This is Bloomberg Business Week Daily, reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus global business finance and tech news as it happens. Bloomberg Business Week Daily with Carol Masser and Tim Steneveek on Bloomberg Radio.
Hi, everyone, Welcome to the weekend edition of Bloomberg Business Week. Earning season is not quite done yet. A lot of consumer facing companies out with results, including Wayfair and Walmart. This past week.
We catch up with Wayfair CFO Kate Gulliver on the supply chain and how consumers are spending.
The world's largest physical retailer reported to This week, Walmart issued a forecast for full year earnings that missed higher expectations, flagging the unpredictable state of trade and labor market conditions.
We go around the retail space with a great analyst and look at how retailers are keeping customers interested and how they're using technology to keep up with demand and compete with Amazon.
Plus, President Trump has called bluff on the era of the good corporate citizen. Leaders of businesses from Hilton to home Depot and more have been largely silent, demuring or hedging when prompted to criticize the President Trump, we talk corporate complicity, and in.
Our second hour pop music sensation Bad Bunny driving people to learn Spanish, we catch up with the CEO of Babbel.
We begin with earnings and a read on the consumer thanks to Wayfair CFO Kate Gulliver, who shared what her company's earnings can tell us about the health of the shopping public.
Maybe let's step back and sort of speak to the quarter we just reported, and I'm happy to shift a guidance. You know, we feel really great about the quarter we just reported. I think it highlighted and capped off a year of incredible momentum for us. We opened up the year flat, we you know, exit of the year at seven percent, revenue growth eight percent, you know, managing for the exit of Germany, and we flowed through to improved
EBITDA grew year over year about sixty percent. Right, So we're seeing both ongoing market share gains and improved profitability. And that story continues with our guide into Q one. We feel really good about the guide. The you know, mid single digits revenue growth and improved to justin Ebata throughout the quarter. So you know, when we look at it, we feel that we produced pretty strong results.
Yeah, I mean you look at the quarter, I mean just at EPs, better than what the street was expecting, just at Ebada, as you said, coming in stronger, net revenue up about seven percent year over year, gross margin, coming in better than the street estimate. There were a lot to do. So maybe we talk a little bit about you know, I am curious. You know, you guys have dealt with the call and so on and so forth.
What are you hearing from the investment community that they're not just so comfortable with Kate.
Yeah, you know, actually, you know, as we talked to investors, I think again they're they're pleased with the momentum that
we see here. You know, obviously we're in a category that has been under pressure, right, so the category itself, we think was downlows digits in the fourth quarter, you know, to your earlier questions sort of around whether in the first quarter, we do think the category has been impacted in the first quarter of this year, you know, likely you know, download single digits again, maybe slightly worse even than Q four. So there's certainly some complexity in the
overall category here. You know, what can we focus on? We can focus on what we can control, and our share gain continues to be a real source of strength. You see us outstripping a category by several points, right, and that's continued, you know, Q three, Q four and then again into the guide in Q one.
And we should point out that investors have been really keen on your stock, I mean, nearly doubling over the past year. Kate, let me just go to what you said. I mean, maybe it is those concerns about some softer active customer trends kind of early on in the first quarter. Do you give us an idea of what you're seeing in any idea or can you tell us if it continues?
It's a great question. So active customers is one of our reported KPIs. It's actually a lagging indicator. Okay, that metric is l active customers. So anyone who'd sort of placed an order within the last twelve months, and as orders grow, and you do see that order volume grew in Q three and in Q four, that sort of
precedes active customer growth. The other thing I do just want to point out there is we did exit in January of last year or German Business, So that took a large chunk of customers or not a large chunk, but a chunk of customers out of that number. And so as you're looking at that active customer number, you know, obviously that came out, so we'll clear that comp you know, we exited that in January of this past year.
You did say the sector has been under pressure, and Carol mentioned some of the peers, but what about the Wayfair consumer. When they're buying something on the platform right now, are they buying it because they need to replace something in their home. Are they buying it because they have extra money to upgrade something. What's the profile of the consumer and in other words, how is the consumer doing.
It's a great question. We're seeing a few trends. So you mentioned some of the sort of luxury peers. Obviously, we have high end brands that do compete with those players, like a paragold or specialty retail brand. The Wayfair brand itself, you know, plays all the way from opening price point to you know, upper end mass, so really spans the full range, and we have seen, you know, a divergence some of that ke shaped economy. I'm sure we've all
been talking about now for a bit. Certainly our paragold brand or specialty retail brands are growing, you know, really north of twenty percent we said in twenty twenty five, so you can see that accelerating beyond you know, the overall core business. And I think that speaks to the strength and that you know, higher net worth consumer. We also do see a bit of a divergence in the types of things that people are buying. When I talk about the category being down low single digits, that's a
category overall. We actually think furniture or bigger ticket items are down more. That tends to actually be where we you know, are more focused and have a bigger part of the business. But you know, we also of course sell decorative accent, seasonal decor. That part of the business seems to have done a bit better from a category perspective overall, So those would be lower ticket items you know, that may feel more comfortable for folks to purchase right now.
Well, and one the other thing I want to ask you and listen, Kate, we're obsessed with this the buy now, pay later, and you can do that on Wayfair too. Are you seeing an uptick in that.
You know, we have a number of options, you know, for various financings and buy now pay laters. We work with a wide range of partners. I do think it's an important offering for the consumer, so you know, to you know, sort of sort of ensure good underwriting for
folks and provide them with a lot of optionality. I would say our penetration there has been lower than other more traditional brick and brick and mortar furniture retailers, So you know, as we grow, we're really trying to get to you know, sort of a more natural place there for the furniture industry overall.
We're speaking with Kate Goliver, CFO of Wayfair, joining us from Boston.
You know, Kate, one of the other things that we've talked with you about is the physical stores, and you have noticed some encouraging early performance from the physical stores when it comes to brand engagement and cross channel lift. As you think about or as you kind of move from proof of concept to a potential expansion, what specific performance thresholds are you kind of focusing on and would justify accelerating the physical store growth.
Yeah, it's a great question. So we look at the economics of the store itself, so purchases that are directly attributable to the store, and the economics of you know, operating that store. So as you think about the overall store, four wall, P and L. But one of the unique things about you know, building stores who already have a well established e commerce brand is you do get to see a benefit in the area for the brand overall.
