How do unpredictable events like COVID impact market demand over time?

One of its first big commercial blows was Barcelona’s Mobile World Congress, cancelled in the last few weeks as a precaution. It moved on to ITB Berlin last week. It’s affecting other large-scale commercial events, with uncertainty hanging over any gatherings with more than a few hundred expected attendees, along with business and leisure travel in general. And it’s showing no signs of stopping.

We are, of course, talking about the coronavirus (COVID-19)...

Its spread has given rise to the highest rate of cancelled events in the recent history of the travel industry.

Unlike other market-specific demand factors - Brexit, terror concerns in certain hotspots, political unrest or fluctuating exchange rates - the coronavirus, buoyed by official warnings from the WHO, has started to impact on pockets of activity the world over and continues to spread.

What effect is the COVID-19 having on your market? You’ve probably seen a dip; in most cases, the question is how much of an impact it’s having, not whether it’s having one.

As with so much in revenue management, the first step is quantifying demand.

Let’s take a look at some heatmap examples of the large shifts in market demand that we’ve been tracking at a city level as a result of event cancellations.

A heatmap of Berlin's City Demand before & after cancellation of ITB:

ITB Hospitality & Travel Conference 

Berlin, Germany

Event Date: 05 March 2020

Attendees anticipated: 160,000 visitors

Cancellation date: 28 February 2020

Evolving demand for the arrival date of 05 March in the days before and after the event was cancelled 

Baselworld Jewellery & Watch Show

Basel, Switzerland

Event Date: 02 March 2020

Attendees anticipated: 29,000 visitors

Cancellation date: 28 February 2020

Evolving demand for the arrival date of 02 March in the days before and after the event was cancelled 

Geneva International Motor Show

Geneva, Switzerland

Event Date: 05 March 2020

Attendees anticipated: 600,000 visitors

Cancellation date: 28 February 2020

Evolving demand for the arrival date of 05 March in the days before and after the event was cancelled

Game Developers Conference

San Francisco, United States

Event Date: 16 March 2020

Attendees anticipated: 29,000 visitors

Cancellation date: 28 February 2020

Evolving demand for the arrival date of 16 March in the days before and after the event was cancelled 

Cancellations such as these aren’t the full story, however…

Despite ITB Berlin’s cancellation, market demand still looks strong just a few months ahead. Demand in relation to events in the city, such as the DFB-Pokal cup final which is set to take place on May 23rd, has not yet dissipated; suggesting that there is still opportunity in the near term. Even without a specific event, there are indications that Bank Holiday weekend in May is still desirable for visitors in Berlin.

A heatmap of Berlin's City Demand for the DFB-Pokal final on 23 May 2020:

A heatmap of Berlin's City Demand over a Bank Holiday Weekend May 2020:

There is understandable concern in the industry in light of the virus’s spread. However, not all customers are panicking, and neither should you. People are following regulations and showing caution, but are still looking forward to upcoming events, which means right until the point of cancellation there is still demand to be taken advantage of.

More than ever, we’re living through dynamic times.

As such, real-time future data-points are hugely important. Monitoring demand levels, and the entire market’s reaction to such events, is often the only way to adjust strategies successfully while retaining a sense of direction.