covid-19 webinar: the “great reset”? · estimated recovery weeks and decline to zero new cases...
TRANSCRIPT
1
Covid-19 Webinar:The “Great Reset”?
2Contents
2
Covid-19 & Travel Restrictions
3
4
Macro Travel and Shopping Forecasts
The “Great Reset” of Consumer Behaviour?
1
Latest Shopping Trends
33
Things are slowly improving…
44
Covid-19 & Travel Restrictions
55
COVID-19 Impact on the World’s Top Economies
Source: Global Data
GDP Growth(2020 Estimate)
United States 2,113,372 6,385 116,135 5.5% 4,984 72.14 1.2% -6.4%
China 83,221 58 4,634 5.6% 504 74.52 0.6% 0.8%
Japan 17,439 138 929 5.3% 2,171 36.9 -3.7% -5.0%
Germany 187,682 2,240 8,807 4.7% 1,378 53.57 -5.3% -6.4%
India 332,424 241 9,520 2.9% 273 76.19 -13.6% -1.3%
United Kingdom 298,315 4,394 41,821 14.0% 452 76.19 -15.0% -8.9%
France 194,305 2,977 29,439 15.2% 500 69.05 -12.7% -9.0%
Italy 237,290 3,925 34,371 14.5% 921 53.57 -15.6% -10.6%
Brazil 888,271 4,179 43,959 4.9% 236 76.9 -31.3% -6.1%
Canada 100,763 2,670 8,228 8.2% 144 70.95 -7.2% -6.1%
(YTD Change)
Stimulus ($ Bill ion)
Stringency IndexCountries Confirmed
Cases
Cases per
Million CapitaDeaths
Case Fatality
RateMarket Index
Note: Case Fatality Rate is the ratio of total death to total confirmed case. Market Index data is based on MSCI index of respective country. GDP growth estimates are based on consensus data from various analysts and firms. Stringency index, created by Oxford COVID-19 Government Response Tracker (OxCGRT), is the aggregated score based on several different common policy responses governments have taken, such as school and workplace closures and restrictions on travel and gatherings etc.
66
Most sectors have been negatively affectedEmployee layoffs play a significant role across sectors
Fears of a second wave in China have led to renewed uncertainty in recent days
Online penetration set to rise significantly as COVID-19 attracted new customers to digital shopping
The global slowdown in foodservice will result in a net loss of market value of US$1tn
Falling demand and geopolitical ambitions are greatly impacting this sector
Reduced footfall drives a shift online and shakes out weaker operators
The long-term prospects for payments look bright as consumers shift to electronic tools over cash
Travel & TourismImpact Level
ApparelImpact Level
RetailImpact Level
FoodserviceImpact Level
Oil & GasImpact Level
PaymentsImpact Level
Source: Global Data
77
Notable Travel Restrictions
Source: Global Data
NORTH AMERICA & CARRIBEANBahamas: Borders are closed.
Canada: Passengers are not allowed to enter Canada. Certain exceptions apply, most notably for some passengers arriving from the United States.
United States: Passengers who have transited or have been in Austria, Belgium, China (People's Rep.), Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Iran, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, Switzerland or in the United Kingdom (excluding overseas territories outside of Europe), in the past 14 days are not allowed to enter the USA. Certain exceptions apply.
SOUTH AMERICAArgentina: Passengers are not allowed to enter Argentina. Certainexceptions apply.
Brazil: Passengers are not allowed to enter Brazil. Certain exceptionsapply.
MENAEgypt: Flights to Egypt are suspended.
Morocco: Flights to Morocco are suspended.
South Africa: Flights to South Africa are suspended. Certain exceptions apply.
Saudi Arabia: Passengers are not allowed to enter Saudi Arabia..
UAE: Dubai will start to welcome foreign tourists from 7 July 2020
88
Notable Travel Restrictions
Source: Global Data
EUROPEBrussels have asked EU governments to reboot free travel from June 15 —but that doesn’t mean Schengen is fully revived.EU leaders continue ban on a number of countries, including the US
France: Passengers arriving from a non-Schengen Member State are not allowed to enter France. Certain exceptions apply.
Spain: Tourists will no longer need to quarantine for 14 days from July 1.
UK: A two-week quarantine period for anyone arriving in the UK has been in force since June 8. Arrivals have to provide an address where they will remain for 14 days. People not adhering to the rules risk fines.
ASIA-PACIFCAustralia: Passengers are not allowed to enter Australia. Certain exceptions apply.
China: Temporarily suspended entry by foreign nationals holding visas or residence permits still valid to the time of this announcement, effective from 00:00 local time, 28 March 2020. Entry by foreign nationals with APEC Business Travel Cards also suspended.