So the other thing that we look at is, you know what in sort of industry partlance you might call the halo effect, but really sales that are attributable to folks that maybe came into the store and then you know, left and went and bought something, or you know, had an idea about the store being in the area because they've heard more about it and therefore then shopped and or rep platform. And we've seen that continue to hold
in really nicely. We gave a stat in our updated investor presentation today that the first store, which is in Chicago, if you look at the entire state of Illinois versus the rest of the country since the store opened, it's had a ten percent cag or higher than the rest of the country. Wow, And that gives you a sense of you know, the momentum that you can get from the store. It's obviously very crude metric, but it's an
easy way to sort of explain it. So we really look at the combination of the store, P and L and then the other benefits that come along with having the store.
Well, that makes me want to follow, Like what metrics would cause you to maybe remain a little bit more cautious, So like if you open another store and the metrics aren't so you're not seeing that kind of momentum that you're getting in the Chicago store, Wed just just say, Okay, maybe it just depends on the city of the environment, Like there's a lot of specifics that can go into it.
Yeah, you know, I think our focus right now is on learning more about what makes a great store.
Right So, we.
Have one store open. We're planning to open three more in twenty six. We have one opening soon in the Atlanta air another one this summer in Columbus, and then in the fall and Denver. These will be, you know, the Columbus store, for example, seventy thousand square feet versus the you know, other stores are roughly around one hundred and fifty thousand square feets. So we're testing out a
slightly smaller format. We're testing out different types of shopping areas where we put the store, and so we intend to learn and then continue to refine the store model based on those learnings. So let me do you know, we are quite excited about it as a channel.
Hey, let's go from sort of like the old school store retail model to than what you're doing with AI and.
Layers stores old school, So.
They are I mean cutting back with channel.
We like the overall omni channel experience, but how.
Do you layer in personalization with AI? And I'm curious how you do that in a way that actually makes you more competitive in this area.
Yeah, we're we're really excited about what we can do with AI from the customer experience perspective, and we've already started some of that and pilot with that on the site and there's certainly more to come there.
You know.
I think this category is a bit unique in that respect because it's a category that is a highly emotive category. Right, it feels very personal to folks. It's not a commodity category where you're doing sort of standard replenishment. You want to get a better sense and see the actual options out there. The brand is important, you know, our brand is important because you want to ensure the delivery experience
is high quality. So we think that the category itself lends itself to bringing people to our site and engaging them in a unique way. One thing that we can do with AI is help get more personalized for your style preferences. You know, I'm sure if the three of us were to pick an end table, we'd all pick different end tables. What we'd love to do is make sure that when we land on the site, we're serving up to each of us exactly that end table that we want. Generative AI allows us to do that in
a faster, more nimble way. It also allows you to pay around a discovery So if you were to go on the app today into the discovered tab, you'd see a whole images and you can create more yourself if you want that. Are you know Jenny I created that? Then allow you to shop the catalog based on the type of room that you're designing or the aesthetic look that you're looking for. And I think that kind of engagement and interaction is really compelling in this category.
So I know, Kate, if we had asked Tim, like, if we were going you, me and him shopping for pillows, you know he would say, no more pillows. I don't know about your household, but that's what happens in my house anyway.
What originally people have an insatiable demand for pillows, so we will keep telling.
Them, Thank God, thank God.
That's wayfair.
CFO Kate go over coming up around the world of retail with someone who knows it like no other.
You're listening to Bloomberg Business Week. This is Bloomberg.
This is Bloomberg Business Week Daily with Carol Masser and Tim Steneveek on Bloomberg Radio.
We've been focusing a lot on the k shaped economy on Bloomberg BusinessWeek Daily. Retail always gives a great look on this. Delinquency rates, for example, on loans ranging from mortgages to credit cards, rose to four point eight percent of all outstanding US household debt in the fourth quarter. That is the highest level since twenty seventeen, driven by higher defaults among low income and young borrowers.
These data com as US retail sales unexpectedly stalled in December, suggesting consumers provided less firepower for the economy as the year drew to a close. Dana Telsea is founder, CEO, and chief Research officer of Telsey Advisory Group. She joined us to discuss all things retail one caveat. We caught up with her before Walmart reported results more broadly.
Like Tim said, we did kind of want to start a little bit broad with you. I mean, we got US retail sales unexpectedly stalling in December, suggesting consumers provided less firepower for the economy as the year drew to a close. On that print, did your own analysis, Dana, you know you do great channel checks and you have all your own research.
Did it match up with what we saw? We saw a solid holiday season, we've seen four It was weaker after Black Friday to Christmas. It only picked up like the week before Christmas. The lull in the middle was deeper than expected coming out of January to Now. Keep in mind we've had terrible weather, you know, a better from the Northeast than the Midwest. People getting out pretty tough, and it was all about colder weather goods. So it's
up and down. But I don't think anything is taking away from what we call the measured optimism in the consumer space. Whereas when you think about the events this year Winter Olympics, America, two fifty World Cup, all coming up, in tax refunds which are just starting now. Consumer has a lot of firepower to spend, and we're watching carefully the lower end. We just came out with our credit monitor this week, the credit monitor, which shows delinquencies are
still on the rise, bad debt being impacted. You have student loans out there, so it's still upticking, but not at a real accelerated pace. It's something to be mindful of.
What when would you go from being mindful of it to being concerned about it?
If I heard about a slowdown in sales from all the different types of retailers. I mean, I think this year, could it be a discretionary year. We've had legacy companies like Victoria's Secret, like urban outfitters like The Gap do better. Why Because there's newness and product newness and store designs making it very compelling. So I'm watching some of these sales figures to see that are they able to maintain the expectations. What's gone more into the back burner. The
waning impact of tariffs. Tariffs will be an impact for the first quarter but they won't be as big an impact through the year, and the continued focus on newness means companies are putting out newer products you don't have a comparison, so the price is maybe higher than they originally would have been.
I want to go back to the consumer credit picture and delinquencies, because on the same day we got that retail sales report, we got delinquency rates on loans rising to four point eight percent of them all that standing US household debt in the fourth Court, that was the highest level since twenty seventeen. I hear something like that, and that's almost ten years. It makes me be like, whoa wait, is that impressive? I mean, is it impressive?
Like you, how do you make sense that? I think they talked a lot about delinquencies and mortgage payments, particularly the lower income zip codes. Student loan delinquencies, like that's a real factor.
They are real factors. It's very important to watch. That's why let's see what these tax refunds come in, because what will be used for some of the debt paydown that's out there.
But to be fair, like student loans, if you've got student debt, how much of you're going to get in attack refunds is really going to make a debt.
It doesn't make as much a debt. Okay, but a lot of times parents will pay off some of those student loans. So it depends who's doing those payments of the loans.
Okay, what I was thinking about the cost of education.
Yeah, by the time you go to be a million dollars a year, I just have the bots.
Do you a.
Plumber, be a electrician?
I'm just saying, ok.
