Over the course of the next several weeks, JP Marvel will publish the series “2025: Long Term Effects of COVID-19”, an exploratory imagining of life in 2025, after COVID-19. Each series entry will provide a hypothetical 2025 reflection on the pandemic’s impact since 2020, focusing on a key aspect of American industry, commerce, government, society, or culture.
As COVID-19 peaked, large populations sheltered in place. When the epidemic slowed and the economy reopened, many Americans questioned their trust in modes of transportation previously deemed safe. It had been nearly twenty years since the US had experienced the 9/11 disasters and later watched as air travel transformed dramatically. At first, many Americans refused to fly. Eventually, public worries abated, and air travel returned to previous traffic levels, but much of the convenience and casualness once associated with air travel had all but disappeared with the implementation of strict security protocols. COVID-19 had a major impact on the process of air travel too, but its impact has been far more widespread and costly. In 2020, it was difficult to imagine boarding a plane without first interacting with a Homeland Security officer, walking through a body scanner, separating your laptop from other carry-on luggage, and flashing the contents of your carefully packed toiletry Ziplock bag. Today, it is difficult to imagine boarding a plane without first verifying your vaccine records, passing through a temperature check station, securing your face mask, and sanitizing your hands. Unlike post-9/11 security concerns, the concerns that emerged after COVID-19 highlighted the inherent danger of interacting with any group of people and led to a more logistically complicated world.
The airline industry was one of the first industries significantly affected. At the virus’ onset, draconian controls were placed on all travel. As the virus passed, FAA regulations were loosened so that airlines could streamline their operations to align with major hubs and suspend service at smaller airports where traffic had slowed to unprofitable levels. Per plane occupancy shrank as airlines attempted to maintain maximum space between passengers. This reduced industry capacity, cutting the supply available to customers. The government instituted rigorous hygiene standards for both airliners and airports. Consequently, reduced demand and greater costs proved fatal to smaller airports and airlines saddled with debt, and the past five years has been a period marked by airline consolidation and airport closures. There are fewer airlines now than there has been in the last 30 years. Overseas, the main survivors are state-sponsored flagship airlines, and overall international travel has sunk to levels we saw prior to the great wave of privatization of the 1990s. There have been repeated attempts to revitalize the industry through spinoffs and privatization, but this has helped only marginally. Business travel has remained suppressed because video conferencing has become a favorite substitute: corporations have discovered it’s cheaper and safer than sending employees to in-person meetings, and clients have accepted it as an equivalent alternative. The practice of telecommuting has also increased by bounds, as many companies successfully improved their telecommuting capabilities during the epidemic and reaped financial advantages.
Public transport faced similar hurdles as the airlines, but it didn’t have the flexibility afforded private enterprises to adapt to market forces. The major cities have, in the aftermath, spent record amounts of money updating their public transit systems to address issues ignored for decades. New York City was particularly absent on its public transport duties prior to 2020 and has since introduced significant bond and tax programs to fund colossal infrastructure projects. Commuter rail systems that previously focused on cities have become more decentralized as workers and companies have moved out of hub communities.
Automobiles have made a strong rebound. Entering 2020, the industry was in a cyclical downturn, and the pandemic initially depressed auto usage further. But as the world opened, autos enjoyed a strong tailwind from a cyclical reversal and the release of pent-up demand created by people being unable to buy cars during the quarantine. Moreover, the woes of the airline industry proved to be a boon for the autos. Although harsh government regulations and geopolitical fears reduced demand for airline travel, American wanderlust remained resilient, and autos filled that need. After COVID-19, Americans turned to cars as their preferred mode of transportation for vacations. The resurgence of energy prices, however, caught the attention of elastic consumers, and the demand for fuel efficient vehicles, particularly those powered by fuel cell systems, skyrocketed.
Many people traveling long distances for pleasure or work need a place to stay, and hotels remain their best option. When COVID-19 hit, the hotel industry had to consolidate and restructure. Many localities previously considered hotspots became “coolspots”, particularly areas around airports that saw dramatic drops in visitorship. Smaller hotels and motels faced significant stress, and many of them closed permanently during the quarantine. When the other hotels reopened, they were held to much higher standards of cleanliness by regulators and guests alike. Major hotels began to screen the body temperatures of their guests too. This put some stress on the bottom line as hotel maintenance staff required more training, consequently becoming more skilled and expensive to employ. Hotels that did survive the quarantine have done well with less competition, and the highest quality hotels demand premium pricing because Americans still need and want to travel but now have much higher standards for cleanliness and safety. Upstart hotel-like apps have faced significant headwinds since the pandemic as they have largely been unable to guarantee the cleanliness of their users’ accommodations. Some of these companies are now in talks with the Alphabet nest division to add monitoring to certify rental cleanliness, but many renters and rentees are pushing back, concerned about both cost and privacy.
In our next report we will continue to discuss “going out in the world” after COVID-19, focusing specifically on how Americans’ taste for leisure and entertainment has changed and the impact that has had on various industries and companies.