Executive

Perspectiv
es

What the Evolution of Travel

Means for Business

June 2021
 TRAVEL & TOURISM RECOVERING AFTER DIFFICULT
YEAR
Travel and tourism, including hospitality and leisure, was
one of the areas most severely impacted by COVID-19, as
lockdowns and travel restrictions slowed activity to a trickle

BCG or stopped it altogether. This led to a direct loss of $4.5T in

global GDP, and ripple effects were felt across companies

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June
Executive and industries as organizations struggled to find new ways
to connect with their customers and employees. Now with
Perspectives
IN THIS DOCUMENT COVID-19 vaccinations and cases controlled in some areas,
short- to medium-term demand spikes are expected,
accompanying the longer-term sustained changes needed
WIDE-REACHING
to navigate the newIMPLICATIONS
world. OF CHANGES
IN TRAVEL IMPACT MANY INDUSTRIES
The 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

2021 Version 2.0

changes to their business travel operating model and ways
to make business travel more sustainable.
Sources: WTTC, BCG analysis and case
experience 1
 Summary What the Evolution of Travel Means for
Business
A Travel demand is increasing, but recovery will vary by country and is tied to
vaccine progress
TRAVEL & B
1 TOURISM TRENDS Expect high near-term demand in leisure travel with potential structural
changes in business travel
C

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June
Consumers are calling for increased sustainability as travel industry
responds with initiatives

A Prepare for volatility from consumer spending shifts with demand sensing
IMPLICATIONS FOR
2 ALL COMPANIES Update business travel operating model to account for hybrid and

B remote work Improve business travel sustainability by reducing

C footprint and engaging suppliers

A Changing customer needs require continued investment in safety and

IMPLICATIONS FOR hygiene protocol, demand sensing, and sustainability
3

2021 Version 2.0

TRAVEL B Opportunities exist to establish new cost baselines and implement scenario-
COMPANIES
Source: BCG analysis and case
based agile planning to improve operations
experience
2
 DEVELOPM ENTS IN TRAVEL
AND IM PLICATIONS ACROSS
SECTORS
BCG Impact and trends in travel and
Executive tourism
Implications from travel recovery for all
Perspectives

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

AGENDA

UPDATED ANALYSES AND

IM PACT

Epidemic progression and virus

monitoring Economic and business

Version 11.1.
impact
3
 There have been major disruptions to travel and
tourism

Economic Job Business Touris Airline

impact loss travel m s

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June
-$4.5T 62M 92% 74% 26%
GDP loss in Estimated jobs Of all Decrease in Of all planes
2020 from lost in travel companies global owned by
COVID-19 and tourism continue to international airlines are still
impacts on sector globally suspend most tourist arrivals in storage as of
travel and or all from 2019 to June 2021
tourism international 2020
business travel
as of May 2021

2021 Version 2.0

Sources: WTTC, GBTA, UNWTO, 4
Cirium
1A Travel and tourism trends | Travel demand is increasing,
but recovery will vary by country and is tied to vaccine
progress
Global airline capacity1 (January – April 2021 Countries that have seen better COVID-19 vaccine
down due to lower demand compared with January –
April 2019)
progress are seeing faster travel recovery
Growth in relative ticket volumes, 2021 vs 2019
Vaccine doses

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June
over time (baselined to Jan 31, 2021 as 0%),
administered
destination
400
data per person by
Israel Apr. 4
%
+393%
200 1.2
% 0.9 doses Booking strength
in Israel up almost
100 administer 400% vs. end of
% ed per January
person US
+59% 0.5
0
% EU -
20%
0.2
-
100 Jan 24
%
Feb 7

2021 Version 2.0

Feb 21

1. Carrying capacity based on a measurement of ASKs or available seat kilometers for domestic and international arrivals, comparing 5
2019 and 2021 data Sources: TRIP, ARC/IATA, Our World in Data
Mar 7
1B Travel and tourism trends | Expect high near-term demand in
leisure travel with potential structural changes in business
travel
Leisure travel has near-term pent-up demand Business travel recovery is
as consumers feel safe to resume travel slower with structural changes