Hey, I want to talk a little bit about the Olympics that are going on right now and sort of what it means in a world where media is so fraction and you don't have the same appointment viewing that we had the same idea of, you know, the big companies getting in front of everyone. We had Nike CEO on last week talking about a return to ACG and making a big push at the Olympics. How do you watch an event like the Olympics when it comes to retail.
I think when you think about retail and who what brands are involved in the Olympics, I mean Ralph Lauren big time.
You love it. You talk about Ralph Lauren a lot.
Yeah, Well, you know why full price. If you look at the average unit retail selling prices, it's going up.
You have a.
Smaller brand who is doing good things with Olympics. This is their second Olympics they've been involved with. Figgs is outfitting the USA team, USA Medical Team, and that's something that they're becoming known for. I think there is awareness that comes from being part of the Olympics. I think people are watching the Olympics, even though some of the
different time zones Winter Olympics. Whether it's figure skating, whether it's the loge, you name it there and there's a lot of good USA athletes that have done a really good job.
Does it still move product, Yes.
It moves and people want to be a part of it. Even just walk by store windows and you'll see product out there for the Olympics.
So against all of this, you know, the Sachs bankruptcy, I know it was expected. Eddie Bauer been around for a long time. I feel like it's been twisting in the winds for a while. Store closing is of all Birds. I mean I found my pair of All Birds. I haven't been wearing them much, but I.
Mean Francesca is another one.
Significant or it's just the cyclical nature.
Cickleical wave. When you think about what others are doing out there, more stores are opening their own brands. You have companies like Aritzia, who's gaining share only seventy two stores in the United States. So if old doesn't reinvent, yeah, they're going away. And that's why I mentioned before, look at Legacy that's reinventing urban outfit is Victoria's secret in the gap?
What No, it's like it's fascinating to see because I agree with you that things are just going to change, right, it doesn't mean when we see it closing, it's going to be the end of a reg Well.
The other thing talking about the retail real estate landlords, Simon Property, largest small developer in the country, just put out their results last week and you can hear from all the other landlords out there. There is more demand for space than supply. So even with the fifty seven or so sacks off fifth closings, the eight or nine full line closings, there's demand for this space.
Is it high end though, that's always demand when it comes to malls or not.
Necessarily because you take a look at things like look at the off pricers the TJ Max Ross stores Burlington. They're each opening one hundred stores a year. Restaurants are opening new stores. Look at the dollar stores, the Dollar Generals, Dollar Trees, they're.
Also We just did a story about how they're opening increasingly in wealthier areas and because the wealthier or higher income individuals are shopping at these stores.
People like treasure hunts and that's what this gives them.
Okay, we're going all over. I thought you.
I think you're going to go to the Ultimate treasure Hunt, No, which you know I love, But no, we're.
Not doing that yet.
You mentioned Gap, so I want to get back to GAP, and I'm now hearing from like truly from influencers that got you. I think you came in and told us.
The Gap is back.
It's cool.
What has Gap done and been able to do in recent years to sort of like you know, it'll never I don't never say never, but the nineties for Gap were unbelievable.
So now it's the parents and the kids they attracted and the reason why how brands are getting recognized today. Look at how viral things can go with influencers, brand ambassadors. You look at Instagram, the regular person is now your new celebrity who you want to look like them? What GAP's done. They're creative director of Zach Posen, partnered with Richard Dixon, the CFO. They blended product and marketing and wanted to give them awareness. They did that with whether
it's K pop music stars. All of a sudden, you're doing that with different brands out there that they're making special collections for Gap, and they're also updating the stores. Check out the store on twenty first and fifth Avenue which has the new look Gap. It doesn't look like the old look Gap.
So where's retail going? Like you know, I always think it's kind of wild you go into a Zara and you can check out yourself and like, you know, and part of me kind of likes that. You know, I can just do it. But where is retail going? In terms of trends, in terms of technology, in terms of the experience.
I think, overall, where retail is going, it's where you want it to go. I think the personalized nature of retail because of the data that companies have about your preferences. I think the AI learnings that are being put in place as to when you shop, what price, you shop, what style you shop, and I think the marketing appeal of what's on Instagram, what's your favorites and what is celebrity's favorites or who the new celebrities are they become
your favorites. I think it's moving faster than ever. It's made the supply chain of retailers become more embedded in being able to chase and I think overall you look at old brands becoming new again. Walk across the street to Bloomingdale's. There's more new brands and they've had in years.
I was just talking about there ago with a friend of mine who's just like we talked about the transformation of Woomingdale's and against Sacks, which is obviously struggling. One thing I want to ask you Amazon, like I have noticed in stories and different things how aggressive they are in terms of fashion. Is that becoming a big deal for them?
Not as big a deal yet there's still essentials, But what you are seeing is brands want their own Amazon shops on Amazon. Basically, what brands want today is they want where is the customer so they can interact.
Even though Amazon might copy like what's popular. I mean, they have so much data on what's where people are buying.
Why do people buy Levi's jeans or buy Calvin Klein jeans or wherever people want the brand and the fit, so they'll always be private label brands provide the halo.
Can we talk big picture a little bit with like a company like Lulu Lemon, for example, going through CEO transition. You have Chip Wilson out there saying, you know you need to I have good ideas for this company.
You have some product failure.
Is that our Bloomberg News team has reported on with this idea of some of the leggings being see through.
Is that brand on the outs?
The brand? Obviously, if you're not gonna have a product that people want, that's a problem. But overall, you can't say it's on the outs because look at the amount of volume that it does with over ten billion dollars in sales. You look at the other act of where brands and they're not doing nearly that volume. And there's work that needs to be done to reinvent. I always call it to be at the top of a retail
roller coaster. You need to reinvent, re merchandise from new juvenate time for Lulu to do that and I was just out there recently. New product is coming for this spring. Let's see how it does.
So what about Okay? So Walmart's the big focus this week in terms of earnings. Next week we get Home Depot TJX. Week after we get Target Costco, Macy's, and a whole host of others. Throughout the next couple of weeks. Here TJX again, like I know this time, here we go.
They should be they like the treasure, Hu, what did I do? They should be a barn burner. The other thing that's new for them, they're increasing their spend on market and as they've been recasing their marketing spend, they're seeing more traffic in the stores. So look what we talked about with gap marketing and product. Look what you got with TJ going on. No one would have ever thought that marketing would be as big a deal for them. It's turning into revenues. And let's not forget the other
thing TJ has. They have home goods. Home goods is doing amazing. They have the most diversification of product assortment. I think twenty twenty six looks to be a very good year for TJ.
It's so interesting though they don't really have an online presence. No, it's like just fascinating that they really don't because they've got.
