If history repeats itself, then Australia may well continue to be the lucky country in a post-COVID world. In the years following devasting global events like World War I, the great depression and World War II, the Australian economy, population and industry experienced growth and prosperity – suggesting that while COVID has had a huge impact across the world, Australia may bounce back better than ever.
At IGT’s recent customer forums, we invited Bernard Salt AM – Australia’s foremost demographer – to read the statistical tea leaves and tell us how the demographics and spending habits of the nation may change following the COVID pandemic.
Here’s some key insights:
Firstly, Australia is a very lucky country and sits in the top 14 countries of the world (in GDP) – and may even shift to 13th this year – incredible when you consider there’s only 26m of us. And, historically, whenever Australia has experienced adversity (world wars, depressions etc.) we always bounce back with a renewed ‘joie de vivre’ and get out and enjoy ourselves – and these have been times of enormous innovation and growth. This bodes well for the hospitality industry.
One result of COVID is a phenomenon that Bernard calls the VESPA movement – Virus Escapees Seeking Provincial Australia. We’re all seeing it – particularly in regional house prices! People have taken the opportunity to escape the city. The figure he used shows the number of people shifting from the city to the regions has more than doubled during COVID – there has been no time like this.
This presents enormous opportunity for regional clubs and hotels with an upward shift in local populations and more diverse demographics – people will be looking to meet and connect locally in their community – i.e. their local club and pub!
Additionally, if you throw in the changing age mix of our population at key life stages, he identified the sweet spot of people aged ‘42’ as the largest growth band that would be looking for an entertainment spot such as a club or pub. The figure here shows where the population growth bands are.
Of course, the economy took an enormous hit during 2020 but we are seeing growth like practically no other stage in history as we bounce out of the recession … this bodes well for hospitality too – Aussies love spending on lifestyle and entertainment.
We all know that Working From Home (WFH) has shifted everyone’s expectations. Before the pandemic about 5% of the population worked from home – remember farmers are classified as working from home too! During the lockdowns almost half the population worked from home. Bernard sees this dropping back to around 15% of people being based out of their home going forward. That’s a significant shift of less people commuting into city centres and taking lunch locally.
Bernard’s ‘Fried Egg’ effect for cities like Brisbane, Sydney and Melbourne demonstrates the impact of more people working from home/locally. The large fried egg represents pre-COVID where everyone commuted to the inner areas of the city. Post-COVID he expects we will see smaller ‘eggs’ where people commute shorter distances and shop and eat locally within a 20 minute radius.
In summation, Bernard ended on these four key points which we can all identify with and see their potential impact on the hospitality industry …
- Australia is a first-world nation offering a good quality of life and has come through the pandemic relatively unscathed… Australia will be regarded as a safe haven for migrants, students, visitors and business investors in the 2020s.
- Consumer behaviour has been changed by the pandemic… Australians are more accepting of new technology, more focused on family and the home, more likely to look for services locally… but they will still want to access the best gaming, entertainment and socialising experiences possible.
- Those workers most lightly touched by the pandemic are skilled essential and knowledge workers in health, education, professional services and perhaps in some parts of construction… these workers often work from home or near home and are confident about demand for their services (and income) into the future.
- The hot new demographic market for the early 2020s will be the rise of maturing Millennials pushing into their late 30s and early 40s… they will have kids, some may be home-based workers, they will want a premium gaming and entertainment experience that’s locally accessible.
Interested in a copy of Bernard’s slides? Drop us an email to: email@example.com
Bernard Salt, AM – www.bernard-salt.com.au