COVID 19: Florida’s case spike casts shadows over summer travel
Just as US airlines were seeing an uptick in demand for the high season of travel that is now in full swing, COVID-19 cases are increasing in many of the country’s most popular vacation destinations, including Florida, which is the leader in posting the largest number of new cases during the past seven days (as of 13-Jul-2020).
Despite the surge in Florida’s case counts, popular vacation destinations, including Disney World, are set to reopen in Jul-2020, hoping to draw travellers that wish to resume some sense of normality after 'stay at home' orders are being lifted.
But with Florida’s new status as a COVID-19 hotspot, demand to the state’s large tourist and beach destinations could weaken as individuals question the safety of travelling to areas where cases are rapidly rising, which could result in airlines making adjustments to their schedules. Leisure airlines are dominant at some of Florida’s largest airports, and may find themselves injecting even lower fares into the market to entice customers to travel to an area where cases are trending in the wrong direction.
- The US’ COVID-19 numbers continue to climb, with the US state of Florida, which is typically a popular high season vacation destination, emerging as one of the major hotspots for the virus.
- Florida’s growing number of COVID-19 cases are occurring just as major theme parks in Orlando opened on 11-Jul-2020
- Airlines that are the dominant operators at some of Florida’s largest airports may find themselves being forced to lower fares even more, as travellers will experience trepidation in booking travel to Florida.
Florida's COVID-19 cases rise sharply as major tourist attractions reopen
The United States is facing an alarming rise in COVID-19 cases as states reopen after shutting down for varying amounts of time to combat the spread of the virus.
Data from the US Centers for Disease Control and Prevention (CDC) show that 62,918 new cases were reported to the organisation on 11-Jul-2020 – the highest since cases were first reported to CDC beginning in mid Mar-2020.
As of 12-Jul-2020, the US state of Florida had a total of 270,000 cases, which was the third largest behind California and New York City. However, Florida had 15,300 new cases on 12-Jul-2020, according to Johns Hopkins University.
Florida’s government has not issued a mandatory mask order, but some municipalities in the state have required the wearing of masks.
As Disney World and other large amusement parks and resorts reopen in the Orlando area, masks will be required for individuals age two or older, and employees at those facilities must also wear masks. There are also social distancing protocols and an overall policy of reducing the number of visitors.
Beaches, amusement parks and airlines are betting that pent-up demand will drive tourists to Florida, but the alarming rise in COVID-19 cases in the state is no doubt making travellers pause, and it will be interesting to see if flight cancellations in some of the state’s largest markets will increase.
United Airlines has already issued a warning that its net bookings (new bookings minus cancellations) excluding its Newark hub fell by 73% year-on-year on 1-Jul-2020, and bookings from Newark fell by 84%. The booking data is a seven-day moving average of bookings within 30 days from departure.
See related report: COVID-19: deteriorating US conditions cloud airline recovery
Leisure airlines are dominant at some of Florida's larger airports
Operators with a larger base of leisure passengers – Southwest and Spirit – are the biggest airlines operating from Orlando International airport, based on domestic seat deployment. Those operators are also the largest operators at Fort Lauderdale, which is Spirit’s headquarters.
Domestic seat share at selected Florida airports, as of mid Jul-2020
Airline domestic seat share
|Palm Beach International||
Spirit has maintained a generally positive, but tempered, outlook. In May-2020 the airline remarked that it was anticipating that shortened booking curves would elongate as individuals gained more confidence in “being able [to] go on their July 4th holidays and picnics and seeing their friends and family that they haven’t seen for what is now for months”.
See related report: COVID 19: Spirit Airlines sees light on the horizon
The growing COVID-19 caseload in Florida will pressure airline ticket prices
With the growing number of cases in Florida and other COVID-19 hotspots, airlines may find themselves lowering already massively cheap fares in order to entice individuals to travel.
Before the latest alarming increase in US COVID-19 cases, Southwest CEO Gary Kelly told Reuters he expected a brutal low-fare environment when traffic returns after coronavirus-induced restrictions ease.
Unfortunately, in many states where restrictions have been eased, COVID-19 cases have grown, including Florida, and some populated areas in the state are being forced to scale back reopening. Miami-Dade County has banned indoor dining, and Broward County, home to Fort Lauderdale, could institute similar measures.
All of those factors are coalescing to create a degree of trepidation for leisure travellers considering a trip to Florida in the near term, and airline bookings, which have generally been occurring much closer to travel for the past few weeks, will no doubt experience some pressure as customers weigh the risks of travelling to an area where cases are growing and at the moment, are showing no signs of slowing.
Little near term visibility remains the norm for US airlines as COVID-19 spreads
The spike of COVID-19 cases in Florida is part of a major expansion of the virus across the Southern and Western regions of the US that is creating headwinds for airlines as they attempt to manage in a new reality, one that was thrust upon them nearly four months ago.
That reality is not changing for the foreseeable future, which means US airlines may have little near term visibility as they attempt to match supply with demand.