To go to the store.
You have to go to this store.
That's that part of because you can't really like find out what right, you know, you can't do.
The treasure hunt.
They love it. Yeah, and your very loyal customers will be there on Tuesdays and Fridays. They know when the new merchandise comes in. And frankly, having off price only gives iconic heritage to the full price merchandise because you know you're getting a deal on some of these brands. And look at the brands TJ has, they're better late.
That was Dana Telsey, under CEO and chief Research Officer of Telsey Advisory Group for the full conversation, because we did talk everything from Amazon and Bloomingdale's to Nike, TJX, Carrol's favorite Walmart, and more. Check out our podcast feed.
What's not the love?
He love it?
I do.
It's all about the hunt.
It's old school now, you know, you don't really find those deals online.
I know, it's just kind of fun so way.
It's kind of a they talk about retail therapy.
I'm just gonna say.
All right, still add on Bloomberg Business Week, how executives have worked to stay out of the fray a public political commentary.
This is Bloomberg.
This is Bloomberg Business Week Daily with Carol Masser and Tim Stenovek on Bloomberg Radio.
Once President Trump was inaugurated in twenty twenty five, it became clear of that corporations would have to please not just their shareholders but also his administration lest they be targeted for lawsuits or regulatory reprisals, or by the rage of the maga movement at large.
Just think back to that inauguration and who was there from the business world. As Bloomberg Businessweeks of Animal writes, quote, the Trump administration's actions on a whole host of issues, but especially it's brutal treatment of suspected immigrants have the general public looking for prominent people and institutions to use their power or influence like they did just a few years ago.
She adds, this time, though, the country has been met with near total silence and has been left to speculate about why we got more from Amanda and the era of the good corporate citizen.
If we think back to just a few years ago, the Pride Floweds, diversity and training initiatives, the ESG stuff, investing, hiring. That was kind of a blip. I learned from your story in the history of the role of a corporation in life, that's not really what corporations have done in American.
History, Right.
It's easy to have like a bit of recency bias about how corporations act relative to society. But when you look at sort of like the long sweep of corporate history, and I talked to an economic historian about this for
for the column. You know, companies generally try to advance their own interests, which, like you know, it sounds obvious to say, but it can be hard to remember that because companies have gotten have have worked to have a louder, louder and louder voice in culture, in politics, in like all these areas of our lives that are not like so centrally focused on their own businesses, whatever that business
might be, depending on the company. So, you know, before relatively recently, companies just sort of uh sought to stay out of politics in general because it was bad for business, but to quietly, privately sort of advance their own interests politically in in you know, through lobbying and all the ways that we're used to.
So it's kind of like, you know, it's funny, I think your executives when you think about the guilded age, right, and the robber Barons and so on and so forth, and I think we have this romantic notion of the company town and the executives taking care of everybody. And I'm sure there was the case in some places, but I think maybe we are being a little bit naive about how it used.
To be or no.
Well, the robber Barons are actually an interesting case because this is where a lot of these sort of battles were worked out. Because during the time of the robber Barons you also had the rise of the labor movement. You had really active, really powerful, really militant unions in
the United States. So the robber barons not only you know, adopted the forty hour work week and things like that in order to in response to fight from labor, but they also did things like established libraries and museums and do all of these, you know, get into the creation of the public good in order to sort of burnish their reputations because there was like an active organized counterpart that was trying to reveal them to be something other than,
you know, entirely pro social. So they did this thing because all of those things because of public outcry.
Well, it's interesting because I think, you know, some folks would say some of these billionaires and successful you know executives, they certainly donate, they do philanthrop you know philanthropy, and they're doing good things for society. I think though, and I want to get into your story, and we started talking before we even went on air. It's just this idea of go to Minneapolis and what is it that finally gets executives to kind of band together. Is it
the first death or shooting by ice agents? Is it the second one? Is it the third one. It's just like, what's the bar for making people react? And even when the reactions happen, it's maybe not as as strong as we think.
It should be.
Right, Historically, we see a pretty high bar for companies to weigh in on politics. Like one of the classic examples is that during World War Two, American companies were pretty happy to do business with both sides of the war until Pearl Harbor, and then it was our interests or with the allies, and then it was you know, all hands on deck for the American side of the war, because there was an American side of the war at
that point. And you also saw this during the Civil Rights movement that companies sort of stayed quiet on this until TV coverage of police brutality in the South was so horrific and the country was so horrified that they couldn't sit on the sidelines anymore. So you have that
sort of happening again now. But people in corporate roles of corporate influence are even more shy than they were I think in those eras to weigh in on either side, because we had two videotaped killings that you know, everybody in the country probably saw part of at least and only then did we get like a very tepid statement from the Minnesota Chamber of Commerce with sixty local companies
signing on to it. We didn't have, like we haven't had much national conversation from people of enormous influence in the business about any of those Like you.
Think about Davos, right, everybody was gathered there like there's a place, but I don't know that there was like things that.
Came out not about this, No, not at all. You know, you mentioned you talk about World War Two, the civil rights movement. You also write about apartheid and what happened with the jailing of Nelson Mandela in South Africa. After all of those historical events, you have something in the US in twenty ten happened Citizens United versus the.
Federal Election Commission.
Talk about what that does in that Supreme Court case does to change the role of a corporation as a citizen.
Right, So what we see both historically and right now is corporation sort of trying to, you know, wiggle out of this mess by saying, we're not political, we don't have a role in politics. We are here to serve, you know, our customers, to run our business profitably for
our shareholders, and that is that is it. But in twenty ten you have the Citizens United decision, and this is this was like the sort of culmination of a genuine forty year process in which, you know, corporate America decided they wanted a more active role in democracy, they wanted a more active role in politics. This started in nineteen seventy one with the Powell Memo, and the author of that memo became a Supreme Court justice just a
few years later. So you have this process of the sort of like pro business you know, arguments being put into academia, into the intelligentsia, and pro business judges being put on courts. And that leads to this decision where it is now pretty easy for corporations to fund in a pretty limitless way political candidates. So corporations have a really loud voice in our politics, whether or not we always realize it, and so, which I think makes it extra notable that they're being quiet right now.
So I love the title. So President Trump is called bluff on the era of good corporate citizen. The President has exposed an ugly truth about corporations. They're no longer even pretending to be good citizens. So it's an important point, Like it's like peelback or you know, pull back the
curtain right and right of not being political. Yet there is so much money in politics, and we often talk about this that who's really represented when you go to Washington Is it the corporations who have very very deep pockets and have this ability to certainly get the attention of lawmakers. One of the other things I want to bring up, though, is something I think about a lot. Is the fiduciary responsibility though of a leader to not get in the crosshairs.
