Executive
Perspectives

What the Evolution of Travel
Means for Business
June 2021

BCG Executive
Perspectives
IN THIS DOCUMENT

Travel and tourism, including hospitality and leisure, was one of theareas most severely impacted by COVID-19, as lockdowns and travel
restrictions slowed activity to a trickle or stopped it altogether. This
led to a direct loss of $4.5T in global GDP, and ripple effects were felt
across companies and industries as organizations struggled to find
new ways to connect with their customers and employees. Now with
COVID-19 vaccinations and cases controlled in some areas, short- to
medium-term demand spikes are expected, accompanying thelonger-term sustained changes needed to navigate the new world.

WIDE-REACHING IMPLICATIONS OF CHANGESIN TRAVEL IMPACT MANY INDUSTRIESThe changes in global travel patterns will have broader impacts
throughout organizations worldwide. Leisure and business travel
spending reallocated during the pandemic is starting to return.
Other industries can apply learning from the travel industry, such as
on navigating large demand fluctuations. Companies can also think
about changes to their business travel operating model and ways tomake business travel more sustainable.
Sources: WTTC, BCG analysis and case experience1

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June 2021 Version 2.0

TRAVEL & TOURISM RECOVERING AFTER DIFFICULT YEAR

What the Evolution of Travel Means for Business
A

1

2

3

TRAVEL & TOURISM
TRENDSIMPLICATIONS FOR
ALL COMPANIESIMPLICATIONS FORTRAVEL COMPANIES

Source: BCG analysis and case experience

Travel demand is increasing, but recovery will vary by country and is tied to vaccine progress

B Expect high near-term demand in leisure travel with potential structural changes inbusiness travel
C

Consumers are calling for increased sustainability as travel industry responds with initiatives

A

Prepare for volatility from consumer spending shifts with demand sensing

B

Update business travel operating model to account for hybrid and remote workC

Improve business travel sustainability by reducing footprint and engaging suppliersA

Changing customer needs require continued investment in safety and hygiene protocol,
demand sensing, and sustainability

B

Opportunities exist to establish new cost baselines and implement scenario-based agile
planning to improve operations

2

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June 2021 Version 2.0

SummaryDEVELOPMENTS IN TRAVEL AND
IMPLICATIONS ACROSS SECTORS
Impact and trends in travel and tourism
Implications from travel recovery for all sectors

Copyright © 2021 by Boston Consulting Group. All rights reserved. Updated 19 May 2021 Version 11.1.

BCG Executive
Perspectives
AGENDAUPDATED ANALYSES AND IMPACT
Epidemic progression and virus monitoring
Economic and business impact

3

Economic impact

Business travel

Tourism

Airlines-$4.5T 62M

92%

74%

26%

GDP loss in 2020
from COVID-19
impacts on travel
and tourism

Of all companies
continue tosuspend most or
all international
business travel
as of May 2021

Decrease in global
international
tourist arrivals
from 2019 to 2020

Of all planes owned
by airlines are stillin storage as ofJune 2021

Sources: WTTC, GBTA, UNWTO, Cirium

Job loss

Estimated jobs
lost in travel andtourism sector
globally4

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June 2021 Version 2.0

There have been major disruptions to travel and tourism

1A Travel and tourism trends | Travel demand is increasing, but
recovery will vary by country and is tied to vaccine progress(January – April 2021 comparedwith January – April 2019)

Countries that have seen better COVID-19 vaccine
progress are seeing faster travel recovery
Growth in relative ticket volumes, 2021 vs 2019 over time(baselined to Jan 31, 2021 as 0%), destination data
400%
200%

100%

Israel +393%

Vaccine doses
administered perperson by Apr. 4

1.2
0.9 doses
administeredper person

Booking strength inIsrael up almost 400%vs. end of January

US +59%0%-100%
Jan 24EU -20%
Feb 7

Feb 21Mar 7 Mar 21

0.5
0.2

Apr 4

With just 4% of Indonesians fully vaccinated and doses secured for only ~80% of the population by 2022,
tourist destinations such as Bali will see a slower return of travel
1. Carrying capacity based on a measurement of ASKs or available seat kilometers for domestic and international arrivals, comparing 2019 and 2021 data
Sources: TRIP, ARC/IATA, Our World in Data

5

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June 2021 Version 2.0

Global airline capacity1
down due to lower demand

1B Travel and tourism trends | Expect high near-term demand in
Leisure travel has near-term pent-up demand
as consumers feel safe to resume travel

Business travel recovery isslower with structural changes

Some domestic markets have recovered to near 2019
levels, especially on weekends and holidays when leisuretravel is prevalent

50%+ of travel managers expect
reduced travel budgets as they
add greater flexibility forremote-working roles% of 2019 domestic airline ticketing volumes 1
US May '21
US Memorial
Day Weekend '21