99
China 5-1 (Five-One) Policy
Source: Civil Aviation Administration of China
Dubbed the Five-One policy, the rule limits all Chinese airlines to one international flight per week to each country.
Foreign airlines can fly into China no more than once per week.
No flight should be filled to more than 75% of capacity
1010
Infection Peak and Decline Forecasts for Select Countries
Source: Global Data
Date MAR APR MAY JUN JUL
(Weeks) 30 6 13 20 27 4 11 18 25 1 8 15 22 29 6 13 20 27
US
Brazil
Russia
UK
India
Spain
Italy
Peru
France
Germany
Iran
Estimated Recovery Weeks and Decline to Zero New Cases for Top Infected Countries (Excluding China)
Note: Trends from China showed a steep drop after reaching peak. However, recent trends from US, UK, Italy, Spain, and other markets showed slower declines after peak than China, and in some markets, a long extended plateau without obvious peak or decline. Recovery forecast will now be trended along the new running average model taking into account the more drawn out recovery observed in recent weeks unless data suggests otherwise. Additional surges after initial peak are also likely due to countries opening up
1111
Latest Shopping Trends
1212
Tax Free Shopping Summary: YTD
Tax Free sales turnover
Vouchers / transactions
Avg. transaction Values
France -60% -60% 0%
United Kingdom -49% -52% +6%
Italy -67% -67% -1%
Spain -62% -62% -1%
Germany -56% -58% 6%
Top 5 destination markets
Tax Free sales turnover
Vouchers / transactions
Avg. transaction Values
China -66% -71% 17%
USA -63% -68% 16%
Russia -53% -53% 0%
South Korea -55% -52% -7%
Taiwan -62% -61% -2%
-58%Total sales
-59%Total vouchers
+1%Total ATV
1313
Tax Free Sales reached ‘Ground Zero’ around mid-March…
30%13% 14%
37%
-18%-34%
-18% -21%-40%
-61%
-93%wc 5 Jan wc 12 Jan wc 19 Jan wc 26 Jan wc 2 Feb wc 9 Feb wc 16 Feb wc 23 Feb wc 1 Mar wc 8 Mar wc 15 Mar
Europe Y-Y Sales (%)
69%
15% 22%62%
-48%-81% -74% -73% -70% -86% -97%
wc 5 Jan wc 12 Jan wc 19 Jan wc 26 Jan wc 2 Feb wc 9 Feb wc 16 Feb wc 23 Feb wc 1 Mar wc 8 Mar wc 15 Mar
Chinese Tourist Y-Y Sales (%)
50%18% 22% 20% 9% 10% 19% 3%
-18%-58%
-97%
wc 5 Jan wc 12 Jan wc 19 Jan wc 26 Jan wc 2 Feb wc 9 Feb wc 16 Feb wc 23 Feb wc 1 Mar wc 8 Mar wc 15 Mar
American Tourist Y-Y Sales (%)
Source: Planet
25th Jan 2020: CNY 2020
30th Jan 2020: WHO declares outbreak as Public Health
Emergency of Int’l Concern (PHEIC) 5th Feb 2020:
CNY 2019
8th Mar 2020: Italy lockdown announcement
11th Mar 2020: WHO declares virus as a pandemic
1414
…however, there are signals of a recovery
wc 29 Mar wc 05 Apr wc 12 Apr wc 19 Apr wc 26 Apr wc 03 May wc 10 May wc 17 May wc 24 May wc 31 May wc 07 Jun wc 14 Jun
Weekly Sales (€)
-98.6%
+272.8%
-33.3%
+280.1%
+20.9%
+200.7%
+36.7% +41.1% +34.0% +22.6% +29.8%+81.0%
wc 29 Mar wc 05 Apr wc 12 Apr wc 19 Apr wc 26 Apr wc 03 May wc 10 May wc 17 May wc 24 May wc 31 May wc 07 Jun wc 14 Jun
W-W Sales Growth (%)
-99.5% -99.5% -99.5% -99.4% -99.4% -99.2% -99.1% -98.9% -98.7% -98.7% -98.5%
-96.6%
wc 29 Mar wc 05 Apr wc 12 Apr wc 19 Apr wc 26 Apr wc 03 May wc 10 May wc 17 May wc 24 May wc 31 May wc 07 Jun wc 14 Jun
Y-Y Sales Growth (%)
Source: Planet
1515
Tax Free Shopping Sales: 14 to 20 Jun 2020
-91%
-94%
-87%
-97%
-97%
-95%
GB
FR
DE
IT
ES
Rest
Sales Y-Y (%)Top Destinations
-94%
-90%
-75%
-90%
-97%
-95%
Paris
London
Manchester
Frankfurt Am Main
Milan
Rest
Sales Y-Y (%)
Top Cities
-96%
-92%
-86%
-97%
-94%
Apparel - Luxury
Department Store
Watches & Jewellery
Apparel - Mainstream
Rest
Sales Y-Y (%)
Top Categories
-93%
-97%
Full Price
Outlet
Sales Y-Y (%)
Outlet vs Full Price
Source: Planet
15%
21%
29%
13%
9%
13%
10%
12%
20%
10%
13%
34%
€0-250
€250-750
€750-3k
€3-5k
€5-10k
GT €10k
Sales Mix (%) wc 16 Jun2019
wc 20 Jun2020
Tax Free Shopping Sales Mix by Band
1616
Payments data highlights rebound in domestic consumption14 to 20 Jun 2020
64%
-49%
-61%
-90%
-16%
-79%
Grocery Stores, Supermarkets
Clothing Stores
Department Stores
Hotel & Lodging
Electronic Sales
Rest
Sales Y-Y (%)
Top Categories
-40%
-63%
-84%
Domestic
EU
Non-EU
Sales Y-Y (%)Domestic vs EU vs Non-EU
Source: Planet
1717
Footfall and Scheduled seat capacity are gradually returning….
