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Meet the ExpertsEuromonitor International
Caroline Bremner // 28 May, 2020
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MEET THE EXPERTS// ATTA
TODAY’S EXPERT
CAROLINE BREMNERHead of Travel Research// Euromonitor International
OVERVIEW
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COVID-19 scenarios
Impact on travel
Consumer shifts
Case studies
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Unprecedented crisis leading to baseline recession and worst case depression
IMPACT OF COVID-19 ON TRAVEL AND TOURISM
Global infection
rateMortality rate Pandemic
DurationStock prices decline by Prob. Global Real GDP
Growth in 2020
Baseline 1-10% 0.3-1.3% 1-3 quartersRebound by
10-30% in H2 2020
35-45% [-3.8, -2.6%]
C19 Pessimistic 1 5-25% 0.5-1.5% 2-4 quarters 10-30% 25-35% [-6.0%, -4.0%]
C19 Pessimistic 2 15-35% 1.0-3.0% 3-5 quarters 25-45% 15-25% [-8.0% , -6.0%]
C19 Pessimistic 3 20-50% 1.5-3.5% 3-7 quarters 30-70% 5-10% [-11.5%, -8.0%]
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World economy -3.2% growth in 2020 with rebound within 2 years
IMPACT OF COVID-19 ON TRAVEL AND TOURISM
-12-10
-8-6-4-202468
10
2019 2020 2021 2022
% G
row
th Y
oY
Global Real GDP % Growth 2019-2022Baseline C19 Pessimistic 1 C19 Pessimistic 2 C19 Pessimistic 3
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100% of all countries imposed travel bans/restrictions in 2020
IMPACT OF COVID-19 ON TRAVEL AND TOURISM
Legend<International travel ban/border closures/flights suspended<Select restrictions/health checks/quarantine<Not researched
Source: John Hopkins, IATA, EU, FCONote: As of April 2020
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World tourism to bottom out in April 2020, recovery within 3 years to pre-crisis levels
IMPACT OF COVID-19 ON TRAVEL AND TOURISM
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Baseline C9 Pessimistic1
C19Pessimistic 2
C19Pessimistic 3
Trip
s, m
illio
n
World Inbound Arrivals Baseline and COVID-19 Scenarios 2018-2022
2018 2019 2020 2021 2022
-80
-30
20
70
120
170
2019 2020 2021 2022 2022
% Y
-o-Y
gro
wth
World Inbound Arrivals % Y-o-Y Growth by COVID-19 Scenarios: 2019-2022
Baseline C19 Pessimistic 1
C19 Pessimistic 2 C19 Pessimistic 3
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Travel Forecast Model shows destination shake up post COVID-19
IMPACT OF COVID-19 ON TRAVEL AND TOURISM
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Business travel more susceptible to shocks than leisure, potential drop of 65%
IMPACT OF COVID-19 ON TRAVEL AND TOURISM
-70
-60
-50
-40
-30
-20
-10
0
10
Inbound Receipts Inbound Business Receipts Inbound Leisure Receipts
% G
row
th Y
oY
World Inbound Business vs Leisure Receipts in Previous Crises % Growth vs COVID-19 Forecast 2020
9/11 Great Recession 2008/2009 COVID-19 Baseline
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Biggest declines for airlines, hotels and intermediaries, smallest drop for activities, other transport
IMPACT OF COVID-19 ON TRAVEL AND TOURISM
-70.0
-60.0
-50.0
-40.0
-30.0
-20.0
-10.0
0.0
Car Rental(Destination)
Hotels Short-TermRentals
Attractionsand
Experiences
% g
row
th Y
0Y
Potential Decline in World Travel Category Sales - Destination 2020
% 2008/2009 % 2019/2020
-60
-50
-40
-30
-20
-10
0
Airlines OtherTransport
TravelIntermediaries
Cruise
% g
row
th Y
oY
Potential Decline in World Travel Categories – Source Market 2020
% 2008/2009 % 2019/2020
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Cruise and intermediaries sales may not return to pre-crisis until long term, if ever
IMPACT OF COVID-19 ON TRAVEL AND TOURISM
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Digitalisation is the way forward from a crisis, mid term recovery as not immune to pandemic effects
IMPACT OF COVID-19 ON TRAVEL AND TOURISM
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Importance of a digitally enhanced customer journey
IMPACT OF COVID-19 ON TRAVEL AND TOURISM
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%
Other (please specify):Diversifying payment options
Enhancing cybersecurityDeepening customer loyalty programmes
Building mobile presenceCo-creating new products and services with consumers
Shifting from physical to online platformsBecoming consumer centric
Creating a consistent brand experience across channelsProviding information and advice to customers about COVID-19
Enhancing customer serviceIntegrating new technologies
Improving the customer journey and user experience
% respondents
What do you see as the most important commerce-specific developments for your organization in the coming 12 months?
