Causality and Yellow Suitcases

Hello again, hope you’re enjoying the summer. The school holidays are upon us, which for me means the exciting life of a digital nomad. The more mundane reality of that means shuttling between grandparents for help with childcare but it’s still a situation that would have been challenging pre-pandemic and the opportunities to work from anywhere.

It does mean fewer arguments with my wife about who goes to the office and escapes the madness but the long hot days can still cause conflict. At those points my son often reverts to the universal principle of ‘yeah but you started it’. If you hadn’t put me in time-out I wouldn’t have thrown everything on the floor kind of thing. It’s possibly a little early in life to discuss causality with a seven year old but I can’t help pointing out that cause and effect don’t always flow in the direction you want them to.

That is as true in advertising as in the argument over who caused the Jenga tower to collapse. It’s the Rosser Reeves Fallacy. Rosser Reeves was an adman in the 1950s who hypothesised that people who are aware of your advertising are more likely to buy your product thus proving that ads drive sales. The problem with that hypothesis however is that it is correlation not causation. People who buy a particular brand are more likely to notice advertising for that brand. You’ll have noticed this yourself when you think about buying a new car and suddenly see ads for it everywhere. Mental receptiveness to a brand means you’re more likely to recognise and remember its messages.

Does the Reeves Fallacy provide any insight into the cause and effect of the surge in travel demand even in the face flight cancellations, airport delays, lost luggage and stretched hotel service? It is generally assumed that liberation from lockdowns and restrictions is the cause of the devil may care spending and revenge travel boom. But perhaps the cause of revenge travel started with the need to feel we can make our own choices again. The news stories of airport chaos tells us that everyone is travelling to exotic destinations again so we must go too.

"You started it, you all wanted to go on the greatest of all trips at the same time".

"Yeah, well you should have known that and recruited accordingly".

"Well if your suitcases weren’t all black with wheels it would be fine".

I didn’t even make that last one up and it goes back to mental receptiveness. In a sea of black suitcases, the one that will be remembered and easily identified is the one of a much brighter colour. That’s why I’ve just bought a shiny new yellow suitcase for my holiday.

Just to note that the Outrider will now be taking a summer break. Unless airport chaos has been the causality of a huge increase in sales of yellow suitcases, we’ll be back in September.

NEWS & VIEWS

Some of the news stories I’ve been reading recently.

1. Market dynamics: mixed signals

The froth is perhaps starting to come off with flight prices falling slightly. The latest US consumer price index saw a 1.8% drop in airline fares in June though they’re still up 34% from a year ago. Meanwhile in Europe the ongoing disruption at airports is “substantially dampening demand”?according to ForwardKeys, the travel intelligence specialist. Flight bookings in the first week of July for summer departures were 44% below 2019 levels. That’s a sharp drop off from May, when summer bookings were almost on par with 2019. In the UK a YouGov survey found that 13% want to book a holiday but have not due to cancellations and delays and 60% don’t plan to travel abroad in the next 3 months.

Despite that, a forecast from the U.S. Travel Association projects that all segments of travel will grow quickly this year in spite of rising inflation not slowing down until 2023. The report suggests that there is a long road ahead for business travel recovery but if photos in my LinkedIn feed are in any way representative, business is travelling again and global teams getting together. A report by Skift suggests that virtual events are down 65% compared to 2021 while live in-person events are just 4% below 2019 highs.

2. The era of cheap holidays is over

The shock waves from pandemic travel restrictions being lifted continue to rock the market. With travel spending outpacing employment levels, customer demand is overwhelming resorts and airports, frustrating the desire for stress-free holidays. The solution is better pay but that impacts prices and many former tourism workers still won’t be tempted back having moved into other sectors less affected by seasonality, shift patterns and the risk of another pandemic. The Portuguese Hoteliers Association are declaring that “the era of fast, frequent and cheap holidays is over.”

3. Slave to the algorithm

Last week Instagram made changes to the algorithm which decides which content to show in users’ feeds. Forced into a quick u-turn after a huge backlash from content creators on the platform, not least from Kylie Jenner, the change was designed to surface more video content from outside the people you follow. In other words, Instagram was trying to be more TikTok. Despite the u-turn, the Meta platform insisted that video is the future and it would seem that this direction of travel is inevitable as Instagram desperately tries to stop TikTok eating its audience and its platform for content creators.

4. The cookies still won’t crumble

Google has once again delayed the replacement date for third party cookies on its Chrome browser. Google had originally aimed to deprecate the technology by, well now but it has been pushed out for a second time to 2024. While this is good news in a way for advertisers as cookies fuel much of the digital advertising ecosystem, however the long goodbye is proving a little tiresome and advertisers are busy testing alternatives like TTD’s Universal IDs.

5. The pandemic is changing work and traditional travel patterns

While the Great Return to the office continues, many workers are still operating remotely which is upending existing travel patterns. According to Deloitte 20% of travellers plan to work on the road this summer and, with greater flexibility, 80% plan to extend the length of their trips. These new working patterns are beginning to flatten the traditional travel peaks with Sunday and Monday flights becoming more popular and airfares falling on Fridays and Saturdays.

6. Domestic travel in China shows all the signs of pent up demand

The Chinese tourist island of Hainan is experiencing a surge in domestic arrivals. With mainland China still under strict travel restrictions, the island is in high demand for its sunshine and duty free shopping. When revenge travel does eventually subside elsewhere in the world, the next wave will come from China.

7. Minecraft bans in-game NFTs

Minecraft developer Mojang Studios has banned NFTs within its platform. With nearly 150M players worldwide this comes as a further blow to speculative NFTs with owners already facing significant losses in value.

8. Full steam ahead for cruises as CDC ends Covid-19 program

The U.S. Center for Disease Control ended its Covid-19 program for cruise ships which required all passengers to be tested and encouraged vaccinations for staff and passengers. Cruise lines can now determine their own policies regarding vaccination, testing, and quarantine requirements.

9. And finally…a cooling wall to beat the heat

With temperatures hitting 40°C in London this summer, any relief from the heat is welcome. To that end drinks brand White Claw built a six-metre frost wall mural where hot and bothered Londoners could cool down. Created with cooling strips and touch-activated gel cooling pads, the wall provided a break from the heatwave, and plenty of PR.