Meet the Experts Euromonitor International › sites › m › mimir.no › files › › impactofcovid19_euro… · Unprecedented crisis leading to baseline recession and worst case

Meet the ExpertsEuromonitor International

Caroline Bremner // 28 May, 2020

MEET THE EXPERTS// ATTA

TODAY’S EXPERT

CAROLINE BREMNERHead of Travel Research// Euromonitor International

OVERVIEW

COVID-19 scenarios

Impact on travel

Consumer shifts

Case studies

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%]

World economy -3.2% growth in 2020 with rebound within 2 years

-12-10

-8-6-4-202468

2019 2020 2021 2022

Global Real GDP % Growth 2019-2022Baseline C19 Pessimistic 1 C19 Pessimistic 2 C19 Pessimistic 3

100% of all countries imposed travel bans/restrictions in 2020

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

World tourism to bottom out in April 2020, recovery within 3 years to pre-crisis levels

Baseline C9 Pessimistic1

C19Pessimistic 2

C19Pessimistic 3

World Inbound Arrivals Baseline and COVID-19 Scenarios 2018-2022

2018 2019 2020 2021 2022

2019 2020 2021 2022 2022

World Inbound Arrivals % Y-o-Y Growth by COVID-19 Scenarios: 2019-2022

Baseline C19 Pessimistic 1

C19 Pessimistic 2 C19 Pessimistic 3

Travel Forecast Model shows destination shake up post COVID-19

Business travel more susceptible to shocks than leisure, potential drop of 65%

Inbound Receipts Inbound Business Receipts Inbound Leisure Receipts

World Inbound Business vs Leisure Receipts in Previous Crises % Growth vs COVID-19 Forecast 2020

9/11 Great Recession 2008/2009 COVID-19 Baseline

Biggest declines for airlines, hotels and intermediaries, smallest drop for activities, other transport

Car Rental(Destination)

Hotels Short-TermRentals

Attractionsand

Experiences

Potential Decline in World Travel Category Sales - Destination 2020

% 2008/2009 % 2019/2020

Airlines OtherTransport

TravelIntermediaries

Cruise

Potential Decline in World Travel Categories – Source Market 2020

% 2008/2009 % 2019/2020

Cruise and intermediaries sales may not return to pre-crisis until long term, if ever

Digitalisation is the way forward from a crisis, mid term recovery as not immune to pandemic effects

Importance of a digitally enhanced customer journey

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

Consumer shifts

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

Social outings expected to bounce back

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

Not sure

Changes in travel behaviour as consumers stay closer to home

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

Not sure

+3.4%Growth in consumers that feels good buying eco and ethical products (2015-2020)

+ 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

Closing the gap between experiences and sustainability

0102030405060708090

Generation Z Millennials Generation X BabyBoomers

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

New and sustained focus on how brands treat customers/employees

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

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

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

Brands with purpose

§ 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

§ 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

If we don’t act now, there will be no travel in the decades and centuries to come

James Thornton, CEO, Intrepid

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

QUESTIONS?

GET IN TOUCH

Caroline Bremner

+44 20 7251 8024//

caroline.bremner@euromonitor.com

@CarolineBremner

www.linkedin.com/in/carolinebremner1

THANK YOU

Meet the Experts Euromonitor International › sites › m › mimir.no › files › › impactofcovid19_euro… · Unprecedented crisis leading to baseline recession and worst case

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