Some domestic markets have recovered to near 2019 50%+ of travel managers

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June
levels, especially on weekends and holidays when expect reduced travel
leisure travel is prevalent budgets as they add
greater flexibility for
remote-working roles
% of 2019 domestic airline ticketing
volumes 1
New reasons for travel
as remote and hybrid
US May '21
workers gather for
74% 90 training and affiliation
%
US
Memorial Day Most companies do not
Other consumers
Weekend '21 are eager to travel soon: 56% expect to return to full
ranked leisure travel among their top post- business travel until 2023+
vaccination activities, second only to seeing

2021 Version 2.0

family and friends
1. As of May 2021 6
Sources: BCG COVID-19-related measures survey of 300+ global companies, TRIP, ARC/IATA, GBTA (April 2021),
BCG analysis
1 Travel and tourism trends | Consumers are calling for
increased sustainability as travel industry responds with
C initiatives
Travelers who are looking for The travel and transportation industry is
more green-friendly travel brands: responding with sustainability
initiatives

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June
Most major airlines have committed to net-
zero emissions by 2050 and are exploring
sustainable aviation fuels (SAFs) to comply
with new regulations
68
% ~30% of global rail track systems have been
electrified,
and this is expected to grow to ~40% in the
next 5 years

The cruise industry has already invested

Consumer preferences will have $24B
impacts on both leisure and in sustainable ships, with a target of 40%

2021 Version 2.0

business travel reduction
Sources: SCI Verker Gmbh, American Express Global Travel Trends Report (March 2021), press
in carbon emissions by 2030 7
search, CLIA
2A Implications for all companies | Prepare for volatility
from consumer spending shifts with demand
sensing
While leisure travel decreased, other consumer areas increased during pandemic
Consumer spending shifts

Demand sensing –
Short-term spikes Structural
lessons from
Larger changes Spending will begin to shift back travel
change COVID-safe New e- from some categories as travel The travel sector
resumes and public spaces open

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June
during home commerc faced massive
COVID- renovation e habits volatility swings
19 throughout the
Early Sustained pandemic;
pandemic pet care increasing accuracy
grocery products of demand
panic forecasts is
EXAMPLES Greater lasting impact on important to react
industry
quickly to changes

Companies can prepare for volatility from demand fluctuations by bolstering

Demand sensing

demand-sensing capabilities Example: Car rental

company
Companies must gather and analyze data from a variety of first- and third-party implemented a
sources, such real-time demand-
epidemiological data; this information can provide indicators to support agile forecasting platform1

2021 Version 2.0

planning and boosted
demand- sensing
For example, products and investments (e.g., sales team deployments) can be
adapted based on trend shifts; supply chains and operations can also be optimized
1. Using BCG Lighthouse real-time demand-forecasting platform accuracy by 8
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
to scale up and down rapidly
case experience 30 pp
2B Implications for all companies | Update business travel
operating model to account for hybrid and remote
work
Future of business travel

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

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June
• Duration will shift away from short, repeated trips Companies have
opportunity to
• Rationale includes bringing distributed/remote teams together for rapport and develop hybrid
training (onsite and remote)
• Companies must be more flexible and change business travel operating model
work model:
their
Favor simplicity –
focus on 2-3
Business travel management has shifted, and some funds
Travel operating model

most relevant
42% reallocated may not return as travel resumes models that
support business
of companies in Companies can update their business travel operating model: objectives
May 2021 plan to
Biggest success
resume domestic
business travel in
factor is to test
Train travel Reassess Provide cloud- and learn. Pilot
near future, up
managers to baseline of based, different models

2021 Version 2.0

from 28% in March1
manage new risks business travel integrated and test for 3-6
spending solutions mo. to learn and
1. GBTA survey, (n=457-486 in May and N=253-362 in March) 9
Sources: GBTA survey (March and May 2021), BHI, BCG case experience and
analysis
refine
2C Implications for all companies | Improve business travel
sustainability by reducing footprint and engaging
suppliers
Climate considerations are increasingly important; improving business travel
Business travel sustainability

Sustainability efforts
sustainability can be a key part of a company’s broader sustainability plan – examples:
Technology

50%
company shares
Steps for companies to optimize travel carbon footprint:

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June
sustainability
• Develop a realistic net-zero pledge or emissions initiatives with
of travelers and is
organizations goal
pushing hotels to
placed higher • Invest in online tools that measure or estimate provide better data
priority on emissions and emissions
travel reduction targets
sustainability • Decide how to reach the reduction goal
in past 12 (e.g., reduce trips, optimize meeting locations)
11 large
months
Engaging
1
business travel suppliers (e.g., airlines, hotels, travel corporations
Supplier engagement

management companies) in climate efforts can make a difference partnered with a

global airline to
accelerate
1 2 3 solutions that
decarbonize aviation
Pressure from corporate Emissions transparency is TMCs2 can help push by allowing

2021 Version 2.0

customers can be difficult, but important to green initiatives and partners to pay
effective ask for gather data additional for SAF3
1. Business Travel News (BTN), 2021, Sustainable Business Travel Survey, based on 315 buyer respondents (Feb – Mar, 2021). 2. Travel management companies. 3. 1
Sustainable aviation fuel Sources: Business Travel News, press search, BCG case experience
0
3 Implications for travel companies | Take opportunity to double down on
changes accelerated by COVID-19 and reset traditional approaches
A. CUSTOMERS AND REVENUE B. COST AND
OPERATIONS
Safety and hygiene Demand sensing Sustainability New cost Agile
standard planning
s

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June
Continue upholding Continue to refine Push current status Institutionalize Invest in digital and
COVID-19 safety operational and quo in sustainability lasting cost organization
standards and commercial and make longer- structure changes capabilities that
encourage practices demand- sensing term investments brought on by allow for quick and
such as hygiene, platforms. that lead to step- COVID-19 (e.g., accurate planning
vaccination, etc. Develop change organization and for any possible
Adapt business omnichannel improvements. staffing models, scenario and scaling
offerings accordingly capabilities that Explore new capital assets) and up or down of
support customer innovations and establish new operations as
Lodging company loyaltydistributors are
Travel partnerships
Airline replicates baselines
Many ships in cruise needed
Airline implemented
expanded offerings in increasingly integrating sharkskin industry were scrapped or tool using 1st- and 3rd-
remote locations that online and offline aerodynamics in sold. party data to estimate
facilitated distancing, offerings (e.g., use coating technology to Opportunity to buy staff needs for up to 100

2021 Version 2.0

surpassing even 2019 digital to upsell) boost fuel efficiency of modern ships with day-of scenarios
sales cargo jets better unit costs
Sources: BCG case experience and analysis, press
1
search 1
Mixed travel recovery sentiments across the world as certain regions look to
reopen while others remain controlled; various tactics explored in recovery

As of 27 M ay
2021
May 19, 2021 May 27, 2021 May 26, 2021 May 18, 2021

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June
EU governments agreed to Israel welcomes first tour group "Fortress Australia": Calls to Dubai targets over 5.5 million
allow quarantine-free travel for since the onset of the pandemic open up borders are meeting overseas tourists this year as
vaccinated tourists from select resistance more restrictions are eased
countries
May 4, 2021 May 24, 2021 May 14, 2021 May 21, 2021

G20 nations representing With Tokyo Olympics less than 2 Singapore-Hong Kong travel Virtual tourism can help rebuild

2021 Version 2.0

world's largest economies months away, U.S. warns bubble likely delayed as COVID- travel for a post-pandemic world
support vaccine passports Americans not to travel to Japan 19 restrictions tighten
as cases increase 1
2
 DEVELOPM ENTS IN TRAVEL
AND IM PLICATIONS ACROSS
SECTORS
BCG Impact and trends in travel and

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June
Executive tourism
Implications from travel recovery for all
Perspectives sectors

AGENDA

UPDATED ANALYSES AND

IM PACT

Epidemic progression and virus

monitoring Economic and business

2021 Version 2.0

impact
1
3
Summary dashboard
As of 01 June
2021
To be updated in forthcoming
editions
Epidemic Progression Consumer Business Impact
Global epidemic snapshot Activity Stock market performance
Mobility
Feb Mar Apr
172M 13.6M 3.7M 2B Month end vs. 02 Jan '20 Feb Mar Apr
Mobility6 US -26% -18% -15%
# of # of # of Vaccine S&P500 17% 22% 28%

