In the current climate, one would be forgiven for wondering what has really changed in the last twelve months. Many returning to work are openly noting their surprise and bemusement that more has not progressed over the twelve months but in fairness, there are still many questions hanging in the air that it is hard to have clarity on how events will unfold.
Given little has changed, one can understand why many are questioning whether there is a need to return to offices as there is still some threat hanging in the air. Numbers in Scotland surged last week after the return of schools. Will the same happen in England?
The facts do seem to be changing constantly. It was only a few months ago, that many economists were forecasting a boom period for 2022 and 2023. However, the last signs from the US indicate a harder climate may be awaiting. The US economy had bounced back very encouragingly but is now showing signs of slowing. Inflation is forecast to hover around 3% for the rest of 2021 and investors are beginning to be concerned about a profits squeeze in 2022.
The likelihood is that it will be an uneven return to strength and this needs to be accepted. It is natural that there will be ups and downs and this will present its challenges.
In a discussion forum last week, it was noted that food inflation is likely to rise to between 6-7% in 2021 and the return to strength in offices will be delayed until early 2022. This will naturally feed through to how the economy recovers.
The issues are deeper than just the pandemic as forecasts do show a return to some strength for events and corporate hospitality in Q4; it is just the return to workplaces which is going to be a harder journey than hoped and this will naturally impact on city centres. The issue is caused partly by the pandemic but more by a desire for new working patterns, new approaches to work patterns, leadership and communication. The majority, it is reported, do not feel they see the change they so hope for. They are asking whether there is any vision of the future and for any changes.
Leaders are being asked why they have not been visible or had a louder voice.
The challenge is to set out how new cultures may appear, how the employee experience may change and what the working week may evolve too? Most assume it will be a 3-day working week in offices and 2 days from home but this is still seemingly a few months away from being witnessed as a reality.
All this will naturally result in an uneven return to strength and changes to natural economics. If the above is true, it will still mean and 40% fall in revenues in day to day hospitality in City Centres. Many are expecting life to return to almost a normality as it was in 2019 but this does seem like a long way from being likely. Many believe that 70% will be back in offices during 2022 but as the number at the moment is 1:5 across the UK that is still a long journey to fulfil.
One can debate and forecast numbers. In truth, none of us yet know how September will play out. However, it is fair to assume an uneven recovery with ups and downs and no few losses still yet to come.
We still have way to go before we are out of the woods.