Thinking about travel demand after COVID-19

Empty streets taken over by cyclists and pedestrians; how long will it last?

We are all looking with interest and concern how the coronavirus pandemic evolves and the measures governments are taking to “flatten the curve” and prevent their health services from being overwhelmed. Our business is transport modelling to support decision making and therefore central to our efforts is forecasting future travel demand. But what can we do when there is so much uncertainty about how the pandemic will evolve and what the impact will be in terms of national and international travel?

I think we need to consider six different influences on the future of mobility and track them to elucidate the likely future evolution of mobility. It is clear to me that the future will be different not only from the past but also what we expected a year ago; it will be a new, unexplored future.

What are these six influences?

First, is the short term measures that authorities are taking to tackle the pandemic; this is mostly enforcing a lockdown and social distancing to minimise the spread of infection plus providing temporary facilities for their health services. This has a direct effect on travel as we have seen in recent weeks, and also on the level of economic activity, in particular for the travel, hospitality and tourism industry. In the UK the decision to extend the lockdown is reviewed every three weeks and there is still not clarity how the quarantine would be relaxed.

Second, it the recession resulting from this lockdown. The contraction in GDP will be deep and its effects will last for a couple of years, despite a rapid recovery at the end of the lockdown. The restaurant meals we did not have are lost forever; I will have my long-delayed haircut as soon as possible but I will then revert to the 8 weeks cycle. On the other hand, litigation is likely to recover quickly in a catch up mode.

Third, the process following the decision to start relaxing the lockdown will affect demand as presumably there will be stages and rules about keeping a degree of social distancing. The possibility of a recurrence of the coronavirus and a return to stronger restrictions cannot be ruled out; this is uncharted territory.

Meantime the Government in most countries has taken measures to support transport companies during this period what amount to a partial nationalisation. Or at least to a strong intervention directing private operators to deliver specified services with public sector support.

Then we finally move into the “new normal” that is unlikely to be like last year’s normal for three main reasons:

One, Government will adjust priorities. In fact, I expect the government will need to intervene more to ensure it is better prepared for the next black swan. This will suggest diverting resources from other areas to Health and probably education whilst at the same time trying to re-start the economy investing in infrastructure and other activities with strong economic and employment multipliers; welcome back again Keynes, all is forgiven. The search for greater resilience in all aspects of life and health will become a driving force in research and investment in a way unforeseen in the recent past. Moreover, governments will find not just a greater acceptance of their intervention for the good of society. This will place greater scrutiny of their planning and actions. But also business will be expected to serve society as well and will no longer be able to claim that they work only for their shareholder’s profits.

Second, companies will also adjust to be better prepared for disruption in the future. Supply chains will shorten accelerating a trend already apparent during 2019 as mini trade skirmish and countries try to reverse some aspects of free-flowing globalisation. They will seek to be better prepared to more distributed working using the tools and practices learnt during the lockdown. The need for international business travel will be more closely scrutinised and sometimes substituted with Zoom and Teams meetings. Some companies will have to adapt their business model, in particular in the automotive industry with complex supply chains. The tourism, travel, and hospitality sectors may experience long-term changes in business and individual travel preferences. Aviation and cruise shipping will need to rethink their approach where relentless growth was expected and planned for. Many other economic activities will need to explore how best to adapt to the new normal from financial systems to consulting, marketing and education.

Finally, we as human beings would have changed some of our priorities and developed better ways of dealing with procuring basic needs of food and services. Ecommerce will continue to thrive and many of us will be able to work remote a few days a month changing travel patterns and reducing congestion and emissions. We will be ready to accept restrictions and measures that were unthinkable in the past, for example higher taxes and road user charges. Concern over the possibility of another pivotal disruption could change how we approach financial security—saving more and spending less. We will consider more carefully how much and in what mode we travel daily and occasional longer distance. Our willingness to share a ride on a small vehicle will be questioned. In the past, it took about two years for public transport to recover from a major disruption; it may take longer now as a degree of social distance may be seen as essential, something not apparent when the risk was terrorism.

The coronavirus pandemic offers a good opportunity to develop and implement transport policies and interventions that might have been considered too radical in the past. Cyclist and pedestrians have recovered the public space and for a short while we would resist its loss; we can get used to almost anything if it happens slowly. This window of opportunity will not last long, perhaps a couple of years. Re thinking transport investment priorities is not just possible but urgent as some resources will inevitably be diverted to health and resilience. Moreover, the assumption of continued growth in travel demand must certainly be reviewed and most likely abandoned.

Somehow I perceive Connected and Autonomous technology as less shiny and less urgent; Mobility as a Service is no longer thought as the silver bullet that will solve all the congestion and emission problems. Our interests have changed, quality of life and interaction with others has become more important.

Forecasting travel demand under these conditions is almost an impossible task. However, we must embrace this uncertainty, refresh our experience with scenario planning and seek to identify interventions that can be adapted to a changing future while offering added resilience to the next disruption.

Policy decisions made during this crisis may result in greater innovation and improvements in productivity, more resilient organisations and better government at all levels. A brighter future for transport, travel and urban life with better policies more quickly implemented may be part of this recovery but this is not automatic or inevitable. It is a matter of choice by governments, companies and individuals and we all have a role in not wasting this opportunity to guide this change to a successful outcome.