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June
case active fataliti doses (month
vs. Jan Europe --30% -25% --24% FTSE100 -15% -12% -8%
s cases es administere
Feb Mar Apr d May '20) Japan -17% -12% -12% CHN SSE 14% 12% 12%
Month-on- Americas 0.6x 1.0x 1.2x 0.8x
mont Europe Volatility Index 2.2x 1.6x 1.5x
rowth of 0.7x 1.3x 0.9x 0.4x Domestic air US -37% 18% 189 (S&P500)13
h g
travel tickets %
new Asia3 0.9 1.7 3.3 1.0 International trade
booking7,8 UK - - 181
cases x x x x
(YoY) 78% 47 %
2
China 15% % 138% 157%
Trade US 2% 2% 18%
Economic value14 France 0% 3% 29%
Bank
Impact IMF4 (Apr '21)
s
(YoY)
China 56% 26% 34%
GDP forecasts (YoY%) 6% 19%
2021 0 2 4 6 8 10 12 14 16 20 Retail US
goods Industrial production
18 Europe10 0 12 21
sales9
4.4% fuel, % % %
(excl.YoY)
auto China11 34% 34% 18%
Europ 6.4
& Purchasin US 59 59 61
USe %
g German 61 67 66
3.3
manager’
Japa % y China 51 52 51
Passenger
vehicl US -13% 61% 113 s index15
n 8.4 -19% 36% 90% %
sales
e 12(YoY) Germany (base =
Chin %
50)
a 12.5 China 397% 75% 9% Steel production (YoY)16 5% 16% 24%

2021 Version 2.0

Indi %
a
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 a baseline 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 & offl ine sales and comprise food & beverages, apparel, cosmetics & personal care, home appliances, general merchandise, 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 in Germany, 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 to previous year period; EU trade values between EU and all outside countries 15. PMI
1
(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 4
 Case counts reduced as vaccine rollout continues, especially
in North America and Europe
As of 01 June 2021 Epidemic Progression

Daily new cases (7-day rolling average) Key

observations
1,000,00

172M
0
India drove

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June
massive
800,00 surge in
0 new cases
and recent # of confirmed
600,00 decline in cases
0 Asia

13.6M
400,00
Asia1
0

200,00 South # of active cases

0 America
North
0 America
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Mar Apr May Africa
Europe

3.7M
Feb Jun
Month-
on- month 215% 15% 50% 60% 10% 10% 40% 45% 10% 0% (40%) 20% 60%

2021 Version 2.0

growth of (15)% # of fatalities
new cases 2

1. Includes Oceania (Australia, New Zealand, Papua New Guinea and surrounding island nations of the Pacific ocean); 2. Calculated monthly as average of 1
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 5
Despite progress on vaccination across the world, caution required
as concerning variants spread among immune-naïve population
As of 23 May 2021

Time series view of variant frequency Variants of concern compared with wild
type
4 variants of concern are ~80% of sequenced Relative antibody
10
samples resistance

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June
0 10.0
B.1.351
8 B.1.351 –
x (South
0 6% Africa)
6
0 B.1.1.7 –
4 48% B.1.617
0
(India)
2 P.1/P.2 –
0 7% P.1 (Brazil)
0 B.1.617 –

Nov-
Oct-20
May-

Mar-

May-
Feb-21
Apr-20

Apr-21
Jan-21
17%
Jun-

Aug-
Feb-
Jan-

Mar-

Jul-

B.1.1.7

Dec-
Sep-
20

20

20
20

20

20

20

21

21
20
20
20
Wild (UK)
19 20C 20G 21A/
1.0 type
A 20D 20H/501YV2/ B.1.617
19 B.1.351
x 1.5x
20E
B (EU1) 20I/501YV1/ 2.0x
Likely range

2021 Version 2.0

20 20F B.1.1.7 (Originally
A 20J/501YV3/P.1 detected)
Relative
20
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 transmissibility
/P.2
(some more than others) Sources: JAMA, Nextstrain, Financial Times, Virological; Centers for Disease Control and Prevention; cov-lineages.org, Lancet Infectious 1
B search; Axios variant tracker; Nature
Diseases, press 6
 COVID-19 has broad geographic reach today with
countries at different stages in their fight Non-exhaustive

As of 01 June Epidemic Progression

2021

Continuation Resurgence
Curve was never quite flattened; ongoing battle Curve was flattened but saw one or more
Daily new confirmed cases per million 1 resurgences
1,00 Daily new confirmed cases per million 1