74%
90%

Other consumers are eager to travel soon: 56% ranked
leisure travel among their top post-vaccination activities,
second only to seeing family and friends
1. As of May 2021
Sources: BCG COVID-19-related measures survey of 300+ global companies, TRIP, ARC/IATA, GBTA (April 2021), BCG analysis

New reasons for travel as
remote and hybrid workers
gather for training andaffiliation
Most companies do not expect
to return to full businesstravel until 2023+

6

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June 2021 Version 2.0

leisure travel with potential structural changes in business travel

Travel and tourism trends | Consumers are calling for increased
sustainability as travel industry responds with initiatives

Travelers who are looking for
more green-friendly travel brands:

68%

The travel and transportation industry is
responding with sustainability initiatives
Most major airlines have committed to net-zeroemissions by 2050 and are exploring sustainableaviation fuels (SAFs) to comply with new regulations~30% of global rail track systems have been electrified,
and this is expected to grow to ~40% in the next 5 years

Consumer preferences will have impacts
on both leisure and business travel
Sources: SCI Verker Gmbh, American Express Global Travel Trends Report (March 2021), press search, CLIA

The cruise industry has already invested $24B
in sustainable ships, with a target of 40% reduction
in carbon emissions by 2030
7

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June 2021 Version 2.0

1CImplications for all companies | Prepare for volatility
from consumer spending shifts with demand sensing

Consumer spending shifts

While leisure travel decreased, other consumer areas increased during pandemic
Largerchangeduring
COVID-19

Short-term spikes

Structural changes

COVID-safe
home renovation

New e-commerce
habits

Early pandemic
grocery panic

Sustained
pet care products

Demand sensing

EXAMPLES

Spending will begin to shift backfrom some categories as travel
resumes and public spaces open

Greater lasting impact on industry

Companies can prepare for volatility from demand fluctuations by bolstering
demand-sensing capabilities
Companies must gather and analyze data from a variety of first- and third-party sources, such
epidemiological data; this information can provide indicators to support agile planning

Demand sensing –lessons from travel
The travel sector faced
massive volatility
swings throughout the
pandemic; increasing
accuracy of demand
forecasts is importantto react quickly tochanges
Example: Car rental
company implemented
a real-time demandforecasting platform1
and boosted demandsensing accuracy by
30 pp

For example, products and investments (e.g., sales team deployments) can be adapted based ontrend shifts; supply chains and operations can also be optimized to scale up and down rapidly
1. Using BCG Lighthouse real-time demand-forecasting platform
Sources: BCG and Skift, How the Disruption of Air, Cruise, and Hotel Capacity Created Unique Opportunities article (April 2021), press search, BCG Lighthouse, BHI, BCG case experience8

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June 2021 Version 2.0

2AFuture of business travel

Travel changes impact the future of work and how business relationships
will be conducted
Business travel in the future may look different:•

Duration will shift away from short, repeated trips•

Rationale includes bringing distributed/remote teams together for rapport and training•

Companies must be more flexible and change their business travel operating model

42%

Business travel management has shifted, and some funds
reallocated may not return as travel resumesof companies in May
2021 plan to resume
domestic businesstravel in near future,
up from 28% in March1

Companies can update their business travel operating model:
Train travel managers
to manage new risks

1. GBTA survey, (n=457-486 in May and N=253-362 in March)
Sources: GBTA survey (March and May 2021), BHI, BCG case experience and analysis

Reassess baseline ofbusiness travel
spending

Impact on future ofwork from businesstravel changes
Companies haveopportunity to develop
hybrid (onsite andremote) work model:
Favor simplicity –focus on 2-3 most
relevant models that
support businessobjectives
Biggest success factor
is to test and learn.
Pilot different models
and test for 3-6 mo. tolearn and refine

Provide cloud-based,
integrated solutions
9

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June 2021 Version 2.0

Implications for all companies | Update business travel
operating model to account for hybrid and remote work

Travel operating model

2B

Business travel sustainability

Climate considerations are increasingly important; improving business travel
sustainability can be a key part of a company’s broader sustainability plan50%of organizations
placed higher
priority on travel
sustainability inpast 12 months1

Steps for companies to optimize travel carbon footprint:•

Develop a realistic net-zero pledge or emissions goal•

Invest in online tools that measure or estimate emissions•

Decide how to reach the reduction goal
(e.g., reduce trips, optimize meeting locations)

Engaging business travel suppliers (e.g., airlines, hotels, travel managementcompanies) in climate efforts can make a difference

1
Pressure from corporate
customers can be effective

2
Emissions transparency isdifficult, but important to ask for3

Sustainability efforts– examples:Technology company
shares sustainability
initiatives withtravelers and ispushing hotels toprovide better dataand emissions
reduction targets
11 large corporations
partnered with a global
airline to accelerate
solutions that
decarbonize aviationby allowing partners to
pay additional for SAF3

TMCs2 can help push green
initiatives and gather data

1. Business Travel News (BTN), 2021, Sustainable Business Travel Survey, based on 315 buyer respondents (Feb – Mar, 2021). 2. Travel management companies. 3. Sustainable aviation fuelSources: Business Travel News, press search, BCG case experience