I was thinking of your comments about this as soon as you know, when Amanda was talking earlier, because you said, as Carol often alludes to, is there is there any upside to actually weighing in here as a CEO?
Right?
Right, You've got this to protect your company and do every take actions that are in the best interests in protecting.
Yourself and like doing what somebody thinks is quote the right thing. Right is not a metric that Wall Street judges the performance of a company on.
Right.
Yeah, I think that right now you have a lot of executives looking at the situation both political and sort of social in the country and going do we have more of a Do I, as a person even have more of a responsibility to my company's shareholders? Or do I have more of a responsibility to society as someone with influence?
Right?
And you know, I think one thing that is different about now than about twenty twenty is that the Trump administration is willing to use the levers of power in order to cajole or punish businesses that do or do not do things that the administration prefers. I think some you know, some executives are probably just straightforward Trump supporters, and they don't speak out because they like the administration's policies. Some probably don't like the administration's policies and don't speak
out because they're afraid of reprisal. And if you know, the government acts in such a way that it harms their company, then like they probably haven't done their job as they understand it, according to their content, because they're you know, ultimate responsibility in their role is to their shareholders. So if they're doing things that they know could get them punished, then I think that that is the uh is the particular calculus that a lot of executives are.
Doing right now.
You know, I'm just thinking of someone's listening. We're running out of time, but it's like, oh, you know, I can just see the emails or whether we're being so and so forth. But it's why is this before we wrap up forty seconds important to point out? And is it that companies spend a lot of money in lobbying? Like what is what is your big takeaway? You think?
You well, I think that it's important to understand companies as institutions of power and influence in American society. Business journalism is interesting and is worthwhile because these companies are important in the country, and discussing them like they're important means being serious about, like the types of influence they wield, even if it's political influence.
That's Amanda Ball, senior reporter for Bloomberg business Week.
I have to say, Tim, you know, and we talked about this with Amanda. I think because we've we've had guests on, we've had leaders on, we've had consulting firms that advise, you know, C suite leadership about why everybody's so quiet, And I think it largely has to do with nobody wants to be on the president's radar, right and all of a sudden come up in a social media post or a comment out of the Oval office.
And I kind of get it. If you're a publicly held company, you do have a fiduciary responsibility to think about what's best for your company, what's best for investors. But it still feels a little uncomfortable.
You know, I'm going to out myself as you know, watching some other shows on the on the television, but it reminds me of an interview that I saw Chris Christie give last week maybe or the week before. He was on the Bill Maher show on each and he talked about other Republican politicians because Chris Christie has been outspoken about President Trump, and Chris Christy's not in office right now, former governor of New Jersey.
You're a former governor.
But he said that privately he hears from Republicans in the green room when he goes on TV, and he says they say stuff to him that is very different than what they go and say publicly.
All right, folks, That wraps up the first hour of the weekend edition of Bloomberg Business Week from Bloomberg Radio. Coming up in our next hour, Bad Bunnies halftime show at the Super Bowl translating into business for one company that might actually surprise you.
Also, from a Ritz Carlton Reserve in Saudi Arabia to the world's first and only five star crews, We've got the Forbes Travel Guide twenty twenty six star Award.
Also Monster jam Disney on ice Hands, so much more, and so we get a good read into how families are actually spending their free time.
And maybe their discretionary income.
Yes, that's a good point.
It's Bloomberg BusinessWeek. That's Carol Masser. I'm Tim Stanevex.
Stay with us.
Today's top stories and global business headlines are coming up right now.
This is Bloomberg Business Week Daily, reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus global business, finance and tech news as it happens. Bloomberg Business Week Daily with Carol Masser and Tim Steneveek on Bloomberg Radio.
Plenty ahead our second hour of the weekend edition of Bloomberg Business Week, including a look at online education, how Coursera and Babel are making the grade when it comes to customers and expansion.
Plus the family owned company behind the Ringling Brothers and Barnum and Bailey, Monster jam, Disney on ice, and how families are spending and using discretionary funds and discretionary time.
I gotta tell you, I got a little nephew. It's actually my niece's son, so I don't know what you call grand nephew, but really into those monster jams, the monster trucks and stuff, and has gone with my brother grandfather.
How do they get you what earplugs? I know, selling the ear plugs at the because it's so loud.
It sounds like someone who's been there.
Yeah, didn't bring air plugs, but we bought some. Also some of the world's finest hotels and the only five star crews. We talked to the woman behind standards and ratings for the Forbes Travel Guide first up.
This hour.
Bad Bunny super Bowl halftime performance not only turned heads for the music, dancing in costumes, but also for pushing people to learn Spanish. We got up with Julie Hansen, chief revenue Officer in US CEO of Babbel, on the surge her company saw after the halftime show.
Normally we have about sixty two percent of our daily sign ups are people learning Spanish. During the Super Bowl almost eighty five percent during that halftime show. Overall sign ups were up just about four x, downloads up three x. Gotch and you know it actually is state sustaining. Excuse me, so like Spanish remains by far, the is over it, like seventy eight percent sign ups still, so it's really having a phenomenal effect.
Maybe online we knew it would be big. We had no idea it'd be like this.
In the past, have have big cultural events sparked sign ups such as this or is this unprecedented in the history of.
Babel, Yes, but nothing quite like this, especially in the US, you know, just so instantaneous and so significant.
What's the staying power though?
I mean, we all know what it's like to have New Year's resolutions and say I'm going to do this, I'm going to learn this new language, and then you kind of fall off a cliff after a few weeks.
For sure we will see the thing.
I like our odds though, because two factors together here.
One, just the growth of Spanish language.
In music and culture is really sustained and also again significant, so that's kind of creating this ongoing interest in the topic.
And Two the early year.
Cohort I mean January in particular, but we're almost in January.
That is by far the strongest cohort.
There is something about that beginning of the year New Year's resolution knew you this is the best most engaged group of users that we sign up all year, like twenty percent more.
Engagement than in other months. So if they can.
Keep that February intensity, the January intensity and the February you know interest from bad Bunny.
It's a pretty good combination.
Yeah, how do you engauge? Like, is there a way when somebody signs up how or is it just we'll see how long they stick with it?
We I mean, the proof is in that pudding for sure.
But we do see when they sign up, I mean when people tell us what their motivation is, and that also they'll tell us how much they think they're willing to how much time they're willing to invest. And that's an important topic to us because we're, you know, the point of Babel is we want to actually teach the language, so we really try to respect people's time and we want the time with Babbel to be time well spent,
so we pay attention to that particular metric. But interestingly, in January we saw that travel as was the number one motivation by far. Forty three percent of our January sign up cited travel Is there a reason?