Source: Voice of Industry Survey – Travel and Tourism, April 2020
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Consumer shifts
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Increased online shopping expected to remain post-COVID
SHIFTS IN CONSUMER BEHAVIOUR
Source: Euromonitor International COVID-19 Voice of the Industry Survey, April 2020Q: How do you think consumers will change their shopping and spending behaviour as a result of the COVID-19 pandemic?N=2846
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Increase online shopping
Reduce overall spending
Buy more health and wellness-related products
Reduce in-store shopping
Buy more products to improve life at home
% of respondents
Anticipated Changes to Consumer Shopping and Spending Behaviour, April 2020
Short-term change only (Q1 and Q2 2020) Mid-term change, but will eventually return to pre-crisis norms
Permanent change No change
Not sure
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Social outings expected to bounce back
SHIFTS IN CONSUMER BEHAVIOUR
Source: Euromonitor International COVID-19 Voice of the Industry Survey, April 2020Q: How do you think consumers will change their social and community-related behaviours as a result of the COVID-19 pandemic?N=2917
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Work from home more
Avoid large events and gatherings
Reduce eating out and going to bars, cinema, theatre, etc
Spend more time in the home
Shift social activities to a virtual platform, rather than in-person
% of respondents
Anticipated Changes to Consumer Social and Community Behaviour, April 2020
Short-term change only (Q1 and Q2 2020) Mid-term change, but will eventually return to pre-crisis norms
Permanent change No change
Not sure
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Changes in travel behaviour as consumers stay closer to home
SHIFTS IN CONSUMER BEHAVIOUR
Source: Euromonitor International COVID-19 Voice of the Industry Survey, April 2020Q: How do you think consumers will change their travel-related behaviours as a result of the COVID-19 pandemic?N=2827
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
More holidays taken close-to-home (eg, domesticdestinations, within driving distance, etc.)
Reduce international travel
Increased use of non-enclosed transport to get around(scooters, bikes, walking, etc)
Reduce travel via airplanes
Increased use of personal cars (eg, rather than public transit)
Reduce use of public transit
% of respondents
Anticipated Changes to Consumer Travel Behaviour, April 2020
Short-term change only (Q1 and Q2 2020) Mid-term change, but will eventually return to pre-crisis norms
Permanent change No change
Not sure
+3.4%Growth in consumers that feels good buying eco and ethical products (2015-2020)
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+ 9.6%Growth in consumers worried about climate change (2015-2020)
+10.2%Growth in consumers that think they can make a difference with their choices and actions (2015-2020)
64% of global consumers are worried about climate change
Lifestyles Survey 2020 Thailand Philippines Malaysia China Singapore Hong Kong Taiwan United
Kingdom Belgium Netherlands
I am worried about climate change 73.4 74.3 70.9 65.5 62.9 59.1 59 63 54.5 48.8
Climate change will impact my life more in 5 years than now
55.2 52.6 52.8 49 57.5 56 46 45.8 44.1 38.3
I can make a difference with my choices/actions
60 67.7 62.1 52.7 51.1 36.7 31.8 44.1 39.7 46
I feel good buying eco/ethical products 37.4 39.1 29.8 32.6 21.5 22.8 25.9 16.4 15.3 15.7
Source:EuromonitorInternationalLifestylessurvey2020,conductedduringJanuary-February2020,n:41,231
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Closing the gap between experiences and sustainability
IMPACT OF COVID-19 ON TRAVEL AND TOURISM
0102030405060708090
Generation Z Millennials Generation X BabyBoomers
% o
f res
pond
ents
Consumer Values by Generation 2020
Have a positive impact on the environment
Value real world experiences
Value virtual experiences
Choose ecotourism
§ Looking at global consumers in 2020, the majority of 77% value real world experiences
§ Gen Z exhibited a stronger penetration of sustainable travel experiences
§ Gap is expected to narrow as desire to have a positive impact increases
