads this summer, uh, Michael, I'm going to turn to you with air travel. I feel like air travel is in the news every other day right now, if not every day, every hour. Um, specifically, air traffic control issues have been a hot button topic. So just wanted to pick your brain a little bit about that. Tell us what's going on, why this is happening now.

Speaker D: Sure. I tell people we could have this conversation 30 years ago. Uh, the FAA is probably the most sclerotic, uh, slow moving bureaucracy in the history of bureaucracies. And that is saying something. Um, it's a very, the air traffic control or atc, uh, is a very, very complicated, um, oh, I guess process, if you want to call it that, uh, or environment, um, and to change it all in one go, fell swoop, uh, is a difficult thing to accomplish. And that makes the adoption, uh, of technology extraordinarily slow, uh, for the faa because the FAA wants to do one thing, keep planes from colliding with each other. Of course, we all want that, but they do a really good job of that. And uh, the best way that they know how to do that is to be extraordinarily conservative. So, uh, you know, we're still using technology that was invented for World War II. Uh, you know, we're still using ground based radar to track planes for the most part. Uh, we're not taking advantage of GPS signals or you know, the myriad satellites, uh, we have in the air that can, you know, put the aircraft within a half a meter of wherever it might be, even when it's traveling at 400 miles an hour. We just don't do that just yet because again, it takes a lot to take the whole process up and down, uh, to make it work. And so really the technology that the FAA works with, uh, is very, very old. Um, they still have some things that are written in, I believe, Cobol I think, which is a, uh, computer language that my sister learned when we were in high school. And that was a long time ago. And um, but the way they, they kind of make the whole thing safe and uh, they do make it safe because this doesn't happen very often, uh, is that they just have a lot of redundancy, so they expect things to break down. But they have other two or three other backup systems. And that's why you have these little glitches, these little two second outages that you've heard about, like for example last week in Newark. And it's not only just Newark, there are other airports. That happens to New York just makes the headlines because it's in a major m, uh media market. Uh, but they do have these little drops because that's the backup system kicking in. Uh, but what they really do need to get is they need to get into the 21st century, which is what they really need to do. And it takes an extraordinary amount of political will to make that happen. More political will than there's ever been accumulated in any of the administrations prior to this one, and including probably this one. So don't expect this thing to change overnight. Um, but really, technology needs to catch up. And you think about it, it's all the different radar installations that you have tracking installations around the United States and Canada and Puerto Rico. Uh, and then you'd have to also have the same systems in all the aircraft all at the same time. And that's what makes it a difficult proposition. But the main message here is that it is safe to fly. These things actually do work. They do have redundancies built into them. So it's a cascading failure is a really, really unusual thing. That's why the stuff at Newark made headlines. Uh, and the system does work because we've had an extraordinary safety record. But the bottom line is it could be much, much better and much more modern.

Speaker B: Sounds like a lot of steps that would need to happen all at once. Like you said, a lot of infrastructure investment. But, um, it's good news to hear that it is safe to fly. I know that's something a lot of our listeners have probably been wondering about over the last few weeks and months.

Speaker D: I'm getting on an aircraft this week and next week. I'm not going to have any qualms about it whatsoever.

Speaker B: Very good. Um, is there anything we should be looking for this summer as far as weather related delays or any tips or tricks with that?

Speaker D: No, uh, again, that's, you know, it's the same thing situation for every year. Um, I say that there, you know, the big swing factors in whether you get delayed or have, uh, rolling cancellations is what is the weather like over Chicago and Atlanta? Because those are the two markets that have the biggest impact on, you know, the whole system. Uh, because that's where the big transfer hubs are, obviously. O' Hare and Atlanta, Hartsfield. Uh, other than that, you're just kind of going to be sitting around for an hour or two while, uh, weather rolls in. But no, I don't think there's. It's the same every year. You have to expect that there's going to be some bad weather and it's just got to roll with the punches and it doesn't do any good. I tell people, doesn't do any good to yell at the person behind the counter. They're not in trouble. They're not in charge of whether the aircraft takes off or not. That's the FAA and the airline itself. So, uh, yelling at them won't help. Just roll with it. And if you get there, you know, 12 hours later than you thought you would, it's fine. Just relax and enjoy it.

Speaker B: That's right. I always say if the airlines could control the weather, we'd never have weather delays.

Speaker D: Exactly right.

Speaker B: Well, thank you all. Andrea Azari, Michael, it's been great talking to you. We're wishing you all a safe and happy travel season this summer and looking forward to revisiting this in a couple of months and seeing what the state of summer travel was at of 2025. Thank you so much for joining us. This has been the JD Power Travel and Hospitality podcast, and we'll see you next.