And that's up like seventeen percent year over year.
Oh, what language is in particular.
Spanish and English and you know following that is French, Italian, German.
We teach fourteen languages, but those are your top five, top four?
You know, it's yeah, it's kind of fascinating. Does it also just say to you that more consumers are travel like I'm just crying. You know, we're always trying to figure out what cannsumers are up to in an economy where not everybody benefits equally. Is there a read for you on the US consumer based on you know that they want to learn more languages because they're traveling more or I'm just curious, what are you seeing?
Are we just cold and we want to go somewhere war? Okay, give it this winter.
On the US side, we still see the travel is a strong motivator, but actually for the US side it can be even the stronger motivator to connect with friends and family. And again, as Spanish grows in the country, that becomes even a more important impact. But it is interesting to see the worldwide surge and travel interest that we're seeing in our data. I'm not sure I knew that was coming, because travel has been on the upswing for several years now.
Yeah, well you said you didn't necessarily know if that was coming. A lot of investors seemed like they didn't know that the Ai Revolution was coming as quickly as it has. T Mobile launched real time AI services on its wireless nowork, including live translation during phone calls for over fifty languages. Are we entering a world where technology will allow us to just speak our own languages and
we will not need to learn other languages? I know that's a crazy thing for me to ask, but like, this is the world we live in.
Well, we agree that, I mean, AI translation is real.
It's powerful, it's very useful, but it only solves kind of immediate communication needs. And by the way, it does so with a lag, which is not the most fluid way to connect to someone or converse. So we think that an LM can translate any conversation, but it can't give you the joy of understanding a joke in another language or the feeling of truly belonging in another culture.
Translation solves the moment learning transforms the person. So we think that, you know, learning a language is here to stay as long as people have languages.
That was Julie Hansen, revenue officer and us CEO of Babbel. Languages are just one aspect of the online learning ecosystem. There's also the software used by colleges and hubs for testing practical and professional educational preparedness.
Two of those platforms, Coursera and You to Me, announced plans for an all stock merger at the end of twenty twenty five. Now they're working on integrating the two companies together. We got up with Greg Hart, president and CEO of Coursera in San Francisco.
Greg, I want to start with the merger. Carol mentioned it in December, an all stock merger between Coursera and you to Me. What is the status of that right now? We understand it's going to close in the second part of the year. The integration, how does it go, What does it mean in terms of the customer and user experience? And who's the boss?
Thank you Tim for the question.
So we are going through the regulatory approval process right now. Nothing to share on that front, but we're moving through the paces and then we'll hope to move through that and then go through shareholder approval. In terms of who's the boss, first of all, the customer is always the boss. In terms of the actual governance of the company, I will be the CEO of the combined company, and we are excited about that combination because of the opportunity to
bring together two businesses that are really quite complementary. You to me, the companies are roughly the same size in revenue, So the combined revenue of the companies would be about one point five billion dollars for twenty twenty five with about ten percent adjusted ebitdam margin's free synergies. We also announced at signing that we would deliver one hundred and fifteen million dollars of Synergy's post clothes within the first two years, and so a nice improvement in the operating
margin that we have as a combined company. We are focused as we go through the planning process on exactly
what that integrated company and platform will look like. So how do we think about pricing and packaging and promotions, of course, how do we think about the leadership team, and then how do we bring the companies together to really drive not only you know, better margins through the synergies, but also really over time, drive much higher revenue growth and do a better job of addressing the massive market opportunity in front of the companies.
Greg there there have been many examples of mergers that have been announced that haven't actually gone through. For a whole multitude of reasons, some of them a regulatory some of them have involved other factors. What happens if this doesn't go through.
Well, I'm very confident that it will. I mean, we operate in the education space, which is a massive space, you know, two trillion plus dollars that encompasses physical education so day through twelve universities, vocational schools. It encompasses the online sector that we happen to be a part of, and you to me also is a part of. And then of course it encompasses all the other ways that people learn today and increasingly that is through things like
LLLM or YouTube or TikTok. We believe we have a very differentiated offering, but we are a very very small player within that massive space, and we believe that the combination actually delivers more value to every one of our constituents,
to our learners. They'll get access to more content, not only the three hundred and seventy five different university and industry partners that CORSA has, but the eighty five thousand plus subject matter experts that you to Mese content creator community has, and so it'll bring more choice, more learning opportunity, it'll be better for our content creators because they'll have access to a worldwide learner audience that's approaching three hundred
million registered learners across the two companies. And it's better for our enterprise customers because we're able to deliver them the breadth of that content coming from that content creator network across you to me and Coursera.
Hey, listen. One of the things, Well, first of all, I have to just follow up on the all the combination with you and you to me. Is it still though you said you're pretty confident about regulatory greg so maybe still on track to close this deal in the second part of twenty twenty six.
Yes, we've heard nothing that would you change our belief that it will close, you know, by the second half of twenty twenty six, and then remain confident in getting all the regulatory approvals we need to do.
So. One of the things I thought, that's interesting. I always think about your business. You mentioned university industry partners You've got these subject experts. How are people most using it? Is it your corporate partnerships where people want retraining for their employees. Is it people on their own? Is it people who are just interested in about different topics like tell us where the growth is Is it all of it or certain parts of it?
Fantastic question, Kurl. So our business is, of course, Sarah, an independent company. We are two thirds consumer, one third enterprise from a revenue perspective. You to me is the inverse, they are two thirds enterprise one third consumer. For both companies, there is a huge focus on and growth in technology and specifically AI right now, and so for Coursera, last year we saw enrollments in gen AI related content at
a rate of fifteen enrollments per minute. In twenty twenty four that was only eight enrollments per minute, and so a real burgeoning interest that I believe will continue in twenty twenty six as well. And we are really focused on delivering not just learning, but delivering skills so that
people can't advance their careers. Eighty six percent of the learners who come to Coursera come here to advance their careers, and so we're very focused on delivering them skills that they can use to advance their careers and that they can demonstrate real mastery of as they are in the workforce.
Hey, Greg, really quickly thirty seconds.
That was Greg Hart, President and CEO.
Of course, Sarah, you're listening to Bloomberg Business Week. Coming up, we hear from the CEO of the company behind some of the biggest live events in the world, in fact, behind the greatest show honor.
I think Ringling Brothers and Barnum and Bailey, Monster Jam and Disney on Ice.
This is Bluebird. This is Bloomberg Business Week Daily with Carol Masser and Tim Stenovek on Bloomberg Radio.
A new year and we continue to track how consumers are doing amid economic data that points to some stress for individuals when it comes to buying things or spending on experiences.
That's where one guest from this past week comes in. Live events is her company's focus. It's behind Ringling Brothers and Barnum and Bailey, Monster Jam, Disney on Ice, Monster Energy, AMA Supercross, and the Super Motocross World Championship.
Sounds like a lot of fun. Hey, we're talking about all the stuff that Feld Entertainment does. It is family owned and operated, and we got up with Juliette Feld Grossman. She is CEO.
Let's talk experiences. Carol. You know, I think that I think that we're the greatest show on.
Well we are, but there's another one.
There's another one we could share this space. Live Events is our next guest's focus. Her company is behind Ringling Brothers and Varnum and Bailey, Monster, Jam, Disney on Ice, Monster Energy, Ama Supercross, and so much more. We're talking about Feld Entertainment. It's family owned and operated, and Juliette Feldg Grossman is with us. She's CEO of Feld Entertainment. She joins us here in the Bloomberg Interactive Brokers studio.
Welcome, how are you great?
Thanks for having me on today.
So you're actually in New York for a reason because of a big opening at the Barclays Center. The scale of what goes into your productions is just mind blowing, I think for a lot of people. We're going to talk about some of those, but first we want to talk to you about the economy and what you see because a lot of the experiences are discretionary spending, and you know, this is what we talked to you about last time, and the way that consumers are being more
choosy with what they're spending money on. What are you seeing across your portfolio right now?
It's very interesting. We tend to be a bellweather on the economy, as you said, because consumer spending on entertainment is completely discretionary, and as we looked at the end of last year, there was a lot there was reduced spending on entertainment across the economy. We could see it in other you know, credit card data that we review, and we saw it as well reflect in our business. And what we do is, you know, we try to drive that urgency is we're in a different market every
single week. We also introduced a number of seasonal offerings, so we have a holiday pre show with Disney on ice that adds that value for the consumer. But then as we came into this year and we came out of the you know, holiday spending period where people are buying gifts and they have other travel going on and
things that they've got to spend on. We're seeing, you know, as it's cold in a lot of markets across the US, that people want to get out, they want to do stuff with their families, and they're coming to see us. And so business has been very strong this year and we're excited to be in that place, so up.
Over last year. Yes, Wow, that's interesting. Okay, so tells you like, what's the average spend give us an idea of when you know, we often talk about going to a baseball game or a football game or a concert, like it's so expensive, but just give us an idea family of four they go out.
So for our events across the board, and there's a wide spectrum of what you can spend on one of our experiences with vip up sales and with merchandise, so there's all together things. But on average, our experiences are about forty dollars per person and for a family forcoming you know, you can you can calculate what that is. One of the big changes that we've seen in the
past years. There was regulation that went into place last summer around all in pricing, and that didn't only affect ticketing, it also affected rental cars and hotels as well. And so for the consumer it's it's a very good thing.
It's a positive thing that they're seeing the whole price up front, but they're not used to that, and so they are adapting to understanding that what they're seeing on the first page of their ticket purchase process is actually the price that they'll be seeing at the end with taxes.
So what about when once they get to that event, and the money that they spend at these events. I was looking at Carol shared with me a picture of her daughter at the circus many years ago and she was holding this stuffed animal and I was like, I bet you bought that stuffed animal at the circus.
We did.
They hare.
So the spending that happens at these events, that can sometimes you know, when you add in food, when you add in souvenirs, that can sometimes exceed the ticket price.
Well, we have a.
Wide range of offerings and products, and one thing you should also know is that all of our consumer products that we sell, whether it's a Disney Nice Monster jam or wringling, are actually custom design and exclusive to our experience, and we oversee the manufacturing of those and we also have a product guarantee on them, which many people don't know in a twenty four to seven customer service hotline, So we really stand behind the products that we put
out there and we feel their you know, high value, even though you know the expectation often coming to event is different.
Where those products made.
Many of them are made in China. We also have some products made in India, Vietnam and in the.
Us, So you must have been hit pretty hard with tariffs.
Yes, it has been significant to us in our direct purchasing on consumer products and also in show equipment. And then we see it through the consumer spending where they're getting hit in their own you know, overall spending.
So on this on the part that you sell to consumers, how much of the tariffs did you absorb versus raising prices.
We One of the things that we really looked at was our product assortment. So the tariffs were not applied like uniformly across all products coming in, so there were certain categories that already had a base tariff that was higher or lower. So we looked at the mix of our assortment to try to optimize for items that had a lower overall tariff impact. Because we couldn't pass the whole impact onto the consumer, it just didn't make sense in terms of their you know, price sensitivity.
Tell us about like your world and putting together these shows, whether it's the Circus, whether it's Monster Jam. You guys were talking. I think about the trucks before we got in. I've got a little grand nephew who is totally into them. But what like the logistics of putting this stuff on. But there's labor, there's lots of people involved. There's just a lot of things. So just give us an idea.
I mean these like these monsters trucks, Like what is even Like I'm always curious, like what it takes to build one of these? How long? What it costs?
Like I don't know, Ken Carrol drive.
One can I But just tell us little bit more like about your world and what goes on?
Sure will Monster Chain. There are three things that really make a great Monster Jam experience and event, and that's the trucks, the tracks, and the drivers. So it's all three elements that have to work together to make it exciting for the for the guests, and so we look
at innovating and developing each of those all together. So we've developed a training program for drivers called Monster Jam University, and that's allowed us to bring in more women into it because we have women and men competing against each other in the same vehicle, same competition, with an equal
shot to win. And then we also build all of our own trucks, so we have the world's largest race shop at our studios in Florida, and so we manage nearly one hundred trucks there, and we're building the chassis ourselves, welding them together, we're building engines, we're building all of
you know, most of the other components. I think they're only about thirty five percent of the components and the trucks that you could buy off the shelf because there's on such a massive scale and what we're doing is acrobatics, and so we're also always refining the track design to create great exciting obstacles to keep pushing the limits.
Twelve thousand pound trucks, yeah, well some of the I mean, look, it's Gravedigger is one of the trucks, Black Pearl acts Avenger backwards.
Bob, how much does a truck costs?
To be honest, I couldn't tell you.
I mean that's what we don't It's thousand dollars truck.
Oh yes, yeah, and you don't want to own one because wait till you see what the damage costs.
Aver.
We have audacious damage because some one of the things that our fans love about Monster Jam is that we'll go out there and destroy it. And just to give you an example, it has to be spectacular destruction.
But a grave digger side a.
Grave Digger is still hand painted. It takes forty hours to paint Gravedigger Wow. And so we have a painter dedicated to painting bodies for Grave Digger. And then every weekend we go out and we shred it and you do it all again, and we do it all again.
