As consumer confidence returns, so will spending, with “revenge shopping” sweeping through sectors as pent-up demand is unleashed.
The bounce back will therefore likely emphasize those businesses, particularly the ones that have a communal element, such as restaurants and entertainment venues.
The CEO of one major travel company told us that, beginning in the third quarter of 2020, business was “pretty much back to normal” when referring to growth. But it was a different normal: domestic travel was surging, but international travel was still depressed given pandemic-related border restrictions and concerns about health and safety.
Leisure travel bounces back but business travel lags
By definition, leisure travel is discretionary. Business travel is less so.
During and after the pandemic, though, there is a question about business travel: Exactly when is it necessary? The answer is almost certain to be not as much as before.
History shows that, after a recession, business travel takes longer than leisure travel to bounce back.
Peer pressure may also play a part: once one company gets back to face-to-face meetings, their competitors may not want to hold back.
a survey of business-travel managers found that they expect business-travel spending in 2021 will only be half that of 2019.
While business travel will return at scale, and global economic growth will generate new demand, executives in the field think that it may never recover to the 2019 level.
In short, leisure travel is driven by the very human desire to explore and to enjoy, and that has not changed.
Disruption creates space for entrepreneurs
Many executives reported that they moved 20 to 25 times faster than they thought possible on things like building supply-chain redundancies, improving data security, and increasing the use of advanced technologies in operations.
Fourth Industrial Revolution
it’s worth noting that US productivity in the third quarter of 2020 rose 4.6 percent, following a 10.6 percent increase in the second quarter, which is the largest six-month improvement since 1965
The COVID-19 crisis has created an imperative for companies to reconfigure their operations—and an opportunity to transform them. To the extent that they do so, greater productivity will follow.
The near-term challenge, then, is to move from reacting to the crisis to building and institutionalizing what has been done well so far.
For consumer industries, and particularly for retail, that could mean improving digital and omnichannel business models.
For healthcare, it’s about establishing virtual options as a norm.
For insurance, it’s about personalizing the customer experience.