Global Talent Update - May 2020

GlobeEurope, Middle East and Africa

Sojern, a company that specializes in collecting and analysing travel data, is focusing on current travel trends imposed by the coronavirus pandemic. Offering a sense of the gravity of the situation, global flight bookings to Europe are down drastically, with Italy seeing almost a 94% year-over-year decline in flight bookings, as reported in ExchangeWire. The UK showed a 63% decline in year-over-year flight bookings, less than other countries in Europe, but Sojern expects to see this downward trend increasing given the government updates and heightened restrictions in the UK.

“Whilst travel bookings are clearly down year-over-year, we are seeing a very early spike in global travellers opting for longer lead times and booking flights in the last 14 days to the UK and Spain for January 2021 with booking levels even above the levels from last year,” reports Sojern.

“We are seeing a similarly high booking level for Spain with a 160% increase in global flight bookings made in the last 14 days for trips to the UK with departure dates in January 2021. Even Italy, although still below average year-over-year levels, is showing an upward trend for January of next year.”

This trend could be a result of some airlines announcing their winter timetables early and also releasing a more flexible cancellation and booking policy increasing consumer confidence in booking trips for a date when they feel that this pandemic could be in the recovery phase, according to Sojern.

Asia-Pacific

Job losses across Asia Pacific could double due to the coronavirus pandemic - and some of these jobs may not come back for a while, S&P Global warned, as reported by CNBC. The services industries are among the first to feel the impact of those lockdowns, but that very sector is also what’s driving job creation in countries like Japan and South Korea, the ratings giant said.

“Jobs are at the core of the current economic crisis,” said S&P’s Asia Pacific Chief Economist Shaun Roache. “Measures designed to limit viral spread are striking at the heart of the engine of job creation across Asia-Pacific- the service sector. Service sector activities often require human-to-human contact while mitigation policies aim at social distancing. The clash of these two is obvious.”

Based on projected reduced growth of about 7.5 percentage points, S&P laid out the impact on job losses among major countries in the region. Among nine major economies in Asia-Pacific, the largest increases in unemployment rates on average were seen in Australia, Hong Kong and New Zealand, according to S&P, which analysed official data from those countries going back to 1980.
Although S&P says that a recession in the Asia Pacific region “is now guaranteed,” according to a report by CNBC, many analysts believe that ”bottled-up consumer demand will ultimately come roaring back.”

Robin Brooks, managing director and chief economist at the Institute of International Finance, told CNBC that “ultimately this isn’t a financial crisis.” He pointed out that “consumption is being turned down very significantly and if the virus abates by the summer then consumption should come back.”

Americas

Although the coronavirus has caused less havoc in Latin America than in Europe and the United States, according to Forbes, if Latin American countries can’t stop the coronavirus it will be almost impossible for travel between North and South America to go back to normal. The greatest uncertainty in North America is what will happen in Mexico.

“Citizens from other countries in the Southern Hemisphere will face a similar problem,” observes the article, “but travel between North America and Latin America is much more frequent than travel between North America and Africa, Australia or New Zealand.” New restrictions on travel in the Americas will likely remain in place.

So far Latin America appears to be faring better than the United States: in the region as a whole, the number of confirmed cases is only 15% that of the U.S., and the number of deaths only 12%. As the article points out, however, Latin America is far behind in testing: “The United States has performed ten times as many tests per million people as Brazil, and thirty times as many as Mexico.”

Some experts, however, are more optimistic, according to the BBC. They point to warmer weather during the southern hemisphere’s summer as preventing the spread, as well as demographics.

“Latin America has a young population that can ride out the virus better - the median age in Brazil, for example, is just under 30; in Colombia, 27.4. Compare that with Italy, the European country worst hit by the coronavirus outbreak, at 44,” observes the BBC. Cross-contamination, too, is less of a concern, according to Prof Manuel Elkin Patarroyo, a Colombian immunology expert because “in Latin America, despite the fact there are large cities like Mexico City and São Paulo, the concentration of people is lower than in Europe so the possibility of transmission is smaller.”