10

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June 2021 Version 2.0

Implications for all companiess | Improve business travel
sustainability by reducing footprint and engaging suppliers

Supplier engagement

2CImplications for travel companies | Take opportunity to double down onchanges accelerated by COVID-19 and reset traditional approaches
A. CUSTOMERS AND REVENUE

B. COST AND OPERATIONS

Safety and hygiene

Demand sensing

Sustainability

New cost
standards

Agileplanning

Continue upholding
COVID-19 safety
standards and encouragepractices such as hygiene,
vaccination, etc. Adapt
business offerings
accordingly

Continue to refine
operational andcommercial demandsensing platforms.
Develop omnichannel
capabilities that support
customer loyalty

Push current status quo insustainability and makelonger-term investmentsthat lead to step-change
improvements. Explore
new innovations andpartnerships

Institutionalize lasting
cost structure changes
brought on by COVID-19(e.g., organization andstaffing models, capital
assets) and establish
new baselines

Invest in digital andorganization capabilities
that allow for quick andaccurate planning forany possible scenario
and scaling up or downof operations as needed

Lodging company expanded
offerings in remote locations
that facilitated distancing,surpassing even 2019 sales

Travel distributors are
increasingly integrating
online and offline offerings(e.g., use digital to upsell)

Airline replicates sharkskin
aerodynamics in coating
technology to boost fuelefficiency of cargo jets

Many ships in cruise industry
were scrapped or sold.
Opportunity to buy modern
ships with better unit costs

Airline implemented tool
using 1st- and 3rd-party
data to estimate staff needs
for up to 100 day-of
scenarios

Sources: BCG case experience and analysis, press search11

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June 2021 Version 2.0

3

Mixed travel recovery sentiments across the world as certain regions look toreopen while others remain controlled; various tactics explored in recovery
As of 27 May 2021
May 27, 2021

May 26, 2021

EU governments agreed to allow
quarantine-free travel for vaccinatedtourists from select countries

Israel welcomes first tour group since
the onset of the pandemic"Fortress Australia": Calls to open up
borders are meeting resistanceMay 4, 2021

May 24, 2021

May 14, 2021

G20 nations representing world's
largest economies support vaccine
passports

With Tokyo Olympics less than 2months away, U.S. warns Americans
not to travel to Japan as cases increase

Singapore-Hong Kong travel bubble
likely delayed as COVID-19 restrictions
tightenMay 18, 2021

Dubai targets over 5.5 million overseas
tourists this year as more restrictions
are eased

May 21, 2021

Virtual tourism can help rebuild travel
for a post-pandemic world
12

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June 2021 Version 2.0

May 19, 2021

BCG Executive
Perspectives

Impact and trends in travel and tourism
Implications from travel recovery for all sectors

AGENDAUPDATED ANALYSES AND IMPACT
Epidemic progression and virus monitoring
Economic and business impact

13

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June 2021 Version 2.0

DEVELOPMENTS IN TRAVEL AND
IMPLICATIONS ACROSS SECTORSSummary dashboard
As of 01 June 2021

Epidemic Progression

Consumer Activity

Business Impact

Global epidemic snapshot

Mobility

Stock market performance

172M

13.6M

3.7M

2B

# of
cases

# of
active cases# offatalities

Vaccine doses
administered

Month-onmonth
growth of
new cases2

Feb

Mar

Apr

May

Americas

0.6x

1.0x

1.2x

0.8x

Europe

0.7x

1.3x

0.9x

0.4x

Asia3

0.9x

1.7x

3.3x

1.0x

Economic Impact
IMF4 (Apr '21)

GDP forecasts (YoY%)
2021
Europe
US
Japan
China
India

0 2

4 6
4.4%

Banks58 10 12 14 16 18 20

6.4%
3.3%
8.4%
12.5%

Mobility6(month vs.
Jan '20)

Domestic air
travel tickets
booking7,8 (YoY)

Feb

Mar

Apr

US

-26%

-18%

-15%

Europe

--30%

-25%

Japan

-17%

-12%

Month end vs. 02 Jan '20

Feb

Mar

Apr

S&P500

17%

22%

28%

--24%

FTSE100

-15%

-12%

-8%

-12%

CHN SSE

14%

12%

12%

Volatility Index (S&P500)13

2.2x

1.6x

1.5x

US

2%

2%

18%

France

0%

3%

29%

China

56%

26%

34%

US

59

59

61

Germany

61

67

66

China

51

52

51

Steel production (YoY)16

5%

16%

24%

US

-37%

18%

189%

UK

-78%

-47%

181%

China

15%

138%

157%

Sales
Retailgoods sales9(excl. auto &
fuel, YoY)

US

6%

19%

Europe10

0%

12%

21%

China11

34%

34%

18%

Passenger
vehiclesales12(YoY)

US

-13%

61%

113%

Germany

-19%

36%

90%

China

397%

75%

9%

International trade
Trade value14(YoY)

Industrial production
Purchasing
manager’s
index15(base = 50)

1. Calculated as 7-day rolling average; 2. Calculated as monthly average of daily cases vs. previous month; 3. Includes Middle East and Oceania; 4. IMF Apr 2021 forecast; 5. For India, forecast is for financial year; for others, it is for calendar year; YoY forecasts; range from forecasts (where available) of World Bank, International Monetary Fund, JP Morgan Chase; Morgan Stanley; Bank of America;
Fitch Solutions; Credit Suisse; Danske Bank; ING Group; HSBC; As of reports dated 08 June 2020 to Mar 01 2021; For India's GDP forecast, World Bank's 2020 forecast from 08 June provides the upper bound of the forecast range; 6. Mobility values are calculated as the average of mean monthly mobilities in workplace, public transit, retail & recreation, and grocery & pharmacy and compared to abaseline from 03 Jan – 06 Feb 2020; Europe mobility values are calculated as the average of Germany, France, UK, Spain, and Italy; 7. Calculated as change in last 14 days rolling average value as compared to same period last year; 8. As of 01 Mar 2021; 9. Retail goods sales include online & offline sales and comprise food & beverages, apparel, cosmetics & personal care, home appliances, generalmerchandise, building material; do not include auto, fuel & food services; 10. Europe includes 27 countries currently in EU; 11. For China, Jan & Feb are reported together due to National Holidays. 12. Figures represent passenger vehicle (including sedan, hatchback, SUV, MPV, van and pickup) sales data for over same month in previous year; Europe value calculated as cumulative sales inGermany, France, UK, Spain, and Italy; 13. Underlying data is from Chicago Board Options Exchange Volatility Index (VIX); Volatility Index is a real-time market index that represents the market's expectation of 30-day forward-looking volatility and provides a measure of market risk and investors' sentiments; 14. Calculated as sum of imports and exports, measured in USD and compared toprevious year period; EU trade values between EU and all outside countries 15. PMI (Purchasing Manager's Index) is a diffusion index that summarizes whether market conditions, as viewed by purchasing managers, are expanding (>50), staying the same (50), or contracting (<50); 16. Data corresponds to G-20 countries (minus Indonesia). Sources: JHU CSSE, Our World in Data, WHO, World Bank,
IMF, Bloomberg, Google Mobility, US Census Bureau, Eurostat, PRC National Bureau of Statistics, ACEA actuals, Marklines, ARC ticketing data, STR, Statista, CBOE, OECD, BEA, GACC (customs) China, ONS, BCG

14

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June 2021 Version 2.0

To be updated in forthcoming editions

Case counts reduced as vaccine rollout continues, especially inNorth America and Europe
Epidemic Progression

As of 01 June 2021

1,000,000
India drove
massive surge
in new cases
and recentSouthdecline in Asia
America

800,000

600,000

North
America

400,000

Asia1
AfricaNorth
AmericaSouth America
North America
AfricaEurope200,000

0
Mar Apr May Jun

Jul

Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Month-onmonth growth 215% 15% 50% 60% 10% 10% 40% 45% 10% 0% (40%) 20% 60% (15)%of new cases2
1. Includes Oceania (Australia, New Zealand, Papua New Guinea and surrounding island nations of the Pacific ocean); 2. Calculated monthly as average of daily cases compared
to previous month daily cases and rounded to nearest 5%. Sources: Johns Hopkins CSSE; Our World in Data; Worldometer; press search; BCG

172M# of confirmed cases

13.6M# of active cases

3.7M# of fatalities

15

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June 2021 Version 2.0

Key observations

Daily new cases (7-day rolling average)Despite progress on vaccination across the world, caution required asconcerning variants spread among immune-naïve population
Time series view of variant frequency

Variants of concern compared with wild type4 variants of concern are ~80% of sequenced samples

Relative antibody resistance

100

10.0x

80

B.1.351(South Africa)

B.1.351 – 6%

60
B.1.1.7 – 48%

40

P.1 (Brazil)

P.1/P.2 – 7%

20

19A

20C

20G

19B

20D

20H/501YV2/B.1.351

20A

20E (EU1)

20I/501YV1/B.1.1.7

20B

20F

20J/501YV3/P.1 /P.2

May-21

Apr-21

Mar-21

Feb-21

Jan-21

Dec-20Nov-20

Oct-20

Sep-20Aug-20Jul-20Jun-20May-20

Apr-20Mar-20Feb-20B.1.617 – 17%
Jan-200B.1.617 (India)

21A/B.1.617

B.1.1.7

Wild type
1.0x

(UK)

1.5x
Likely range(Originally detected)

2.0x

Relative transmissibility

Note: Several of the concerning variants (e.g., those first identified in the UK and South Africa) share mutations (e.g., N501Y) while also having distinct mutations (some more than others)
Sources: JAMA, Nextstrain, Financial Times, Virological; Centers for Disease Control and Prevention; cov-lineages.org, Lancet Infectious Diseases, press search; Axios variant tracker; Nature

