Quantum Wealth Summary
- What you need to know: When the Covid pandemic first hit us in 2020, most analysts believed that global tourism would be crippled. The quarantine lockdowns were seen as a death knell for the industry.
- Why it matters: Now, in 2023, the borders are open. The fear has faded away. Tourism has bounced back with surprising strength.
- Here’s the state of play: Two companies in this sector have experienced gains of 30% and 90% this year. What’s driving this positive momentum? Is there more upside to come?
Life is about possibility, as well as probability.
But given a choice between the two — probability is far more important.
Let me give you the perfect example of this.
From 1346 to 1353, somewhere between 75 million to 200 million people died from the Black Death:
- This was a bubonic plague that — eerily enough — may have evolved in China before making the leap to Europe.
- The devastation caused by this epidemic was relentless and terrifying. Like a wildfire, it burned through the continent, with nothing to stop it.
Source: History
You have to remember. In those days, there was no understanding of microbiology. Institutional healthcare was scarce. So the mood was driven by hearsay and rumour:
- Some people thought that the Black Death was spreading because of foul odours and bad air. So they desperately burned aromatic herbs and spices. Trying to purify their homes to ward off the threat.
- Meanwhile, other people believed that the plague was a divine judgment from God. So they turned to self-flagellation. They began whipping themselves, drawing blood. They wanted to achieve moral cleansing through penance.
- Tragically, others blamed the Jewish minority for deliberately poisoning wells and spreading the illness. Antisemitism was already the world’s oldest hatred — and violence against Jews escalated sharply.
Of course, everything that has a beginning has an end. All viruses, no matter how bad, eventually burn themselves out:
- It took seven years for the Black Death to run its course.
- By then, the fatalities were so high that Europe did not recover to its original population level for two centuries.
- The collective trauma was profound — and it would have consequences for the religious, social, and economic fabric of Europe.
Source: ABC News
Now, let’s fast-forward to the modern era. Let’s talk about the pandemic of 2020. You will remember this event well. You were there. You witnessed it first-hand:
- So, what was the possibility of Covid being a catastrophe like the Black Death? Well, at the time, lot of people talked about the situation in terms of absolutes.
- Some sceptics thought the virus was an absolute fraud. So they placed the odds at 0%. Meanwhile, some believers thought the virus was an absolute threat. So they placed the odds at 100%.
- But the truth isn’t binary. It isn’t about absolutes. Rationally speaking, the risk of Covid being another Black Death was never going to be 0% or 100%. It actually existed within a spectrum of probability. Was the risk actually 1%? Or…maybe it was 5%? Or…perhaps it was 10%?
- We can argue about the numbers. But with the gift of hindsight, we know one thing: humanity is far more resilient in the 21st century than it was in the 14th We have better tools to deal with a crisis. This has allowed us to adapt, improvise, and overcome in a way that our ancestors could only dream of.
Source: Statista
So, this is why I’ve been watching travel and tourism with a great deal of interest:
- In 2019, the global market was worth roughly $2.2 trillion.
- Then, in 2020, along came Covid, smashing that figure down to just over $1.3 trillion.
- Roughly $900 billion was lost. No great surprise there. We faced travel restrictions. Quarantine requirements. Tourist numbers plummeted.
- The economic impact on everything was severe. Hotels. Restaurants. Tour guides. Souvenir shops. You name it. The fallout was catastrophic.
- The pessimists feared that tourism might never recover from this blow — which is a similar sentiment to what we saw in the wake of 9/11.
- However, this fear has proven unfounded. As travel restrictions eased up and the borders reopened again, we have seen an upward swing in pent-up demand.
- The final figures for 2023 are not available yet. However, it is estimated that the tourism market has not only bounced back to normal, but it may actually be hitting an all-time high.
Source: New York Post
Of course, people feel cheated by Covid. And they have responded with revenge travel. They are spending big in an attempt to make up for lost time:
- Because of this trend, two companies in the tourism sector have seen their stock prices surge by 30% and 90% this year.
- So, is there still room for these companies to run? What is the upside here? What are the prospects for tourism?
- This is the $2 trillion wealth trend that you need to understand right now…
Your first Quantum Wealth Report is waiting for you:
covering 13 NZX stocks, plus 2 global opportunities:
