There’s a lot of talk about inflation these days; it’s an issue in the headlights at the moment because in the US, markets have started to reflect it returning to more than 2% before too long (you know markets never really think that far ahead).
Revenge tourism will come when people get back to travelling again. When they think of booking a nice hotel, they’ll upgrade to a really nice hotel; instead of eating at a good restaurant, people will eat out at a really good restaurant. People who have survived economically will treat themselves, but not everyone will have survived so there will be fewer hotels and fewer restaurants, and prices will rise.
Costs will increase and as inflation increases, the value of safe assets like long-term bonds will decrease (as inflation gnaws away at the size of the expected future returns). What would that mean for UK charities? More uncertainty, and especially if your reserves are dependent on these long-term assets as is so often the case.
Now is a good time to ask your manager how safe your reserves are if inflation returns: the question is: “for every 1% rise in inflation how many £££s will we lose (all other things being equal)”.
Now is the time when you want to have as much money as possible available to spend supporting people who might only dream of revenge tourism.