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Unfulfilled predictions – Unrealised economic forecasts for 2021, Part 1

As the year draws to a close, it is now customary for the experts to hold an assessment. They try to interpret and analyse everything so that they can draw far-reaching conclusions for the future. But somehow, 2021 seems to break with tradition in this respect too. It is as if even the greatest experts are becoming more cautious, because, let’s face it, many of the “predictions” that have been reported almost as fact by economic analysts around the world have not really materialised. In fact, in many cases, there is no correlation between reality and forecasts. Let us look at a few of them!

The angry service

As with any normal crisis, it was clearly predictable that demand in the market would fall and that there would be a fierce battle for the remaining customers. Moreover, the clever economic analysts had already seen and taken for granted that this competitive war would clearly bring prices down, because what else could be done to keep a grip on the ever-decreasing demand if not this. Tourism has been used as a good example, because that is where the biggest fall has occurred. The real business developers warned everyone at the time that, although the current situation is very similar in economic terms to the Great Recession of 2008, no one should think that the same mechanisms will be in place now. They have listened to the economic players, but they have not really gone deep enough into the information, because a lot of people have waited a very long time to repeat themselves. Today, concrete facts show that the experts who “scared” anyone about a fall in the price level were wrong. In fact! While it is not appropriate to write this in a business magazine, there is simply no better word than “impudence”, which is what we see in most markets. Especially in tourism. That hotels or restaurants will lower their prices to meet expectations and will be forced to offer a higher level of service? That is very much not what is happening. We are seeing a drastic increase in the price of services aimed at tourists, and somehow this seems to be leaving customers cold. Even in 2008, there were warning signs that it was not worth thinking about price cuts, because those who cannot afford them cannot afford the services and products that are not part of everyday life. However, those who can continue to do so will be able to afford prices almost regardless. But what many people in these markets have miscalculated is that they think they can do all this with the same or even lower levels of service. It is very rare, even for luxury service businesses, that customers receive at least the same level of service as before the crisis. This is mainly due to the inadequate motivation of employees. After all, business owners and managers feel good about themselves; if they had a reserve, they could continue their business. They just forget that a significant proportion of their employees can no longer say the same for themselves. I have probably never seen so many angry service staff in a tourism services business in my life. This is a phenomenon that has left premium customers puzzled, as, on the one hand, this is not what they had planned or expected, and on the other hand, they are still feeling that they have finally been able to escape the “trap”. But the premium shopper has one bad quality: they remember these things and will spend their money where the service warrants it. And the sell-side is doing quite well for the time being, as customers are largely returning, and are happy to do so, because prices could be increased by up to 25-30%, sometimes even higher, so that the lost volume can almost be made up by the extra margin. It is not even in the minds of many that this period will be crucial for their future business, as it is no longer really noted in the forecasts that it is the people who will be able to spend money, for whom the quality of service is often more important than the objective quality of the product.