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June
0

500

0
Mar ‘20 Jun Sep Dec ‘20 Mar ‘21 Jun Mar Jun ‘20 Sep ‘20 Dec ‘20 Mar Jun
‘20 ‘20 ‘21 ‘20 Franc Switzerlan German ‘21 ‘21
Argentin Brazil UAE e d y Spain
Crush and contain a Vaccinated
Curve was flattened and case counts continue to remain Curve reduced through vaccination progress
low Daily new confirmed cases per million 1
Daily
1,00 new confirmed cases per million 1
0

500

0
Mar Jun ‘20 Sep ‘20 Dec Mar Jun Mar Jun Sep Dec Mar Jun

2021 Version 2.0

‘20 Australi Singapor ‘20 ‘21 ‘21 ‘20 ‘20 ‘20 UK‘20 Israe ‘21 ‘21
a e Japan South Korea US l
1. Data shown as 7 day rolling average of daily new cases
per million Sources: Our World in Data; BCG
1
7
 Many large economies expected to continue
recovery and reach 2019 GDP levels between 2021
and 2022
As of 01 Jun Economic Impact
2021
GDP forecast levels indexed to 2019 value (Base: 100)
US Europe China Japa India1
122.
6
n 117.
11 7
117.

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June
114.
6 6
1
115.8
112.
11 4
110. 110.
2 4 9
110.
8
110.
10 1
108.
106. 0
8 3 107.
10 104.
103.
4
103. 103. 103.
2 103. 102.
4 102. 1
4 102.
3
8 6 2
101. 0
10 7
100. 99.
399. 99. 100.7 99. 100.2
99.
98. 8
0 8
9 98.2
97.5 7 0 99.3
97. 2
97.
98.
96. 96. 96. 6
9 96.
5
96.
8
1
3
6
4 2 95. 95.
6 2 3
93.
9 4 94. 92.
7 0
2 92.
6 90.
8 4
8 2019 2020 2021 2022 2019 2020 2021 2022 2019 2020 2021 2022 2019 2020 2021 2022 2019 2020 2021 2022
2021
99-104% 96- 107-115% 97-99% 99-108%
forecast
98%
vs. 2019

2021 Version 2.0

2019 GDP levels Forecast IMF (Apr 6, Forecast World Bank (Jan 5, Forecast range from leading
(Index) 2021) 2021) 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; 1
Sources: Bloomberg; World Bank; IMF; BCG 8
Retail and recreation mobility recovered fastest;
public transit mobility remains lower in most
countries
As of 31 May Economic Impact
2021
Workplace1, public transit2, and retail and recreation3 mobility compared with baseline of January 2020 to February
2020
US Germany Australia

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June
Feb Ma Au No Feb Ma Feb Ma Au No Feb Ma Feb Ma Au No Feb Ma
y g v y y g v y y g v y
20 20 20 20 21 21 20 20 20 20 21 21 20 20 20 20 21 21
Italy South
Korea

Feb Ma Au No Feb Ma Feb Ma Au No Feb Ma

y g v y y g v y
20 20 20 20 21 21 20 20 20 20 21 21

Sweden Japa
n

Public transit Lockdown

mobility easing4 Feb Ma Au No Feb Ma Feb Ma Au No Feb Ma
y g v y y g v y

2021 Version 2.0

Lockdown
Workplace mobility 20 20 20 20 21 21 20 20 20 20 21 21
started4
Retail
1. Tracked and 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,
as changes
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
recreation 1
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 9
Manufacturing PMI recovery globally indicates
continued positive momentum
As of 01 June Economic Impact
2021
Manufacturing PMI before, during, and after the crisis
US Germany China1
Neutral Neutral Neutral 2 2 2 2
17 16 14 2 1 1
level = 7 9 9 11 12 level = 6 8 7 11 level = 1 1 1 1 1 1 1
1 3 3 1 2 8 1