16

Copyright
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2021bybyBoston
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reserved.BCG
BCGExecutive
ExecutivePerspectives
Perspectivesupdated
updated10
30JuneApril2021
2021Version
Version2.0
2.0

As of 23 May 2021

COVID-19 has broad geographic reach today with countries
at different stages in their fightNon-exhaustive

Continuation

Resurgence

Curve was never quite flattened; ongoing battle

Curve was flattened but saw one or more resurgences

Daily new confirmed cases per million1

Daily new confirmed cases per million1

1,000

500

0

Mar ‘20Jun ‘20

Sep ‘20
Argentina

Dec ‘20
BrazilMar ‘21Jun ‘21Mar ‘20Jun ‘20

UAE

FranceSep ‘20

Dec ‘20

Switzerland

Germany

Crush and contain

VaccinatedCurve was flattened and case counts continue to remain low

Curve reduced through vaccination progress

Daily new confirmed cases per million1

Daily new confirmed cases per million1

Mar ‘21Jun ‘21

Spain

1,000

500

0

Mar ‘20Jun ‘20Australia

Sep ‘20
Singapore

1. Data shown as 7 day rolling average of daily new cases per million
Sources: Our World in Data; BCG

Dec ‘20Japan

Mar ‘21
South Korea

Jun ‘21Mar ‘20Jun ‘20

Sep ‘20US

Dec ‘20UK

Mar ‘21Jun ‘21Israel

17

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June 2021 Version 2.0

Epidemic Progression

As of 01 June 2021

Many large economies expected to continue recovery
and reach 2019 GDP levels between 2021 and 2022
Economic Impact

As of 01 Jun 2021

GDP forecast levels indexed to 2019 value (Base: 100)
Europe

China

Japan

India1

122.6

117.7

117.1

116

114.6

115.8
112.4

112

110.4

108

110.9
110.1

104.2

100

102.7
99.8
98.8

96

96.5
96.4

108.0

107.4

106.3

104

110.8

103.4

103.1

102.3
102.0

101.3

100.9
98.2
97.5
96.8
96.2

99.8
99.7

99.0
98.3
97.1
96.6

103.6

100.7
99.3

99.2

103.2
100.2

97.6
95.3

95.2
94.7

93.4

92

103.8

92.0

92.6

90.4

88

2021 forecast
vs. 2019

2019

2020

2021

2022

99-104%2019 GDP levels (Index)

2019

2020

2021

2022

96-98%
Forecast IMF (Apr 6, 2021)

2019

2020

2021

2022

2019

107-115%
Forecast World Bank (Jan 5, 2021)

2020

2021

2022

2019

97-99%

2020

2021

2022

99-108%

Forecast range from leading banks2

Note: As of reports dated 08 June 2020 to 01 Mar 2021, YoY forecast 2020 values are estimated actual GDP; 1. For India, forecast is for financial year; for other countries, the forecast is for calendar year; 2. Range
from forecasts (where available) of JPMorgan Chase; Morgan Stanley; Bank of America; Fitch Solutions; Credit Suisse; Danske Bank; ING Group; HSBC; Sources: Bloomberg; World Bank; IMF; BCG

18

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USRetail and recreation mobility recovered fastest;
public transit mobility remains lower in most countries
Economic Impact

As of 31 May 2021

Workplace1, public transit2, and retail and recreation3 mobility compared with baseline of January 2020 to February 2020

Feb
20

Germany

May
20

Aug
20

Nov
20

Feb
21

May
21

Feb
20

May
20

Australia

Aug
20

Nov
20

Feb
21

May
21

Italy

Feb
20

Workplace mobility
Retail and recreation

Lockdown easing4
Lockdown started4

Feb
20

May
20

Aug
20

Nov
20

Feb
21

May
21

May
20

Aug
20

Nov
20

Feb
21

May
21

May
20

Aug
20

Nov
20

Feb
21

May
21

South Korea

May
20

Aug
20

Nov
20

Feb
21

May
21

SwedenPublic transit mobility

Feb
20

Feb
20

Japan

May
20

Aug
20

Nov
20

Feb
21

May
21

Feb
20

1. Tracked as changes in visits to workplaces; 2. Tracked as changes in visits to public transport hubs, such as underground, bus and train stations; 3. Tracked as changes for restaurants, cafés, shopping centers, theme parks,
museums, libraries and cinemas; 4. Refers to average lockdown start and easing dates for larger lockdowns; Note: Data taken as weekly average compared with baseline (average of all daily values of respective weeks during
Feb 15 2020–Feb 28 2021); Sources: Google LLC "Google COVID-19 Community Mobility Reports". https://www.google.com/covid19/mobility/ Accessed: 01 Mar 2020; Press search; BCG

19

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USManufacturing PMI recovery globally indicates continued
positive momentum
Economic Impact

