Certain industries severely hit by government restrictions due to cases of COVID-19 are banking on a boom when the number of vaccinations indicates it is safe to return to normal.
Bank of England Governor Andrew Bailey believes people will “go for it” when restrictions are lifted. The Bank of England believes households in the UK will have an estimated US$171.7 billion (£125 billion) in extra savings, accumulated since the start of the coronavirus pandemic. In Australia, the Treasury has estimated households and businesses will have saved an additional US$153.6 billion (A$200 billion).
“The risk is on the upside – that after you lock people up for this long they go for it,” Bailey told The Observer. “One interesting question is how much that desire to spend comes up against a supply side that doesn’t recover immediately.”
Carlsberg Group CEO Cees ’t Hart believes pubs and brewers will experience a surge when the COVID-19-related restrictions are lifted.
“If vaccinations come through, we’re pretty optimistic because we see people want to go out. In the 1920s, after Spanish Flu and World War I, there was a dramatic surge and you saw things like jazz clubs and ballroom dancing. After COVID-19, there will be for sure some bright side in our kind of business,” he told the Financial Times.
The boss of the world’s third-largest brewer said he believed the pubs and brewers that survived the pandemic would do “very well”.
“We will appreciate what it is to be free to go out to pubs and see friends.It will not just be a few weeks or a month; it will last a lot longer.”
Carlsberg Group forecast a 3-10 per cent rise in underlying operating profits this year on the expectation that Europe would have a difficult first quarter, with pubs and restaurants to start reopening in the second quarter and that by the Northern Hemisphere summer, things would be back to normal in Europe.
It is not just pubs, cafes and restaurants in the hospitality sector that will benefit. In a return to normality, people will go on holidays and restock their wardrobes. Bands will tour and music festivals will be a calendar date once again. Movie theatres will admit more patrons and theatres will fully reopen.
“The extra savings over the past six months and the bigger financial buffers can support future spending – people will have more freedom to spend as restrictions are eased and be more willing to spend as uncertainty recedes. So we are expecting the recovery in consumer spending to continue,” said Philip Lowe, Governor of the Reserve Bank of Australia.
Futurist Gihan Perera said Hart’s comments were spot on.
“COVID-19 robbed us of many of the things we took for granted, and people are craving opportunities to reach out and connect in person again.We have already seen a hospitality boom in Western Australia – which has been essentially COVID-free for almost a year – with cafes, restaurants and pubs filled to capacity since mid-2020,” he said.
“Expect this trend to expand elsewhere as restrictions ease and crows become safe again. Consumer marketing research company Brandwatch supports this trend, reporting the most popular new year’s resolution in 2021 was to ‘see family and friends more’ – a resolution that didn’t even make the top three in the previous three years.”