Yahoo Finance This is how the pandemic will affect work and leisure
Will the leisure segment come out of the woods and if so, how long will it take?
Credit Suisse’s new study has some interesting insights on how the leisure segment will emerge from the woods in the coming years. To begin with, the report points out that the number of working hours has been consistently dropping over the last 150 years. This drop has, in turn, provided a boost to the leisure segment, which has been on the rise for the last century-and-a-half. The report reads: “An equally important trend is the growing commercialisation of leisure, helped by a growing global middle class and technology-driven cost cuts making leisure more affordable: it is no longer a preserve of the rich (in the past arts were only patronised by religion or the kings). Leisure’s share of consumption is rising.”
It goes on to make other observations too. Such as the fact that the upper-income households have not been as heavily impacted by the pandemic and the series of successive lockdowns. The rise in work-from-home culture has helped saved commute time. This has meant more time to do other tasks such as shopping, healthcare etc through e-commerce, the report says.
While defining leisure as anything that isn’t work, the report predicts that the segment will see a strong rebound in the next five years.
Here are some highlights from the report:
No matter what country you look at, nearly half the day is spent in eating, sleeping and other personal care whereas the other half is split between work, study, and leisure. As such, between 16 and 23 per cent of the day (or 4-5 hours) is spent in leisure activities, the report says. The report makes a distinction between paid work and unpaid work.
While the report doesn’t provide data for India, based on the numbers from other Asia Pacific and European countries, it concludes that men do more paid work whereas women do more unpaid work. As a result, the leisure time availability is higher for men than women in all countries.
One of the reasons why the number of work hours have reduced over the years is increase in productivity. Computers replaced typewriters, emails replaced snail mails, etc. However increase in productivity doesn’t always translate to more leisure hours, the report observes. “When given a choice between more pay and less work, most people choose the former,” it reads. “This may be changing, even if slowly: the French attempt at a four-day work week was not successful, but reflects a broader trend; German unions now provide the option to workers to choose between holidays and pay.”
The report also observes that the hours worked per week have been consistently dropping since 1870 – from 73 hours per week to 26 hours per week in some countries. “The concept of a work week did not exist before the Industrial Revolution; it took a few decades for controls to emerge on the number of hours a worker could work every week: this was formalised only in 1874. Paid holidays were legislated only in 1938 and the 5-day week was formalised post-WWII,” the report reads.
According to the report, the number of employees who work more than 40 hours has come down for most economies for which data is available.
The number of days of vacation have also risen since 1870, with paid vacations introduced in the 1930s and a five-day work week in the 1940s. Notably, this is true largely of developed countries. In India, several organisations continue to work six days a week or alternate five-day weeks.
Life expectancy and retirement age
The report also observes that in India, the life expectancy at 60 – or the average number of years that a person at that age can be expected to live – has gone up from 12 years (in 1955) to 17 years (in 2020).
Similarly average effective retirement age, which had fallen in the late 90s and early 00s has gone up to 68. Additionally the number of years people in India lived post retirement has remained largely unchanged at 10 years over the last decade and a half.
The report also predicts that the share of retired people will largely keep rising in Asia as it has been since the mid-70s.
Insights on leisure
The report observes that the rise of the middle class has led to the commercialisation of leisure. The report observes that until the 19th century, leisure was mostly ‘patronised’ by the ultra-rich, the royalty, or by religion. This changed with the rise of the middle-class.
“Technological innovations have thereafter brought down the unit costs of entertainment and travel, which together account for a large part of commercialised leisure. Just as book printing made reading more affordable and spread literacy in its wake, the railways made long-distance travel cheaper two centuries ago, and the car did so further a hundred years ago. Innovations such as electricity, gramophones, movie cameras and television allowed for predictable and homogenised leisure experiences that brought down the cost of entertainment by allowing the same person to service a large number of users. The resultant lower costs boosted demand,” the report reads.
Interestingly, although not surprisingly, not all forms of leisure have commercial relevance. For example you could be spending time with your family or just exercising in the open during your leisure time. This costs significantly less than, say, going to a movie or playing a video game. And so, the link between the share of time spent on leisure in an economy and its commercialisation appears weak, the report says.
Hotels and rentals contribute to 13 per cent of all the spending on leisure activities in Asia. Chain food services contribute 21 per cent; recreation, entertainment and the arts contribute 26 per cent; sporting goods and sportswear contribute three and seven per cent respectively; video games make up for four per cent of all spends on leisure activities, whereas attractions and experiences make up for seven per cent.
Indians in the top 20 per cent of the income bracket dominated the spending in the segment. The top quintile contributed more than 60 per cent to the segment. More than all the four quintiles below it combined.
How will the pandemic affect tourism?
The report observes that the travel industry benefits a lot from business travel. Some estimates suggest that business travel contributes to more than a fifth of global travel and that hospitality spending could fall by 20 per cent. This could make leisure travel by air more expensive as the implicit subsidy from business travel drops, the report says.
The lockdown-driven fall in leisure spending is expected to reverse
OTT platforms have been one of the biggest beneficiaries of the pandemic-induced lockdown. The report reveals that the number of Netflix subscribers have gone up from under 10 million in 2017 to more than 30 million in 2021 and predicts that the number will double in the next four years alone.
Similarly, the number of air travellers in countries such as China and India are being seen as good indicators of how the world will react when the pandemic recedes. The number of air travellers in India, for instance, rose up by over 30 per cent between September 2020 and December 2020 and remained there for another three months before falling due to the second wave.
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