Feb reserved. BCG Executive Perspectives updated 10 June

50 7 9 50 50
3 8

Jan
Mar

Nov

Dec
Aug

Sep
0

Oct

Feb
July
Ap
-2

Ma

Jun
-5 -5

y
r
-16 -13
-14 -10

Jan
Oct

Mar
Mar

Nov

Dec
Aug

Mar
Aug

Dec

Mar
Nov

Ma

Sep
Sep

Apr
Oct

Feb
Jan

July
Apr

Ap
Ap

Feb
July
Ma

Ma
Jun
Ma
Jun

y
y

y
r

r
Italy South
Neutral Korea
Neutral
11 12 1 3 3 5 5 4
level = 2 3 3 2 3 5 7 10 level =
50 50 3 5
4
- -5 -3 -2 0
- -6 -8 -9 -7 -
10

Jan
Mar

Nov

Dec
Aug

Sep

Oct
July
y Ap

© 2021 by Boston Consulting Group. All rights

19

Ma

Jun
Oct
Mar
3

Nov

Dec
Aug

Mar
Sep

Jan

Apr
Ap

Feb
July
Ma

Ma
Jun

y
r
y
r
Sweden Japa
Neutral nNeutral 1 3
4 3
19 0
level = 6 9 10 15 13 12 14 level =
2 4
16 -
50 50
≤ -30 -29 to -15 -14 to 0 >0 - - -3 -2 -1 -1 0
-7 -10 -5
2 -8 - 5 .
- 10 2

2021 Version 2.0

Lockdown started Lockdown easing -13 12

Jan
Mar

Nov

Dec
Aug
Jan

Sep
Mar

Nov

Oct

CopyrightFeb
Dec
Aug

Mar

July
Ap
Ma

Sep

Apr
Oct

Feb
July

Ma

yJun
Ap

Ma
Jun

y
r
y
r

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 2
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 0
Monthly passenger vehicle sales
show promising upward trends
As of 01 June Economic Impact
2021
Monthly passenger vehicle1 sales, YOY % change vs. past
year China2
US 113 Germany 90 397
% 36 % %
6 61% 8 10 % 12%
6% % % 75
%

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June
1% - -4% - 9
-12% -20% -14% -3% - - - - 1% 11% 9% 14% 9% 10% 11% 6% %
-47% -30% - 5% 20% 3% 28% %

Oct

Apr
- 31% 19%

Mar
Nov
Aug

Dec
Sep

Jan
Ap

Feb
July
Ma

Jun
-26% 13%
61% 49% -

Aprr

y
Oct
Mar

Mar
Nov
Aug

Dec
Sep

Sep
Apr
Feb

Jan
Oct

Ap

Feb
July
Ap

Jun

Ma
Jan

Jun
De
Ma

No
Au

32
Jul

r
r

g
y

y
%
Italy South Korea3
2,646 47
% %
461 17 21%
29%
2% 9% 13% 9
% 0 7 6
1% - %
% % %
-7% - 14%
-23% -8% 14% - 11 - - -
-97% -48% 14 % 2% 6% 4%

Oct

rApr
Mar
Nov
Aug

Dec

Sep
Sep

Jan
Ap

Feb
Oct
Feb
July

Ap
Ma

Jun
Jun

Jan
De
Ma

No
Au
%

Jul
r

g
y

v
y

c
Sweden Japa
86 n 29% 31%
%
26% 11 7% 10% 7% 1%
6
% % 6%
-6% 9%
- - - -13% -15%
≤ -30% -29% to - -14% to 0% > 0% -38% 7% 20% - -
29%
- -23% -
15% - - 14% 35% 45% 15%

Sep

Feb
50%

Oct
Ap

Jun
26

Jan
Oct

De
Ma
Apr

No
Au

2021 Version 2.0

Mar
Nov
Aug

Dec

Jul
Sep

Jan
Feb
Ap

July

Lockdown started Lockdown easing

Ma

Jun

g
y

c
%
r

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 tier cities 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 the increased appreciation by the Koreans of cars as a safe mode of transport and as a travel alternative for camping during COVID-19, supported by 2
recently passed legislation to allow a variety of different cars to be modified into 'camping cars' Sources: Marklines; BCG 1
Retail goods sales (excluding auto and fuel) have grown
compared with pre-COVID-19 levels in most countries
As of 01 Jun Economic Impact
2021
Growth of retail goods sales (excluding auto and fuel)1, YOY % change vs. same month past
year
Retail goods sales include online and offline sales and comprise food and beverages, apparel,
cosmetics and personal care, home appliances, general merchandise, building material; do not
Retail goods sales have
Jan Feb
M ar
include auto, fuel, Apr M ayservices
and food June July Aug Sep Oct Nov rebounded with YoY
M ar