As of 01 June 2021

Manufacturing PMI before, during, and after the crisis
China1

Apr

May

1 1

1
Mar

Jan

2

Feb

Dec

Nov

Oct

Sep

July

Aug

Jun

May

1

May

Apr

Feb

Mar

Jan

Dec

Nov

Oct

Sep

July

Jun

May

Apr

-2 0

Japan

1. Lockdown dates are only pertaining to Hubei province; Note: PMI (Purchasing Manager's Index) is a diffusion index that summarizes whether market conditions, as viewed by purchasing managers, are expanding,staying the same, or contracting. 50 is neutral, >50 is considered to be positive sentiment and <50 is considered to be negative sentiment; Sources: Markit South Korea Manufacturing PMI SA; Jibun Bank Japan
Manufacturing PMI SA; China Manufacturing PMI SA; Swedbank Sweden PMI SA; Markit/BME Germany Manufacturing PMI SA; Markit Italy Manufacturing PMI SA; Markit US Manufacturing PMI SA; EIKON

May

Apr

Mar

Jan

Dec

Nov

Oct

-10

-0
.2

-2 -1 -1

Sep

May

Apr

May

Feb

Mar

Jan

Dec

Oct

Nov

Sep

Aug

Jun

-12

Aug

-8

-5 -3
July

-2

4 3
1 3

0

Feb

Neutrallevel = 50
-5

July

Apr

May

-7
-10
-13

15 13 12 14 19 16

Jun

6 9 10
2 4

Mar

Lockdown easing

Mar

Apr

May

Feb

Mar

Jan

Dec

Oct

Nov

Sep

Aug

Jun

July

Apr

-19

Neutrallevel = 50

Lockdown started

2 2

5 5 5 41 3 3 3
-6 -8 -9 -7 -3

Sweden>0

Neutrallevel = 50

-5 -3
May

Mar

12

Aug

7 10 112 3 3 4 2 3 5-10-14 to 0

2 1
1 1 1 1 1

South Korea

Neutrallevel = 50

-29 to -15

220

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June 2021 Version 2.0

Apr

Italy

≤ -30

Neutrallevel = 50

May

Feb

Mar

Jan

Dec

Oct

Nov

Sep

Aug

Jun

July

Apr

May

Mar

Apr

May

Feb

Mar

Jan

Dec

Oct

Nov

Sep

July

Aug

Jun

17 16 14-5
-5
-16 -13

-10
May

Apr

-14

1 2

11
6 8 8 8 7

Apr

0

-2
Mar

Neutrallevel = 50

Mar

11 12
7 7 9 9 9
3
3
3
1

Mar

Neutrallevel = 50

Apr

Germany

USMonthly passenger vehicle sales showpromising upward trends
Economic Impact

As of 01 June 2021

Monthly passenger vehicle1 sales, YOY % change vs. past year

Sweden
26%

Apr

Feb

Jan

Dec

Nov

Oct

Sep

Aug

July

6%

7% 10% 7% 1% 6%

Apr

Feb

Jan

Nov

Oct

29%

Mar

-4%

-6%
Sep

Aug

Jul

Jun

May

Apr

Apr

29%

31%

Apr

Mar

Feb

Jan

Dec

Nov

Oct

Sep

Aug

Jul

Jun

May

Apr

Mar

Feb

Apr

-13%
-15%
-29%
-23% -15%
-45%
Jan

Dec

Nov

21%

0% 7%

11%

9%

-6%
-14% -35%
Oct

Sep

Aug

July

Jun

May

Lockdown easing-7% -20%
-38%
-26%
-50%
Apr

Lockdown started

> 0%

9%

Japan

86%
6%

17%
-2%

Mar

Feb

Jan

Dec

Nov

Oct

Sep

Aug

July

Jun

May

Apr

13% 14%-7% -14% -11%-14%-23% -8%-97% -48%-14% to 0%

47%

Dec

2% 9% 1%-29% to -15%

9%South Korea3
2,646%
461≤ -30%

75%

1. Passenger vehicle sales includes data on, where available, hatchback, MPV, pickup, sedan, SUV, mini trucks, light trucks, and vans; 2. Stimulus policies: Launched subsidies for car purchases in 10 cities, lessened purchase restriction in high tiercities and extended NEV subsidies; 3. South Korea's growth in auto sales from Mar through June 2020 is supported by recent tax cuts for individual consumption goods (e.g., cars), several carmakers (e.g. Audi, VW) launching new models and theincreased appreciation by the Koreans of cars as a safe mode of transport and as a travel alternative for camping during COVID-19, supported by recently passed legislation to allow a variety of different cars to be modified into 'camping cars'
Sources: Marklines; BCG

