Tax Free World Association (TFWA) has offered a glimpse into travel and consumption trends that will shape our industry in the post coronavirus (Covid-19) world, courtesy of a thought-provoking webinar.

Entitled, ‘What Next? Life, Travel and Retail after Covid-19’, the webinar took place last Thursday (7 May), before the cancellation of the TFWA World Exhibition in Cannes (27 September to 2 October).

Among the 485 webinar registrants was a mixture of brands, retailers, airports, distributors and travel service providers.

Hosted by John Rimmer, Managing Director, TFWA, the three panellists were Olivier Jager, Co-Founder and CEO, ForwardKeys, Irina Koulikova, Manager, Bain & Co and Anson Bailey, Head of Consumer and Retail ASPAC, KPMG.

Bailey was also a panellist for the inaugural TRBusiness Travel Retail Connect Covid-19 webinar, which aired on 5 May.

INAUGURAL TFWA COVID-19 WEBINAR

The 75-minute TFWA webinar was the first in a series of online meetings, which will look ahead to the re-opening of borders and airports and the resumption of travel.

In his opening address Rimmer said: “There are many ways in which the world will be different once the crisis subsides and some of that we can only guess at for now. In some areas, the crisis is accelerating trends that were already underway. Other changes will be completely unexpected. Our major challenge as an industry is to be ready as best, we can.”

The first panelist to speak was ForwardKeys’ Jager who delved into the company’s database on reservations made by tour operators and airlines worldwide.

“A lot of psychology is required to understand the mechanics that will work together to unleash what is a paralysed market at this point in time,” he remarked.

Outlining how year-to-date international tourism arrivals to Asian regions (1 January to 3 May 2020) have been impacted by the pandemic, Jager revealed that arrivals to South East Asia dropped -55% compared to the same period last year. “This figure was largely down to a positive January, but as we know the current situation is nightmarish and global.”

International tourism arrivals in North East Asia suffered more than any other part of Asia, dropping -74% year-on-year (see below).

“North East Asia is more impacted than the rest of the gang,” Jager explained. “This is because the pandemic essentially started in China, which rigorously addressed the situation with the closure of borders and air traffic fairly early in the game.”

Looking ahead to June, July and August, the number of bookings made to Asia Pacific destinations dropped -75% compared to the same period last year.

While this represents a significant decrease, the figure shows that several people still made reservations despite the uncertainty. “We can say that not many have cancelled yet because they are waiting for some positive developments, or we can be optimistic as there is still plenty of time until the end of August and for some destinations to open up a little.”

Despite offering a glimmer of positivity, Jager does not believe a recovery is imminent. “I don’t see a recovery this summer. A lot of things need to happen first.”

In order for ‘corridors to reopen’ two parties must agree to do business together. “The world is closed for business at this point. It’s as simple as that. In order to allow international travel to resume, a clear vision is needed to determine what is necessary to travel to a destination.”

MORE GLOBAL COORDINATION REQUIRED

Citing the recent launch of Covid-19 testing at Vienna Airport, he added: “In Vienna, it is clear what travellers need to do in order to enter Austria. We are desperately looking for more coordination globally, hopefully spearheaded by IATA and other organisations.”

Next to speak was KPMG’s Bailey, who immediately offered participants a glimmer of hope.

“There is not a lot of great news for everybody at this moment, but we did see promising numbers during the recent Golden Week holiday in China (1 May to 5 May). The other interesting thing I am seeing is that airports and airlines realise they sort of really have to drive a lot of this new technology and innovation.”

At the start of each year, Bailey and other KPMG representatives attend the National Retail Federation Conference in New York. This year’s event highlighted several key pre-Covid-19 key trends (people-centric, customer experience, cooperation and collaboration, trust and technological intensity) which do not appear to have changed as the situation has escalated.

“Clients and corporates realise there is a big focus on being more people-centric, rolling out those customer experiences, more responsive supply chains, the use of data and trust. We are already seeing new emerging business models, based on cooperation and collaboration and technological intensity.”

Regarding the re-emergence of Chinese consumers, albeit in a new normal, Bailey said: “China, like everywhere else has taken a bit hit with GDP in Q1 down -6.8% (Source: National Bureau of Statistics of China) compared to the same period last year. Wholesale and retail in the country during the first quarter also dropped -17.8%.”

As the recovery in China continues,  Bailey is expecting a lot more activity around the return of Chinese consumers.

“There is already a big focus on social retailing. Live streaming has gone crazy and we are definitely going to see more focus on contactless.”

On the topic of digital in general, Bailey acknowledged consumers are digitally minded and “a lot more tech savvy than ever before.”

He also suggested that the use of digital will be significant once the crisis has passed. “There are a lot of cool technologies which have not been commercialised. We are going to see technology accelerating and unleashed in a number of different ways over the next three to five years. This is definitely something we all need to prepare for.”

Stay close to TRBusiness for highlights from Irina Koulikova, Manager, Bain & Co’s presentation and the main takeaways from a compelling question and answer session.