The only travel industry prediction you need.

This is the last Travel Industry predictor you need to understand for at least another few weeks. I’ve looked at a few dozen similar, from a number of very credible sources, and compiled them all onto one graph. I can say with almost certainty that one, or a combination of these is going to be quite accurate.

What’s the point here? The point here is that there is no point.

Nobody knows what will happen next week, never mind 3 years from now. Where are you getting this data from to form your future predictions?

1. Asking consumers / travelers? I’ll tell you when consumers will travel again. They’ll travel when they’re allowed to, when they feel it’s safe to do so, when they have money to pay for it, and when the transportation options are available. You can add to that another 20 factors which we (and they) haven’t thought about yet. Once we get positive answers to all of those, then will the Brits and Germans go back to Spain again? Yes, on the next flight.
2. Operators / suppliers. They might look at some consumer data above, but more likely they’ll ask friends, peers and colleagues. They may or may not realize that those responses are mostly worthless chit chat. The other problem with that is 'misery loves company' - most people dwell on the negative. So if you ask them for predictions, you might get a projection based on junk data, or a wild guess, or based on what their friend said because his friend works at a bank, so he must know.
3. Experts. Probably slightly better because experts presumably have a reputation to uphold, so they may think about it more thoroughly and use actual data. The only problem here, is that except for snippets from China, there is NO data. We’ve never been through anything remotely like this before. The data is based on 1 and 2 above, and we (I) established that they don’t have a clue. So if you survey your list of travelers, suppliers and experts, you’ll collate a lot of data. Unfortunately, junk data + more junk data = even more junk data. 
4. Agendas. People make up numbers to serve their own agendas. Trump was only just spouting off about zero cases, and a few weeks later he thinks 200,000 deaths would be “great”. California’s Governor said 3 weeks ago that 54% of Californians would be infected in the next 8 weeks. Daily new cases peaked about 10 days after that, and the current number is 0.57% increasing by 0.000025% per day. (Before you start - he announced it AFTER lock-down. Maybe a white lie. Maybe justifiable this one time, because it kept people at home. Next time? Lets hope there isn’t one). I've yet to see a government statement that under-predicted the actual number of future cases. Most over-shot by orders of magnitude. Did they know that? I'd say probably yes. How else do you scare the entire population to stay at home. Again, I'm not judging. It was probably for the best. But if you use that to predict the future - well, you see the problem.
5. Geography. Countries and regions and have completely different cases. The USA is fortunate, with a huge and relatively wealthy population. Domestic travel is already significant. The US can also isolate quite well. Especially if we collude with Canada. But Turkey? Isolating is not so easy. Dubai? Domestic travel - not so much. So let’s agree then not to put the USA, Turkey and UAE on the same trajectory.
6. Government. These subsidies will have a huge effect. The USA has already pledged $2.1 trillion at federal level and interest rates didn’t flinch. That amount of cash injection is unprecedented. In an election year, with almost zero interest rates, let’s assume most politicians will probably think it seems like a good idea to borrow even more. And why not. If you can borrow money at 0.2% and lend it to businesses at 2% you have a win-win-win. The 2008 fed bailout was $700b. The governments of Germany, Japan, France and the UK have pledged similar or even higher cash injections. Now, if you live in Italy, it’s more problematic - I’m sure they’re being especially nice to Germany right now. If you live in Venezuela! Even less lucky.
7. Products. Every product will be affected differently on the other side. Private jeep tours of some wilderness area - will probably be a booming product after this. Broadway in NYC - that might be a tough sell. Some products can be quickly modified to fit perfectly with whatever the short term new-norm looks like. Others can't. Like anything, there will be winners and losers. People will need something to do though. This pent up demand is real. There WILL be winners.
8. Travel Types. Airlines will ramp up capacity as they see fit. Hotels don’t have that incentive as their marginal costs are much lower. They will go quickly to 100% capacity. Now add to that the cancellation of major conferences and conventions, and it means REALLY cheap hotels (sorry, hotel folks) and not fully of these pesky conference people who barely leave the convention center. For tours and activities, that’s great news. Major cities might not be a natural winner after this, but everything has a price, and if the hotels manage revenue properly, they’ll fill the rooms at rock bottom prices. That’s great news for other services around those hotels.

I could probably go on. But that’s not the point. Unprecedented, unparalleled, whatever word you choose - we are just not able to make accurate industry-wide forecasts right now. In a few weeks from now, there will be some patterns developing, as countries come out of lock-down and start moving again. Does that mean we should just not bother making any predictions at all right now about the general market? Many will disagree, but i’d say yes. If you insist, then at least add a huge asterisk. Building various scenarios is useful (see this report by Mckinsey - its well worth a read, or at least a solid scan) if you have an understanding that what you are doing is making multiple plans around various future possibilities. To be very clear, right now everybody NEEDS to make decisions for their businesses based on their own conditions, and based around all the accurate information available (really, read that report above). My only objection is against these generic 2,3,4 year models.

What’s the harm?

The problem is that people believe these predictions and make decisions around them. To make my biking plan for the weekend I go to weather.com. I don’t research their methodology, I just glance through for a few seconds because I trust them (mostly). If there’s a potentially once-in-a-lifetime hurricane coming, I’ll still trust them. I’ll just watch much more closely. The difference now though, is that I’m basing my future existence on them being correct. If they don’t have a clue, I’d rather they say that up front so I can make my own plan based on other factors.

So if you have that credibility, and you you regularly produce reports and forecasts, which in peacetime are reliable, then great, but don't extend that out to a period where its pure guesswork, unless you call it out very clearly.

Still, what's the downside in being prepared for the worst case?

There’s a difference in preparing for worst case, and planning your whole future around that being the most likely scenario. 

This might sound off track, but I used to coach my kids at soccer. We had good years and bad years. In sport, every player has a breaking point. A point of no return, when their game is lost. For 10 year old girls, I figured it was 4 goals. 3-0 up and the other team scores, it’s game on. 4-0 and its game over. It’s all about crushing their spirit. Destroying their will. Ending all hope. On the field, my coaching words were (slightly) more diplomatic.

So when people are told that 2020 is over, or that 2021 will be 50% down, or that nothing will be the same again until 2025, you’re wrong. It’s an opinion, and you’re crushing hope with those predictions. People are quitting, because their coach just told them the game is lost. But they didn’t just lose some relatively meaningless soccer match (which was forgotten as soon as the post-match cupcakes appeared), they lost their business, and their livelihood. 

I’m really sorry for those who have lost everything. For many, unfortunately, if all of those factors above are against you, you may not have a way out. If you can comfortably hibernate for a while, and you aren’t worried about competition getting ahead, you probably should. For many others, you need to fight. Get creative. Get scrappy. Get smart. Recreate your products. Change your marketing. If you have employees still around, get them pointed in the right direction. There WILL be winners on the other side. You just need to be one of them. Despite what you might be reading, you’re only 3-0 down right now.

In case you still don’t get the point of the graph. The axes are not marked. The timeline is not defined, and the detailed numbers are to throw you off track and add credibility. I assume the detailed number part worked as intended.