21

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June 2021 Version 2.0

Italy

Jun

Apr
Apr

Mar

Feb

Jan

Dec

Nov

Oct

Sep

Aug

July

Jun

May

Apr

Feb

Jan

397%
12%
14%
11%
11%
10%
9%
9%
6% 28%
1%-5% -20% -4% -3%-31% -19%
-49%
-32%
-61%

-3% -13%
Dec

Nov

36%

10%

8%

Apr

6%
-14%

Oct

Sep

Aug

Jul

-12% -20%
-26%
Jun

May

Apr

-47% -30%

90%

113%
61%

Mar

6% 1%

China2Mar

GermanyMay

USRetail goods sales (excluding auto and fuel) have grown comparedwith pre-COVID-19 levels in most countries
Economic Impact

As of 01 Jun 2021

Retail goods sales include online and offline sales and comprise food and beverages, apparel, cosmetics andpersonal care, home appliances, general merchandise, building material; do not include auto, fuel, and food services
Mar

Apr

May

June

July

Aug

Sep

Oct

Nov

Dec

Jan
'21

US

1%

-15% -4%

3%

4%

5%

7%

6%

5%

2%

10%

6%

19%

-

UK2

-5% -18% -9%

1%

3%

5%

6%

8%

5%

6%

-4%

-2%

8%

38%

Spain

-13% -29% -18% -5%

-3%

-3%

-3%

-2%

-5%

-1%

-9%

-6%

13% 38%

Sweden

2%

-3%

2%

3%

2%

2%

3%

3%

5%

0%

2%

3%

8%

Belgium

-1%

-8%

5%

7%

1%

14%

5%

8%

-3%

5%

6%

10% 13% 18%

China3-12% -6%

-1%

2%

-2%

-1%

2%

1%

4%

4%

Japan

1%

-2%

9%

7%

7%

-1%

12%

8%

6%

-6%

-29% to -15%

Feb
'21

Mar
'21

Apr
'21

34%
3%

5%

-14% to 0%

7%

34% 18%
4%

9%
> 0%

1. Retail goods sales categorization may be different across countries; seasonally adjusted values taken; country-specific categorization; 2. UK figures includes total retailsales excluding automotive fuels sourced from Office for National Statistics United Kingdom as data is no longer reported in Eurostat after Brexit 3. For China, Jan & Feb 2021
are reported together due to national holidays
Sources: US Census Bureau; PRC National Bureau of Statistics; Eurostat; Office for National Statistics United Kingdom; Ministry of Economy Japan

Retail goods sales haverebounded with YoY growthseen in most countries
US has seen consistentretail sales growth since
mid 2020
China has seen very strong
retail growth in 2021
compared YoY with earlymonths of 2020, when it hadstrict lockdowns
Some European countries
have seen retail sales dips
coinciding with increased
cases and lockdowns
22

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June 2021 Version 2.0

Growth of retail goods sales (excluding auto and fuel)1, YOY % change vs. same month past year

DE-AVERAGED VIEW

Retail store sales in China have rebounded across categories;
apparel sales continue to be impacted in other countries
As of 01 Jun 2021

Economic Impact

Food and beverage stores

Personal care and cosmetics stores
Jan Feb Mar Apr'21 '21 '21 '21
5% 2% 5%-USJan Feb Mar Apr'21 '21 '21 '21
12% 11% 10% 10% 10% 11% 9% 11% 11% -12% -US-1% 4%

UK

7%

UK2

-23% -9% -11% -2% 0% -16% -9% -36% -20% -20% 68%

June Jul Aug Sep Oct Nov Dec

June Jul Aug Sep Oct Nov Dec
4%

4%

4%

4%

7%

4%

4%

5%

5%

7%

-1% -1% -3% -1% 2% -1% 5%
Sweden 1% 0% 2% 3% 2% 2% 2%
Belgium 5% 6% 6% 4% 6% 2% 5%

1%
1%

0% -7% 2%
2% -3% 2%

Spain-4% -2% 1% -1% -1% -2% -2% -7% -4% -2% 14%

Sweden3%

6%

6% -5% 0%

Belgium -4% 2% 2% 2% 9% -2% -3% -3% -1% 0% 7%
21% 9% 22% 16% 20% 32% 9%
41%
43% 18%China1China1

11% 7%

2%

5%

5%

9%

Japan

3%

2%

2%

4%

0% -1% 0%

1%

9%

13%

9%

3%

5%

4%

Spain

0%

4%

9%

2% -1% 0%

Apparel stores3

Japan

3%

1%

1%

2%

3%

0%

1%

0% -3% 2% -6% 8%

2% -7% 3% -1% 1% -1% -5% 2% -2%Home appliance stores4

US

Jan Feb Mar Apr'21 '21 '21 '21-24% -23% -20% -9% -11% -16% -16% -7% -11% 115% -US

Jan Feb Mar Apr'21 '21 '21 '21-20% -6% -4% -7% -5% -10% -16% -3% -4% 36% -UK-35% -24% -16% -14% -13% -32% -15% -47% -53% -11% 207%UK

