Brandon Let's start here. Airlines help promote tourism and demand across the world. And so they influence not only travelers, but other lines of business across the industry from car rental companies, cruise lines and lodging. How do travel leaders keep updated on all of the changes and adapt their strategies, in your opinion?
[00:02:37] Darren Absolutely. So it's really critical that we have a good understanding of customer needs and what demand is out there and how it's changing over time. Focusing on understanding airlift is important because it's sustainable based on having robust demand. So, for example, if an airline adds new nonstop service to a destination, it makes that destination easier to reach and could create opportunities for hotels to focus their marketing efforts on these customers. And what this does is it creates a virtuous cycle of demand that preserves and grows the airlift to the market.
[00:03:12] Sally I wanted to play off that because I think it's really interesting for some of our listeners to understand what type of considerations you look at when contemplating adding either brand new routes or adding additional routes. What do you use to help make those decisions?
[00:03:32] Darren So we really start with a customer and wherever a customer demand is now. But everything we do is we would look at destinations that we can grow the pie with new service. So, for example, our new service to the Canary Islands that launched yesterday is an example of a market that's been very hard for Americans to reach historically, but with a nonstop service, we see potential to grow the pie. So it's really a combination of making things easier for customers.
[00:03:55] Sally Do you look at the total picture of going into a destination meeting, looking at traveler demand, like you say, that makes perfect sense, but looking at hotel ADR is compressing other factors about travel into that market. I mean, people travel for many reasons, but those going on leisure travel, looking at the total price of what that might cost for an individual, or you focused mostly just on what that air component is?
[00:04:21] Darren Yeah. So, I mean, it's the whole destination picture that drives demand. So some destinations are going to be more focused on VFR demand, which is really a function of potentially different ethnic populations and just the size of the market, whereas leisure destinations really need to have the right product and available product in the market to meet customer needs. So for example, somewhere like the Canary Islands, we were very comfortable going in because we knew the lodging product there was up to the standards that Americans are looking for leisure vacations and also provides so much unique, so many unique experiences that will make the trip worthwhile for Americans. And the key thing holding people back was the fact it was so hard to get to. So we really having appealing destinations and attractive lodging product is key to growing these leisure markets in our network.
[00:05:10] Brandon Sounds like we need an offsite in the Canary Islands, Sally. Makes sense, we can get there easily now.
[00:05:15] Sally Hundred percent.
[00:05:15] Brandon Quick question for you on, like, as you think about business versus leisure destinations, how does the network planning aspect of that change? Can you just dive a little deeper if it's a leisure destination and just thinking about things like local traffic versus flow traffic, based on a business leisure split, are you looking for more local traffic on one over the other or how do you approach that?
[00:05:38] Darren Yeah, absolutely. So the nice thing about being a network carrier is we have hubs that provide really strong connectivity. So our hub in Newark provides connectivity to too many destinations across the country that supplements for large local demand in the New York area. So when we add a new flight, say, to the Canary Islands or the Azores, we can combine demand from different origins and destinations. The nice thing about leisure markets is because leisure travelers are taking longer, more meaningful trips, they're more flexible to fly in a market that might be operated less than daily. So we can go into a market like Tenerife three times a week. And then over time we can grow it as the demand materializes. Whereas a business market like London, where up to seven daily New York-London flights this summer. And that's critically important for a business market like this to have a shuttle-like schedule so that people can arrange for travel around their business commitments and make a really short trip to get in and out if they need to.
[00:06:37] Brandon That's awesome. And actually, like makes so much sense in the way that you describe it. And I totally agree leisure trips are more meaningful than business trips. One other quick question I have for you, coming out of COVID, you know, I think during COVID, we saw the type of travel shift. There was more of a propensity to fly leisure destinations. So I saw like United started operating in Indianapolis to Hilton Head Island nonstop. Not something I ever thought I would see in my life. And I think it was super cool because you get to expose new people to new destinations. How has United and how have you taken what you've learned during COVID about the leisure traveler and applied that to the post-COVID world? Is there anything that you learned or took forward or any kind of tactics that you that United deployed during COVID specific to like, you know, these point-to-point flights that you'll continue or any other color that you'd like to give us there?
[00:07:32] Darren Yeah, absolutely. I mean, and COVID demand changed dramatically. And we had to be very nimble to shape our network around demand. And demand was driven not only by the mix of leisure and business travel, but also by travel restrictions that varied by country. So basically, the COVID recovery period has given us a lot of opportunities to experiment with new content in the network, and then it has shaped our network coming out of COVID to look different to what it looked like prior to COVID. So we went into COVID serving one destination in Africa seasonally, and now we serve four destinations in Africa on a year-round basis, as one example of how we've shaped the network over time.
[00:08:10] Sally Now, in the past few weeks, we've heard that exciting news that testing requirements to come back into the U.S. have been lifted, which is just fantastic news for so many travelers wanting to go abroad, internationally, as well as those travelers wanting to come into the U.S.. How do you see that impacting your business and air travel in general?
[00:08:31] Darren Yeah, so that's a point of friction. The testing to come into the U.S. was friction and risk in the travel experience, and having that lifted now makes it so much easier to leave the U.S.. So there's going to be a segment of pent-up demand that's now ready to travel. And we expect it will really help not only bringing down visitors into the U.S., but also make Americans more confident going overseas. We've seen in Europe as countries started reopening last summer, but as restrictions got lifted, demand immediately grew. So really excited about being able to make the travel experience easier for our customers.
[00:09:07] Sally That's great. I will say your app has great information in it about getting ready for your trip. So even during COVID, when I was traveling, I could go into the United App and feel pretty confident about what I would need. So that's helpful because I think we've had some other guests where just knowledge of what to do over the past two years has been so difficult. So the easier you can make it, the better.
[00:09:26] Darren Yeah, it's been incredibly confusing, but the travel ready center of it with built into the app allows you to get the specific requirements for your trip, upload your documentation for verification before you even get to the airport so you can skip lines and just make it easier for customers in this environment where rules have been changing day to day. And I think that's a good point that coming out of COVID, entry requirements like visas, etc., we're now going to be much better equipped to help customers understand what they need to travel.
[00:09:54] Sally That's fantastic. And as challenging as the last two years have been, to your point, being nimble, changing different things, learning quickly, are there any other positive changes that you implemented coming out of COVID that you're just excited about for the future of travel?