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Business

Revenge shopping

DEMAND AND SUPPLY - Boo Chanco - The Philippine Star

All pandemics end eventually. The Economist observed in a recent newsletter that “COVID-19 has started down that path and will gradually become endemic.

“In that state, circulating and mutating from year to year, the coronavirus will remain a threat to the elderly and infirm. But having settled down, it is highly unlikely to kill on the monstrous scale of the past 20 months.”

But, The Economist continued, how the world will learn to live with COVID depends on how governments chart their country’s way back to normal times.

“Though the destination is fixed, the route to endemicity is not… the difference between a well-planned journey and a chaotic one could be measured in millions of lives. The end of the pandemic is therefore a last chance for governments to show they have learned from the mistakes they made at its start.”

But some people can’t wait to get their lives back. JLL, a property market consultancy in the US, is predicting an uptick of in-person shopping in brick and mortar stores this holiday season.

There is a term for it … revenge shopping or when consumers make up for lost time with increased spending… It is expected to increase foot traffic at retailers this holiday season.

US households are supposedly awash with savings after their propensity to spend was curtailed during the pandemic. Rising property values and low mortgage rates have also given households the ability to get some cash in their hands.

McKinsey, a management consultancy, noted that “this is a disruption unlike any other. It was not caused by an economic storm but a health storm...

“The savings rates have more than doubled in the US and the UK…”

With more savings, people have also become more choosy about jobs. Forbes reports what it calls “the great resignation.”

The New York Times reports that “Workers are quitting their jobs at or near the highest levels on record since tracking began in 2001.”

Then there is “revenge travel.” People are so eager to go out into the world after COVID restrictions cooped them up for almost two years…

The Economist noted that “Almost every day over the past two weeks countries across Asia have revealed plans to loosen pandemic-induced restrictions on inbound visitors.

“Restarting tourism will be harder than shutting it down and it seems the countries that are most dependent on holidaymakers’ money are taking the most cautious approach to reopening.”

However, McKinsey doesn’t think global air traffic will return to prior levels until 2024.

International travel in the post-COVID world will remain disrupted, thanks to a jumble of rules in different countries causing confusion and choking tourism.

Governments must do more to coordinate policy. Many travel restrictions should be scrapped for being unreasonable burdens and ineffective.

In the Philippines where travel restrictions vary from LGU to LGU, things seem to be improving. Some LGUs like Boracay and Bohol are doing away with the RT-PCR test as a condition for fully vaccinated domestic tourists to enter. The VaxCertPH certification of DICT is enough.

The quarantine period for balikbayans is down to six days (five plus one day to await test result). Perhaps soon enough, fully vaccinated foreign tourists will be allowed to enter selected destinations.

I am told they are thinking of easing quarantines in top tourist destinations like Cebu. This should help many resorts in Mactan.

Under that proposal, arriving fully vaccinated passengers will no longer be locked up in their rooms and can go around the resort provided 100 percent of the resort staff are fully vaccinated.

Tourism Secretary Berna Romulo Puyat just launched a domestic tourism campaign with the tagline “It’s more fun with you!”

“With health and safety protocols in place, we can look forward to opening more tourism destinations in time for the holidays, and shift recovery into high gear,” Sec. Berna said.

It is just as well that we are moving towards more reasonable, science-based rules that will not cause our economy any more grief. Our economy after all is not among those expected to recover early.

COVID-19 has exposed and exploited the vulnerabil­ities of many countries, from rotten bureaucracies to frayed social safety-nets. Our pandemic response experience is a good example of both.

The Brookings Institution, in an article by Dr. Ronald Mendoza, pointed out that the Philippines’ economic model is more vulnerable to disease outbreaks.

“It is built around the mobility of people, yet tourism, services, and remittances-fed growth are all vulnerable to pandemic-induced lockdowns and consumer confidence decline.

“International travel plunged, tourism came to a grinding halt, and domestic lockdowns and mobility restrictions crippled the retail sector, restaurants, and hospitality industry.”

Brookings also noted how we have misused lockdowns.

“Lockdown is useful if it buys a country time to strengthen health systems and test-trace-treat systems. These are the building blocks of more efficient containment of the disease.

“However, if a country fails to strengthen these systems, then it squanders the time that lockdown affords it. This seems to be the case for the Philippines, which made global headlines for implementing one of the world’s longest lockdowns during the pandemic, yet failed to flatten its COVID-19 curve.”

The delays in our vaccination rollout will also delay recovery. Worse, some LGUs are still complaining they lack vaccines even as the vaccine czar boasted having enough vaccines to do one million inoculations a day.

Stocks of Moderna vaccines purchased by the private sector are expiring at the end of November. DOH has not been quick in issuing guidelines to allow its use for booster shots or to inoculate children.

The pilot program for kids is limited to hospitals. It should be opened up for all. It is a mortal sin to waste those vaccines.

The good news is, I was told that after constant prodding from the private sector, the expiring vaccines will be used starting Nov. 5. And companies who want to swap stocks for later expiry dates will be accommodated.

The pandemic will end one day. We can experience that earlier if we stop messing up our COVID response. Hopefully the next administration will be more professional and effective.

 

 

Boo Chanco’s email address is bchanco@gmail.com Follow him on Twitter @boochanco

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