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June
Dec
Apr '21 growth seen in most
US 1% -15% -4% 3% 4% 5% 7% 6% 5% 2% 10% 6% 19% - countries
'21 US has seen consistent
UK2 -5% -18% -9% 1% 3% 5% 6% 8% 5% 6% -4% -2% 8% 38%
'21
retail sales growth
since mid 2020
Spain -13% -29% -18% -5% -3% -3% -3% -2% -5% -1% -9% -6% 13%
'21 38%
China has seen very strong
Sweden 2% -3% 2% 3% 2% 2% 3% 3% 5% 0% 2% 3% 8% 7% retail growth in 2021
compared YoY with early
Belgium -1% -8% 5% 7% 1% 14% 5% 8% -3% 5% 6% 10% 13% 18% months of 2020, when it
had strict lockdowns
China3 -12% -6% -1% 2% -2% -1% 2% 1% 4% 4% 34% 34% 18%
Some European countries
Japan 1% -6% -2% 9% 7% 7% -1% 12% 8% 6% 3% 5% 4% 9% have seen retail sales
dips coinciding with
increased cases and

2021 Version 2.0

-29% to - -14% to 0% > 0%
15%
1. Retail goods sales categorization may be different across countries; seasonally adjusted values taken; country-specific categorization; 2. UK figures
lockdowns
includes total retail sales 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 2
Sources: US Census Bureau; PRC National Bureau of Statistics; Eurostat; Office for National Statistics United Kingdom; Ministry of Economy Japan
2
DE-AVERAGED
Retail store sales in China have rebounded across
VIEW

categories; apparel sales continue to be impacted in other

countries
As of 01 Jun Economic Impact
2021
Retail store sales breakdown by category, YoY % change vs. same month in past
year
China’s sales in all
Food and beverage stores
June Jul Aug Sep Oct Nov
Ja
Dec
Fe Ma Ap Personal care and cosmetics stores
June Jul Aug Sep Oct Nov Dec
Ja FeMar Ap categories have seen
n b r r n b r
'2 '2 '21 '2 '2 '2 '21 '2 strong rebounds in 2021

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June
1 1 1 1 1 1 (except food &
US 12% 11% 10% 10 10% 11% 9% 11% 11 - - US -1% 4% 4% 5% 4% 4% 5% 5% 2% 5% -
% % 12% beverage, which
UK2 - -9% -11% -2% 0% -16% -9% - -20% - 68%
UK 7% 4% 4% 4% 4% 7% 4% 5% 7% 0% 3% 23% 36% 20% maintains a similar
Spain -1% -1% -3% -1% 2% -1% 5% 1% 0% -7% 2% Spain -4% -2% 1% -1% -1% -2% -2% -7% -4% -2% 14% growth rate to that in
Sweden 1% 0% 2% 3% 2% 2% 2% 1% 2% -3% 2% Sweden 3% 1% 2% 3% 0% 1% 0% -3% 2% -6% 8%
2020)
Retail store sales
Belgium 5% 6% 6% 4% 6% 2% 5% 6% 6% -5% 0% Belgium -4% 2% 2% 2% 9% -2% -3% -3% -1% 0% 7%
China1 11% 7% 2% 5% 5% 9% 9% 13% 9% 9% China1 21% 9% 22% 16% 20% 32% 9% 41% 43% 18%
recovery driven by
Apparel
Japan 3%stores
1% 2%
3 2% 4% 0% -1% 0% 2% -1% 0% Home
Japan 3% 1% 2% stores
appliance -7% 3%4 -1% 1% -1% -5% 2% -2% F&B across all
Ja Fe Ma Ap
countries
Jan Feb Mar Apr
June Jul Aug
Sep
Oct Nov Dec
June Jul Aug Sep Oct Nov Dec
n b r r Apparel category saw
'21 '2 '2 '21 '2
US -24% -23% - -9% -11% -16% - -7% - 115 -
1 1 1
the largest decline;
20% 16% 11% %
- -24% - -14%-13%-32%-15% -47% - -
'21
207 US - -6% -4% -7% -5% -10% - -3% -4% 36 - continued fluctuations
UK
35% 16% 53%
'21 11% % 20% 16% % and beginning
Spain UK 17% 13% 13% -3% 16% 5% -1% - 7% -5% 69%
-
Sweden 29% 24%
- -24%-23%-23%-34%-22% -36% - 111 667
35% %
'21 % 16% recovery across
-22% -22% - -14%-14%-25%-30% -26% - 21%17% Spain 7% 10% 11% 9% 7% 6% 10% -7% -5% 93 357 countries
20% % %
Belgiu 18%
- - -16% -7% -8% -48% -4% -6% -5% 57 91% Sweden 15% 15% 7% 10% 9% 17% 4% 10% 12% 26 9%
m % Home appliances