Source: Routesonline, ShopperTrak
-56.7%
-29.9%
-44.9%
-44.8%
-38.1%
-100.0%
-90.0%
-80.0%
-70.0%
-60.0%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
wc 29Mar
wc 05Apr
wc 12Apr
wc 19Apr
wc 26Apr
wc 03May
wc 10May
wc 17May
wc 24May
wc 31May
wc 07Jun
wc 14Jun
Store Footfall – Traffic Index - Aggregated by Week
UK FR
IT ES
DE
0
5
10
15
20
25
30
35
40
45
50
Dep
artu
re S
eats
(Mill
ions
)
Scheduled Weekly Capacity By Region
Africa APAC
Europe LATAM
Middle East North America
1818
Macro Travel and Shopping Forecasts
1919
The consensus is a global recession…
-2.6%
-6.4%
0.8%
-5.0%
-6.4%
-1.3%
-8.9%
-9.0%
-10.6%
-6.1%
-6.1%
-4.7%
-13.0%
-5.1%
-7.1%
-8.4%
-4.5%
-13.6%
-11.3%
-18.0%
-11.6%
-11.5%
2.6%
-3.4%
3.3%
-1.8%
-5.0%
0.8%
-4.5%
-5.1%
-7.0%
-1.8%
1.7%
-18% -16% -14% -12% -10% -8% -6% -4% -2% 0% 2% 4%
Real GDP Growth (%) Rate Projections
Low Estimate Mean Estimate High Estimate
India
UK
France
Italy
Brazil
Canada
Worldwide
Germany
Japan
China
US
Source: Global Data
2020
With so many differing views pertaining to international travel, it is hard to predict the future of international travel.
From the early days of the pandemic, below were a range of 12-18month predictions from various bodies…
International tourists arrivals forecasts in 2020
Source: IATA, UNWTO, Bain & Co
20-30%Reduction Forecast
44%Reduction Forecast
15-35%Reduction Forecast
(-100%)
(-80%)
(-60%)
(-40%)
(-20%)
0%
20%
% c
hange Y
ear-
on-y
ear
At this stage, predicting travel volumes over the net 12-18 months is near impossible…
2016 2017 2018 2019 2020 2021
Impact of Recession
Q4 50% recovery international
markets, reduced by recession
Q3 recovery domestic
markets, reduced by recession
impact
Q2 Q3 Q4
Demand RPK Y-Y -82% -56% -33%
Global RPK Growth
2121
A “Nike Swoosh” Recovery
Source: UNWTO , IATA, Heathrow
UNWTO scenarios projection for International Travel(Y/Y monthly change, %)
Global airline traffic expectations (% decrease vs. 2019)
+2%
(9%)
(57%)
(100%)
(80%)
(60%)
(40%)
(20%)
+0%Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec-20
Actual Data Scenario 2 Scenario 3 Scenario 1
(78)%
(70)%
(58)%
• Scenario 1 ; (58)% vs. FY19: based on the gradual opening of international borders and easing of travel restrictions in early July 2020
• Scenario 2 ; (70)%: based on the gradual opening of international borders and easing of travel restrictions in early September 2020
• Scenario 3 ; (78)%: based on the gradual opening of international borders and easing of travel restrictions only in early December 2020
Q2’20 Q3’20 Q4’20 FY20
IATA -85% -60% -33% -48%
UNWTO #1 (1) -85% -65% -35% -58%
UNWTO #2 (1) -85% -85% -65% -70%
UNWTO #3 (1) -85% -85% -80% -78%
40
60
80
100
120
140
2016 2017 2018 2019 2020 2021 2022 2023 2024
International RPK’s will lag domestic air travel marketsInternational air travel may not recover to 2019 levels until 2023-24
Global domestic and international RPK’s, indexed 2019=100
Domestic RPK’s
International RPK’s
0
1
2
3
4
5
6
7
(-100%)
(-80%)
(-60%)
(-40%)
(-20%)
0%
20%
Ja
n-2
0
Feb
-20
Mar-
20
Apr-
20
May-2
0
Ju
n-2
0
Ju
l-20
Aug
-20
Sep
-20
Oct-
20
No
v-2
0
De
c-2
0
Ja
n-2
1
Feb
-21
Mar-
21
Apr-
21
May-2
1
Ju
n-2
1
Ju
l-21
Aug
-21
Sep
-21
Oct-
21
No
v-2
1
De
c-2
1
Passengers
(m
)
% c
hange v
s 2
019
Heathrow expects a staged recovery in traffic over the course of H2 2020 and 2021
2222Source: https://www.ft.com/content/149c4be8-9fd9-46ff-a161-86f3ef86a2d6
