The coronavirus brought the entire travel and mobility industry to a halt. Regional lockdowns and travel restrictions affect mobility on all levels, which leaves us wondering: do all forms of mobility suffer the same? Instead of focusing on one organisation, this time our focus goes to an entire industry. Are there sectors performing better during the pandemic and if so, what does that mean for the future of mobility?
A Comment by Kolin Schunck and Nicole Stein
The coronavirus pandemic has slammed aviation, the wider travel and the mobility tech industry, unlike anything we have ever seen before. With people being locked into their homes for many weeks, mobility activity dropped to an unforseen low. A slow recovery mode has set in during the summer. Some mobility and travel sectors returned quicker than others, as the Travel and Mobility Category Heatmap for Germany by TNMT (measured using active app usage) shows.
But now in autumn the travel and mobility sector was hit again with Covid-19 infections rising and lockdowns urgently implemented by governments to minimize overall mobility behavior again. But the sectors are impacted differently. In the following, we provide a glimpse into the most and least impacted verticals, clustered by short-haul, and long-haul travel and mobility.
Short-haul travel and mobility options on the “bright” side
The bicycle, for instance, has proven to be crisis-resilient with active app usage returning to almost pre-Covid-19 levels. Especially during warmer weeks in September, we saw a spike in the usage of shared bicycle apps, which are way above pre-Covid-19 levels. We expect the bike to be the new form of mobility going forward for many people even during fall and winter season, because people might try to avoid crowded modes of transportation, such as subways or buses for a long time, maybe even post-Corona.
A similar trend can be witnessed for car-sharing apps, showing a similar level of active app usage compared with pre-Covid levels. Again, this most likely goes back to the fact that people try to (must) avoid crowded places if possible. The car in general experiences a new boost during the pandemic, which could also become problematic from a sustainability perspective in the long-term.
Public transportation (e.g. subways and buses), taxi services (e.g. FreeNow), and ride-hailing (e.g. MOIA, Uber) are hit hard by the pandemic and consumers’ change in behavior. Public transportation companies all struggle due to the widely implemented “Home Office” policy by firms (e.g. Google sent all of its employees into remote work until further notice), with the consequence that a lot of people do not need to commute to work anymore. This will have a long-lasting impact on the overall mobility behavior of people. In general, short-haul travel and mobility providers are hit hard, but not as severe as long-haul travel and mobility. One can therefore be rather optimistic that short-haul mobility will recover sooner.
The long-haul travel and mobility options solidify on low levels
Long-haul travel, especially air travel, has suffered immensely due to the pandemic. When looking at the year-over-year active app usage of airlines, the data shows us that usage dropped by almost 90 percent compared to the previous year. The data also shows us a very slow recovery at the end of April. This development is in line with the relaxation of lockdown and containment measures.
The customers’ engagement level with airlines, after reaching an initial first peak in July, has dropped again and seems to follow a declining path again. A lockdown in November would most likely lead to further reduction of airline app engagement, and hence travelers’ sentiment to travel by air. We, therefore, have no good news to share: unfortunately, the short-term outlook for air travel demand is anything but positive.
Similar declining trends can be seen for the other verticals, such as long-distance trains (e.g. ICE) and buses (e.g. Flixbus), cruise ships (e.g. AIDA), tours and activities (e.g. GetYourGuide), shared apartments (e.g. Airbnb) and hotels (e.g. Marriott), and OTAs (Online-Travel-Agency, e.g. Expedia).
Looking at the travel and mobility heatmap, we must conclude that the recovery in travel, especially long-haul travel and mobility, will take a very long time. We actually expect a long-stretched U-shaped recovery in this segment with wave-like ups and downs along the way. And overall travel sentiment is currently on a downward trajectory again, unfortunately for the whole travel and mobility industry.
Need for governmental action and a new definition of mobility
In our globalised economy, mobility has long served as a cornerstone and subtle indicator of a well-evolved society. The pandemic has shown that while taken for granted for the most part, the mobility sector is in fact pivotal for the majority of industries. In this context the coronavirus can serve as a trigger for more sustainable mobility going forward: thanks to digital tools and a new-found flexibility in remote work arrangements, more activities can be conducted from home, making travel redundant, and thus, allowing for less travel-related pollution. Further environment-friendly options like cycling (sharing) proves itself as a viable alternative in short-haul transportation.
However, the increased usage of cars and their attractive appeal compared to crowded public transportation can result in a revival of a car craze, hence the contrary extreme: relapsing into the behavioral preferences prior to all sustainability efforts of recent years. The EU is advised to act upon these tendencies and strengthen its efforts in regard to sustainability – even more so during the pandemic. Basing new regulations and government support packages on the action plan on urban mobility, the EU can find a balance between supporting struggling players in the industry, yet paving the way for a new and sustainable definition of mobility.
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Kolin is an experienced research and intelligence analyst in travel and mobility tech. He is with the Lufthansa Innovation Hub in Berlin, the unit responsible for the new digital business of the Lufthansa Group. Kolin has a passion for the future of mobility topics or as he terms it „The New Transport Economy“. He creates deep data-driven research on the technological forces shaking up aviation, such as air taxis, electric aircraft, drones, sustainable aviation fuel, and supersonic jets.
Nicole is an entrepreneur and researcher at Wuppertal-Institute for Climate, Environment and Energy and research associate at IE Applied – Tel Aviv University. Her work focuses on the interplay of sustainability and digitisation, especially on new business models and AI-supported activities. She is part of the Digital Transformation & Cybersecurity programme at Polis180.