2021 Version 2.0

11% 25% %
China1 0% -3% 2% 6% 10% 5% 4%
1.Japan
48% 69%31% Belgium 14% 2% 23% 19% 16% -18%11% -
For China, Jan & Feb 2021 are reported together due to National Holidays, Food & beverages category only includes food & grains; 2. UK
-
data set
- -
switched
sales have had
China 1 10% -2% 4% -3% 1% 5% 11% 43% 39 6%
-6% - to -18%-24%
over from Eurostat
19%
stores; Note: For US,
-4% -8%
Office for National -5% following
Statistics -18% -Brexit.
17%
share in retail store sales in Q4 2019:
13%64%
3. Includes clothing accessories, shoes, etc.; 4. Includes audio video & home appliances
F&B ~25%, personal care & cosmetics ~12%, apparel ~6%, home appliances ~3%, general % mixed development 2
≤ -30% -29% to - -14% to > 0%
merchandising ~25% and building material & gardening equipment
15% 0% Japan 26% 12% 10% -29% 29% 25% 15% 11% 7% 9% 24%
~13%. Sector classification & mix may be different across countries; Sources: US Census Bureau; PRC National Bureau of Statistics; Eurostat; Office for
across countries 3
Stock markets continue to have an optimistic outlook: Based on top S&P
19 out of 24 sectors currently above pre-crisis TSR Global 1200 companies

levels
As of 01 Jun Economic
2021 Impact
TSR1 Companies with lt probability >15
%2
defau
21 Feb 2020– 21 Feb 2020–
21 Feb 2020 31 May 2021
20 Mar
-30% 2020 31 May 2021 0% 0%
Semiconductors -32% 57% 5% 4%
Materials -39% 39% 0% 0%

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June
Durable Goods -26% 36% 0% 0%
Tech Hardware -40% 32% 0% 12%
Retailing -36% 31% 0% 0%
Media -35% 31% 2% 2%
Capital Goods -41% 26% 0% 0%
Auto -35% 25% 0% 0%
Financials -30% 22% 0% 0%
Software -31% 15% 0% 0%
Health Equipment -30% 15% 0% 0%
Prof. Services -44% 11% 8% 15%
Hospitality -39% 9% 0% 0%
Insurance -10% 8% 0% 0%
Food/Staples Retail -16% 8% 0% 0%
Household Products -39% 6% 0% 2%
Banks -20% 5% 0% 5%
Pharma -23% 3% 0% 0%
Food & Beverage -17% 3% 0% 4%
Telecom -39% -3% 0% 0%
Real Estate -52% -4% 0% 9%
Energy -30% -5% 0% 0%

2021 Version 2.0

Utilities -34% -7% 0% 24%
Transport -14%

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 2
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
4
Additional perspectives on travel and tourism

The Science Behi With Business How the

nd Why People Travel Up in the A Disruption of Air,
Have Missed ir, What's Next Cruise, and Hotel

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 10 June
Traveling for Airlines? Capacity Created
Unique
Opportunities

Travel Breaking Ground BCG Travel Recov

Distributors on a New Era in ery Insights
Must Deliver a S Lodging Portal
eamless Custom
er Experience

How Travel Why Airlines’ Bionic Revenue

Companies Network Management in
Can Emerge S Planning Must Travel and
tronger from Be Bionic Tourism
COVID-19

2021 Version 2.0

Source: 2
BCG
5
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2021 Version 2.0

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