China will drive the rebound in luxury but it will be domestically
By nationality By region
By channel By generation
2019 estimates
2025 forecasts
2019 estimates
2025 forecasts
2019 estimates
2025 forecasts
2019 estimates
2025 forecasts
Bricks & mortar
Chinese
Americans
EuropeansJapanese
Other
Online
Europe
Americans
Other Asia
China
OtherJapan
Gen Z
Gen Y
Gen X
Baby Boomers
Silent Gen
Bain & Co - Estimated Luxury Sales - % of Total
2323
PESTEL Analysis: International Tourist Sales Impact
Source: Planet
2424
PESTEL Analysis: International Tourist Sales Impact
Source: Planet
2525
Chinese policies to boost domestic consumption
2626
The “Great Reset” of Consumer Behaviour?
2727
As incomes have decreased, many are not planning on increasing spend
Source: McKinsey & Co
Many with Higher number of Covid-19 cases
2828
However, consumers report that they miss travelling more than anything else: US, UK, IT & FR
Source: https://www.bcg.com/publications/2020/covid-consumer-sentiment-survey-snapshot-5-18-20.aspx
Leisure travel
Restaurant diningOut-of-home entertainment
Out-of-home entertainmentRestaurant dining
Business travelCosmeticsAccessories,
fashion
Women’s clothing
Accessories, fashion
Public transportation
Gambling(ranks lower in other developed markets)
Most missed categoriesTravel and tourism related
01
02
03
04
05
Rank
60%-69%
18%-36%
“can’t wait to start travelling again”
“can see themselves going on a vacation
this summer”
Gen Z and Millennials (18-40) Gen X (41-55)
Baby boomers+(56+)
Highest quartile
Lowest quartile
Age Household income per capita
>
2929
Eight potential consumer shifts and attitudes as a result of COVID-19
01ConsciousSpendingConsumer will likely become conscious and planned spenders as the future of the economy becomes uncertain
05SafeEnvironmentsSafety of interaction inspace will potentiallybecome an expectationfor some consumers
02Engaging E-CommerceE-commerceConsumers will likelyexpect an even moreinclusive, convenient andengaging E-commerceexperience
06WellbeingConsumers will likelyprioritise their physicaland mental wellbeingas remote working,social distancing anduncertainty prevails
03SustainabilityConsumers are likelyto become moresustainable in theirbehaviours andexpectations
07Closer ProximityConsumer are likely to travel domestically andshop in local and shortdistance stores
04Trust andPositive ImpactConsumers will be likelyto trust and support asmall set of brands thatdeliver positive impactand encourage consumerinvolvement
08SmallConsumer are likely toprefer smaller shoppingspaces, avoiding largecrowded space suchas malls
Source: McKinsey & Co, Planet
Prolonged time at home
Reduced Income Restricted movement Increased Anxiety
Global change in experience…
…a Global “reset” in behaviour?
3030
3C Acquisition
payments amplified
• 3C Payment operate the world’s leading hospitality payment gateway
• Wide range of strategic partnerships with world leading Property Management System and POS providers, supporting retail, hospitality, F&B & transport partners
• Ability to offer its customers revenue generating products such as acquiring, currency conversion and VAT refund processing as part of the customer payment journey
• Together, we will process almost 800 million transactions (€45bn) for businesses serving nearly 600,000 merchants worldwide
3131
Q & A
3232