Spending after Covid: Home is sweet, travel is not

We reported about Corona already in January, when it was still a non-topic in the mainsteam media. In early April, when everybody was in panic mode, we predicted that home upgrading will be a big topic in post-Covid times. And indeed, home furnishing is the only category which saw a 200% increase in interest compared to pre-Covid times.

Data by SimilarWeb/Financial Times

Also restaurant bookings in Europe are on the way to recovery, but the tourism sector is not getting back to pre-Covid levels.

The tourism industry has a structural as well as a situational problem. Travelling through airports was increasingly unpleasant already before Covid, but low prices and the choice of a multitude of destinations were attractive enough to offset these factors. Airports and airlines did not pay attention to the entire customer experience, as customers came anyway. Now, in addition to bad experiences in airports and on planes, travelers also have to deal with permanently changing regulations and entry requirements. As a result, many decide not to travel.

borderless no more

For instance, Austria lifted travel restrictions to Croatia on June 16, but Slovenia (a country which, for travelers from Austria, has to be crossed in order to enter Croatia) considered closing its border to Croatia just one week later. A popular travel destination, Thailand, remains closed to travellers, despite having no cases since over a month, while the Maldives, an island destination, declared strict travel restrictions with visa fees, multiple testing and a minimum 14 day stay. However, realizing that with these restrictions nobody came, the country lifted these restrictions again 4 weeks later.

Tourism depends on a sense of trust that the time spent abroad will be safe and enjoyable. Facing the uncertainty of each country declaring different and often changing travel restrictions, vacationmakers prefer to stay home and take short local trips. As long as airports, airlines and tourism authorities in different countries do not coordinate to give tourists assurance that their trips will be hassle-free, tourism and tourism-related industries will not get back to pre-Covid levels. This will result in marked economic consequences, especially in countries with a high dependence on tourism revenue.