Source: Euromonitor International – Consumer Survey 2020
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New and sustained focus on how brands treat customers/employees
SHIFTS IN CONSUMER BEHAVIOUR
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Increase in attention paid to how companies treat customers andemployees during times of crisis
Decrease in demand for second-hand products
Increase demand for plastic packaging
Decrease overall carbon emissions due to limited travel
% of respondents
Anticipated Changes to Consumer Sustainability Behaviour, April 2020
Short-term change only (Q1 and Q2 2020) Mid-term change, but will eventually return to pre-crisis norms
Permanent change No change
Not sureSource: Euromonitor International COVID-19 Voice of the Industry Survey, April 2020Q: How do you think consumers will change their sustainability- and environment-related behaviours as a result of the COVID-19 pandemic?N=2818
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Case studies
§ The Faroe Islands are an autonomous archipelago in the Atlantic Ocean, under the jurisdiction of Denmark
§ Closed their doors to visitors during the COVID-19 pandemic and introduced remote tourism
§ Visitors are able to remote control one of the locals, giving commands such as run or jump whilst exploring with a Go-Pro
§ In a world of zero travel, immersive virtual reality experiences are used to inspire and connect
Faroe Islands: immersing visitors during the global shutdown
Immersive travel experiences
Image source: Unsplash
§ Marriott reporting a drop in occupancy by 90% in April 2020
§ Launched Marriott on Wheels, a food delivery service, in India to provide food to locals
§ Donated rooms to healthcare workers and essential supplies like cleaning products and masks
§ Hospitality is a highly human experience –important to put people at the heart of it
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Brands with purpose
Image source: Unsplash
§ Svart, located in the Arctic Circle, aims to be the world’s first energy-positive hotel when it opens in 2022.
§ First Powerhouse hotel using 85% less energy than a standard hotel, created in partnership with Arctic Adventure
§ Produce more energy than will use over 60 years, giving back more than it takes
Climate positive
Image source: www.svart.no/
§ Red Sea Development Project covers 90 islands. Phase one due for completion in 2022 and finalisation in 2030, including 14 luxury hotels
§ Sustainability is at the heart of its destination management, using 100% renewable energy and zero plastic
§ Virtual concierge using AI, AR/VR, IoT sensors and biometrics to deliver personalised, guilt-free experiences
§ The use of personal carbon trackers to monitor and measure each visitor’s personal impact
Case study: Red Sea Development Company
Technology driven sustainability
Image source: Unsplash
§ Uber Air – next gen urban mobility with electric vertical takeoff and landing vehicles (eVTOL)
§ Point to point, city to suburbs, city to city
§ Sometimes only innovation is the way to tackle problems such as flying and taking cars off roads
Uber Air – innovation to tackle environmental impact head on
Guilt free urban mobility
Image source: Unsplash
If we don’t act now, there will be no travel in the decades and centuries to come
James Thornton, CEO, Intrepid
Image source: Unsplash
IMPACT OF COVID-19 ON TRAVEL AND TOURISM
Travel in the new normal: recovery first in domestic, to intra-regional, then international
COVID-19
Waves 1-4
Testing and contact tracing
Treatment
Vaccine
Travel
Zero travel
Phased lifting of bans
Local, VFR
Domestic
Intra-regional
International
Priorities
Health
Society wellbeing
Economy
Sustainability
Capacity building
New Normal
Fear factor
Social distancing
Health standards and testing
Airlines 50-75% load factor
Hotels 40-50% occupancy
Crisis 3 months
6-9 months
12-18 months
RecoveryResilience
Unsustainable business models
Mass tourism
MICE, corporate business
Baby boomers
Adventure, wellness tourism
Sustainable experiences
National parks, camping & eco-pods
Gen Z and Y
Digital
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Caroline Bremner
+44 20 7251 8024//
@CarolineBremner
www.linkedin.com/in/carolinebremner1
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