SINGAPORE, 20 April 2020: We have to admit that nobody knows for sure what will happen tomorrow never mind a month from now, but that doesn’t stop teleconferencing popping up to peddle cures for the Covid-19 crisis.
Predictably we rush to download Zoom so we can be educated and possibly hacked at the same time. Facebook noise and claptrap tells us salvation is nigh. The herbal medicine salesmen are rolling up in their covered wagons; hoards of them touting instant cures for Covid-19 depression.
First, we have to assume the speakers are privy to the inside track that eludes the rest of us right now. They know something we don’t, and they are kind enough to share it. We are likened to lost sheep herded to a revival tent where the good shepherds promote their commercial cures. They haven’t quite worked out how to pass around the collection plate yet, which is a definite downside for teleconferencing. We like it as long as it is free. Put a fee on and the audience bolts.
We are supposed to believe that if we join these free online events, we are going to discover sun rays breaking through the dark clouds. That might well be for the people who are organising the online conference agenda, but for the rest of us, there are no instant fixes for Covid-19 on the horizon.
Even as travel influencers assure us that our salvation is at hand, global corporations still have hundreds of executives stranded away from their homes in foreign lands due to sudden travel bans and cancelled airline services.
Business travel remains grounded until reliable airline schedules are reinstated, and that uncertainty could threaten regional shows and events into the fourth quarter.
There will be people in the online audience who are worrying about how to fund this month’s payroll and others sad that they had to fire loyal staff with no hope of ever rehiring them.
That human tragedy is overlooked by the talking heads on stage who are agile, gifted ambulance-chasers invariably waving crisis solution papers that date back to SARS.
Nations are now entering version two lockdowns after the first efforts failed to contain the Covid-19 outbreak. They face second and third waves like the one unfolding in Hokkaido, Japan, right now.
As long as there is no cure or vaccine, very few people will be willing to risk non-essential travel, and that could be the new norm for many months to come.
Some governments in Southeast Asia talk of travel recovery in May. It’s a pipedream. June could be the month when airlines resume limited services, but if Covid-19 fails to burnout that prediction is also a wild guess.
We don’t need an online pop-up circus to tell you all of this. We already have enough common sense to work out where we are heading with Covid-19. We are talking about how to feed families, pay school fees when the breadwinner working in travel and hospitality is redundant for months on end. A three-month fix won’t work.
Call a tour operator and ask which part of 2020 will see recovery. Wait for the silence to end. “How about the fourth quarter for China and North Asia markets with a small showing from Russia, but don’t hold your breath more likely in 2021”.
Tour operators in the business since the 1970s say they are packing up. Just one too many disasters? Do we accept that a giant of tourism such as Thailand could end the year with 16 million tourists down from 39.8 million in 2019?
Experts we can trust are talking about three possible scenarios.
V: It will be over soon
It signals an optimistic V recovery sharp down with a short pause at the bottom, followed by a sharp rise in May and June to herald the first signs of recovery.
U: Slow recovery
The U recovery comes with a decline and an extended curve touching ground zero, followed by a steady recovery in the fourth quarter.
L: Not over anytime soon
Then there is the worst-case scenario. The L recovery that doesn’t fit the pop-up circus commercial pitch at all. It illustrates a dramatic decline hitting ground zero bump and then a trajectory that agonisingly creeps above the ground zero line ever so slowly. On the way, it takes us along a path to global depression and massive unemployment worldwide well into 2021 or even beyond.
The “L” forecast is unthinkable and convinces us to opt for the middle option; a U recovery. But then it is really out of our hands. If a vaccine and cure are just around the corner, then humanity gets an out of jail card at the 11th hour, and a V or U recovery scenario unfolds. Finding a vaccine and medicine that can kill Covid.19 in its tracks is the only course that will save travel as we know it.
(Scenarios: Betashares.com)
https://www.betashares.com.au/insights/the-v-u-or-l-shape-investing-ideas-for-recession-recovery-scenarios-webinar-recap/
Good article, and well said Don, you have hit the nail on the head!
It is going to be an “L” shaped recovery, with a Capital “L”, and those of us who weill recover from it stronger and earlier are those of us who recognise that from the beginning, and prepare accordingly.
The art of crisis management is “Expect and prepare for the worst, whilst hoping for the best.”
Indeed, the many Webinars and Zoom Conferences being held mainly serve to massage the egos of those organising or moderating them, who seem to love the sound of their own voice, and take comfort and pleasure from telling us fellow professionals what we already know.
Recovery will come, but we must not hasten it. Patience will reward us.