Trivago CEO says travel demand has fallen as virus cases rise, sees ‘bumpy ride’ ahead

Axel Hefer, CEO of Trivago

  • Travel demand “has not held up” as the U.S. experiences a surge in coronavirus cases, said Axel Hefer, CEO of Trivago, a platform to search for and book hotels.
  • “With a significant deterioration of the health situation, you see a significant drop in travel activity,” Hefer said Monday on CNBC’s “Squawk on the Street.”
  • “We think that it will be bumpy ride for the months to come,” Hefer added.

Interest in traveling has fallen as the U.S. experiences a surge in coronavirus cases, Trivago CEO Axel Hefer told CNBC on Monday.

“The demand has not held up,” Hefer said on “Squawk on the Street.” “With a significant deterioration of the health situation, you see a significant drop in travel activity.”

Hefer stressed 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 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 wide-ranging economic impacts, but the travel sector has been one of the hardest hit. Using TSA checkpoint data to illustrate, more than 2.2 million people went through security on March 1. But by mid-April, as the pandemic worsened, the daily numbers were routinely under 100,000.

But as government restrictions on businesses eased and stay-at-home orders were lifted, TSA checkpoint data steadily climbed back up. On Sunday, 754,545 people went through security.

Trivago, a platform to search for and book hotels, saw that recovery, too. In April, people in the U.S. searching for domestic locations fell to just 11% of pre-pandemic January levels, according to a recent data release from the company.

By mid-June, that number had reached 39% of January levels. It’s fallen back to below 30% in July as new Covid-19 cases and related hospitalizations increase, particularly in Southern and Western states.

“We think that it will be a bumpy ride for the months to come, in an up and down,” Hefer said of travel demand.

The top domestic travel destinations on Trivago’s website have generally remained steady throughout the pandemic and include Florida, California and Texas — three states that have seen in recent weeks a worsening of their Covid-19 outbreak. Nevada is No. 4, while South Carolina replaced New York state in the fifth spot, according to Trivago’s data.

“Since mid of June, the willingness to travel and the perceived safety of travel has come down, first in the affected states and very recently also very broadly,” Hefer said. “But still, Florida is still No. 1 destination.”

People traveling within their home state has gained popularity as a result of the coronavirus crisis, Hefer said. In the U.S., 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 come back fully independently,” he said.

Hefer said Trivago, which is based in Germany, has started to run advertisements for its platform, but more so in Europe where the Covid-19 outbreak is “more stable and overall there is more travel that has returned.” Travel, predominantly road trips, has picked up across the European continent and more recently in the United Kingdom, he said.

“In the U.S. we’ve also run some very few tests, but broadly speaking, we feel only comfortable to advertise significantly for traveling when we feel that it is safe and very stable,” he said.

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