The New Normal May Look Very Much Like The Old One

#6 - 15th June 2022

Hello and welcome to another one of these.

With many industry measures returning to 2019 levels it’s tempting to look at current trends and assume the world has changed. But the chaos at airports across the word shows that we are still on the journey to ‘normal’ and that old adage remains that the more things change, the more they stay the same.

The axioms of the post pandemic ‘new normal’ were said to be: an acceleration of ecommerce, an explosion of D2C brands, a surge in consumer spending, and a recasting of the workplace. These were to be the legacies of lockdown, the great leaps forward. But these were pre-existing trends and the leaps have largely regressed back to the long term trend as it has in the case of ecommerce.

The D2C explosion saw companies like Huel, Allbirds and Casper emerge and prosper, but the biggest growth in DTC is now coming from established brands. Nike, for example, drives 30% of its revenue through its digital channels direct to the consumer.

The surge in consumer spending, which has manifested itself in tourism as revenge travel or GOAT (Greatest Of All Trips) is a key factor in current?sky-high flight, hotel and?car rental?prices. And yet passenger numbers are still below the 2019 level and the long airport queues are more a consequence of staff shortages than high demand. The revenge spending can’t go on forever and, with an economic downturn on the horizon, think of the current travel chaos as a pandemic aftershock rather than the new normal.

That leaves us with the recasting of the workplace which may be the one true post-pandemic transformation. It isn’t new either however. Those that could were already enjoying remote working and working from home days long before COVID hit. Work-life balance, reduced summer hours and the experimental four day week were being discussed and trialled. But the scale of working from anywhere and the rise of the digital nomad does create opportunities for the travel industry. The only question is whether it’s here to stay.

A study this week found that?only half of workers who have been ordered back to the office full-time are actually showing up for all five days. The percentages complying get higher as the number of days demanded in the office falls, but even at one or two days, 16% are still staying away. The survey also found that 40% of managers whose workers are staying away are doing nothing to address it. Businesses are still very much wrestling with how to motivate and retain staff while building a better, more collaborative culture.

It’s tempting to think that work-from-anywhere is now the only direction of travel. Professor Raj Choudhury from Harvard Business School on the excellent?Eat Sleep Work Repeat podcast?stated that, “There are two kinds of companies: one is going to embrace work-from-anywhere, and the second is in denial.”

However while the increased flexibility is much valued, working-from-home isn’t necessarily making us happier. According to Gallop’s recent?State of the Global Workplace Report?after years of steady growth, global employee engagement has flatlined since 2020 and gone backwards in the US and Europe.

Clearly there is work to do here. Very few want to turn back the clock to a 5 day office week, and various surveys find that 64% of workers would quit if forced to, but there may well be greater enthusiasm to return to a reimagined office culture focused on a more collaborative, creative environment.

Ultimately I suspect there will be a greater return to the office than Professor Choudhury believes. We are social creatures who derive satisfaction from team work and often identify ourselves through our jobs. Once businesses figure out how to make work, and workspaces, more compelling I believe there will be greater enthusiasm to endure the commute for at least part of the week and prove that the more things change, the more they stay the same.

NEWS & VIEWS

Some of the news stories I’ve seen this week.

1. US drops COVID testing. Japan relaxing entry rules

The biggest news of the week for travel is the end of the?negative COVID test requirement?for in-bound US travellers which, although welcome, will put further pressure on availability and prices. Meanwhile Japan has welcomed back overseas visitors but they must be?escorted by a guide?from entry to departure and masks must be worn in all settings.

2. Air travel chaos will get worse before it gets better

Staff shortages cannot be resolved in time?to cope with surging summer demand. After drastic downsizing of airlines during the pandemic and relentless cost-cutting, the industry is struggling to attract staff. Meanwhile training and security checks cannot safely be completed in time for summer. Airlines then cut capacity by cancelling flights which, in turn, drives up prices as demand outpaces supply.

3. How glamping became China's hottest new travel trend

I mentioned my own camping trip in last week’s newsletter. Sadly it wasn’t in China but the?post pandemic trend for sleeping under the stars?is global. Young urban Chinese aren’t quite ready to give up their soft mattresses just yet though and glamping is also perfect for their daka lists - "clocking in" at Instagrammable places.

4. First zero emission fjord cruise sailing

It was nuclear powered fjord cruises in last week’s newsletter, now Havila Voyages has claimed the?first hybrid battery powered propulsion. Although only under batter power for three hours it comes as Norway has decreed that all cruise ships must be emission-free in world heritage fjords no later than 2026.

5. High fuel prices offer opportunities for hotels to accommodate EVs

Hotels are rolling out free electric vehicle charging stations?for guests plus website search filters to enable travellers to filter on those properties.

6. The surprising afterlife of used hotel soap

Ever wondered what happens to the millions of half-used bars of hotel soap every day? One man did, and now Clean the World is?repurposing them for children in need.

7.?It’s just stuff

Outside of the travel sector, this is a fantastic example of contrarian marketing. The Swedish insurance market, like most, is dominated by fearmongering marketing messages around death, car crashes and property damage. To create stand out and appeal to a younger audience,?Hedvig Insurance celebrates risk?with messages like 'Ride your bike like it might get stolen’, and ‘Go get in trouble’.?In 5 years they have become the fastest growing home insurance company in the Nordics.

Hedvig TV ad -?https://lnkd.in/eh9_B2rd

8. And finally…

Stay in?Scooby Doo’s Mystery Machine. Request to book opens on Thursday, June 16th.