17% 13% 13% -3% 16% 5% -1% -16% 7% -5% 69%

Spain-29% -24% -24% -23% -23% -34% -22% -36% -35% 111%667%

Spain

7% 10% 11% 9%

Sweden15% 15% 7% 10% 9% 17% 4% 10% 12% 26% 9%June Jul

June Jul Aug Sep Oct Nov Dec

Sweden -22% -22% -18% -14% -14% -25% -30% -26% -20% 21% 17%
Belgium -11% -25% -16% -7% -8% -48% -4% -6% -5% 57% 91%
China1

0% -3% 2%

Japan-6% -19% -18% -24% -4% -8% -5% -18% -17% 13% 64%≤ -30%

6% 10% 5%-29% to -15%

4%-14% to 0%

48%

69% 31%

Aug Sep Oct Nov Dec

7%

6% 10% -7% -5% 93% 357%

Belgium 14% 2% 23% 19% 16% -18% 11%
10% -2% 4% -3% 1% 5% 11%
China1
Japan

-

43%

39% 6%

26% 12% 10% -29% 29% 25% 15% 11% 7% 9% 24%> 0%

1. For China, Jan & Feb 2021 are reported together due to National Holidays, Food & beverages category only includes food & grains; 2. UK data set switched over from Eurostat to
Office for National Statistics following Brexit. 3. Includes clothing accessories, shoes, etc.; 4. Includes audio video & home appliances stores; Note: For US, share in retail store
sales in Q4 2019: F&B ~25%, personal care & cosmetics ~12%, apparel ~6%, home appliances ~3%, general merchandising ~25% and building material & gardening equipment~13%. Sector classification & mix may be different across countries; Sources: US Census Bureau; PRC National Bureau of Statistics; Eurostat; Office for National Statistics United
Kingdom, Ministry of Economy Japan

China’s sales in all
categories have seen
strong rebounds in 2021
(except food & beverage,
which maintains a similar
growth rate to that in 2020)
Retail store sales recovery
driven by F&B across all
countries
Apparel category saw thelargest decline; continued
fluctuations and beginning
recovery across countries
Home appliances sales
have had mixed
development acrosscountries
23

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June 2021 Version 2.0

Retail store sales breakdown by category, YoY % change vs. same month in past year

Stock markets continue to have an optimistic outlook:
19 out of 24 sectors currently above pre-crisis TSR levels

Based on top S&P
Global 1200 companies

As of 01 Jun 2021

Economic Impact
21 Feb 2020–
20 Mar 2020

21 Feb 2020–
31 May 2021

21 Feb 2020

31 May 2021

Semiconductors

-30%

57%

0%

0%

Materials

-32%

39%

5%

4%

Durable Goods

-39%

36%

0%

0%

Tech Hardware

-26%

32%

0%

0%

Retailing

-40%

31%

0%

12%

Media

-36%

31%

0%

0%

Capital Goods

-35%

26%

2%

2%

Auto

-41%

25%

0%

0%

Financials

-35%

22%

0%

0%

Software

-30%

15%

0%

0%

Health Equipment

-31%

15%

0%

0%

Prof. Services

-30%

11%

0%

0%

Hospitality

-44%

9%

8%

15%

Insurance

-39%

8%

0%

0%

Food/Staples Retail

-10%

8%

0%

0%

Household Products

-16%

6%

0%

0%

Banks

-39%

5%

0%

2%

Pharma

-20%

3%

0%

5%

Food & Beverage

-23%

3%

0%

0%

Telecom

-17%

-3%

0%

4%

Real Estate

-39%

-4%

0%

0%

Energy

-52%

-5%

0%

9%

Utilities

-30%

-7%

0%

0%

Transport

-34%

-14%

0%

24%

1. Performance is tracked for two periods, first from 21 February 2020 (before international acceleration of outbreak) to 20 March 2020 (trough of the market) and from 21 February 2020 through 31 May 2021; 2. Implied by 5-year credit
default swap based on median; Note: Based on top S&P Global 1200 companies; sectors are based on GICS definitions; Sources: S&P Capital IQ; BCG ValueScience Center; BCG

24

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June 2021 Version 2.0

Companies with default probability >15%2

TSR1

Source: BCG

The Science Behind
Why People Have
Missed TravelingWith Business Travel
Up in the Air, What's
Next for Airlines?

How the Disruption ofAir, Cruise, and Hotel
Capacity CreatedUnique Opportunities

Travel Distributors
Must Deliver a
Seamless Customer
Experience

Breaking Ground on
a New Era in Lodging

BCG Travel Recovery
Insights Portal

How Travel
Companies Can
Emerge Stronger
from COVID-19

Why Airlines’
Network PlanningMust Be Bionic

Bionic Revenue
Management inTravel and Tourism

25

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June 2021 Version 2.0

Additional perspectives on travel and tourism

Disclaimer

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Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 30 April 2021 Version 2.0

The services and materials provided by Boston Consulting Group (BCG) are subject to BCG's Standard Terms(a copy of which is available upon request) or such other agreement as may have been previously executed by BCG.
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Executive
Perspectives

29