Do those does the maintenance team travel with the whole crew, And because you have to kind of have a mobile shop too, because you're going from city to.
City exactly, So we have in our haulers that are specially designed and we build those out at our facility as well. We have a mobile repair shop, so we have two trucks traveling in a hauler on transport tires, and then we have extra equipment and parts along there. And then we also have some depots around the US in different areas where we travel, so during the week between events, we can go there and we can do
more heavy repairs. But you know our team, and we call it the Thrash because let's say one of our trucks, Sparkle Smash, goes out during racing and blows the transmission. We'll take Sparkle Smash into the back during the event and we will repair that and we will replace that to the best of our ability and change the order then for the second part of the event so we can get out there again and deliver for fans.
Oh my god, is it that event the most difficult to keep? Like I'm just I don't know. I mean, there's the supermotocross, Like, there's just all these different things are they all have individual challenges.
Everything we do is complicated, but that's what makes it exciting and unique, and that's where the value is for our consumer that we do something you can't get anywhere else.
The revenue, if you look at top line revenue, you of course have ticket sales, you also have what you sell there, but sponsorships too a big part of revenue.
We have sponsorships.
We also have activation.
Program where we bring we support certain of our partners with retail programs that go to Walmarts and Target stores. And then we also have we also have a very big licensing business and we have media rights business across our sports properties.
What are you looking at it?
You can audition to perform in the circus.
Let me tell you something. Are you talking about circuits or Monster Jam? Because I think the ship sailed for me for both of those.
I think, but are you good at ice skating?
I don't know.
Actually we just had that conversation rollerblading, you know, Okay, that could have been something.
But labor is that a tough one too, though, like finding all the people to either fix the monster jam, you know, cars, or finding people? Is that easy or is that crazy? And we just got about thirty seconds.
It's never easy to find great people. But it's something that is important to us. And because of that, we have a long chevity, a lot of longevity across people who stay with you for a long company, and we're really proud of that.
Don't you think he could be like D like, I'm interested. I know I need to.
Start with a ride in one of the trucks that yeah, I don't know. Have you driven one?
No?
I leave it to the pros. Okay, you don't want to see me try.
You're the boss. You could do that, you're the boss.
Not well, not well, I know what I can do.
Well, that's Juliette Feldt Grossman, CEO of feld Entertainment.
Still to come.
I'm on Bloomberg Business Week. I look inside the world's first and only five star cruise.
We've got more on the camp Miss vacations featured in this year's edition at the Forbes Travel Guide twenty twenty six Star Awards.
This is Bloombrock.
This is Bloomberg Business Week Daily with Carol Masser and Tim Stenovek on Bloomberg Radio.
Carol, if you missed out on the McDonald's chicken nuggets with caviar, there's always next year's US Open.
You weren't there this year?
No, what did they do?
One hundred dollar cocaduc cocaduck.
Chicken caviar nugget on coca Yeah, caviar twenty four carrot Gold edition nuggets. You could have gotten too.
Jesus, Yeah, it's the US Open.
It is the US Open.
Just saying, hey, speaking of luxury, Yes, that's exactly where we're going right now. The Amandarin Oriental Lago Di Como nu Juma, a Ritz Carlton Reserve in Saudi Arabia. Alas Bucket a restaurant in Atlanta, the world's first and only five star Crews. Just a handful of some of the hotels, restaurants, spas and experiences that are featured in this year's edition of the Forbes Travel Guide twenty twenty six Star Awards.
Sign me Up, Sign me Up. Amanda Fraser is President of Standards and Ratings at the Forbes Travel Guide. She joins us from Atlanta on this Wednesday. Great to have you here with us. Tell us little bit more about the Forbes Travel Guide. I think there's a lot of guides out there, and I think we're all like, well, wait, how do we distinguish? So tell us about who you guys are and how you rate various areas of the hospitality industry.
We're in our sixty eighth year of doing this, and you know, I think the question I get the most is why do racings master? And you know, who are you going to trust? Is what we say at the end of the day. I think there's a continued online peripheric proliferation of a confusing travel advice out there, So our guide aims to cut through that clutter, and with our sixty eighth list launch today, there are more choices than ever before, just over twenty four hundred actually, So.
We were looking into how you become one of the inspectors to travel around the world.
Because it's just what we want to do our next career.
It doesn't sound like a bad gig like traveling to remote places and staying at luxury resorts and being undercover. People often have questions about lists like this and how they come about. Are the hotels and resorts paying to be in them? But no, you guys are paying to actually rate them. How does that work?
You know, thank you for asking that question. And it is an oral cavir and you know, lying on fluffy beds all the time. For sure. We pride ourselves in the integrity that we put into our system. So no, it is you cannot pay to get your rating. We visit every property that's on the list, and at the end of the day, it's about integrity, an ethical way of making sure that we're surfacing the best place is to stay because you know, we're talking about prices these
days in hotels. You're looking at things on our list one thousand dollars and upwards to night. So the experience has got to be exceptional and that's what we're there to find out.
I am also curious, Amanda. I mean, when you hit luxury, there's like just certain standards that are given right, So how do you you know when you're dealing with properties that are kind of the cream of the crop. What is it that then you're ranking them on arm because at that point they're at a certain level to begin.
With, exactly. And you know, I think at the end of the day, you can build a beautiful hotel. There's a lot of investment out there right now and some fabulous product, But what we are known for and what we stand by is the service. So seventy percent of our algorithm that makes up these awards is based on service.
And when we dive even deeper into that, the big thing that everyone's talking about right now is authenticity, and we know that that's important because people want to feel closer to brand, They want to understand the brand and identify with it. So the hotels that do that particularly well, that define their brand standards and that deliver that authenticity, they rise to the top in our system.
Should we talk Yeah, I want to talk about about five star crews because that I think is one of the interesting takeaways for this year because it's the world's first and only five star crews. What can you tell us about what to expect on a ship such as this, an experience such as this.
I mean, my goodness, it is historical, not only for us, but for the cruising industry to have Ilma, the Ritz
Carton York Collections first five star crews. It's the first hotel brand to take cruising into you know, mainstream on our list, and you know, it really is fantastic because they can deliver at such a high level and because of their ability to have a good, strong staff to passenger ratio and really they're delivering on that that we're seeing, which is about flow travel and multi generational travel, which just makes it so much easier for people to have
a vacation where they really don't have to think. And we talk about frictionless travel all the time, and that's what we mean because.
But it's such a big it looks like a big ship, and you know, typically you would associate an experience with a smaller ship that seems more personal, you know, a smaller experience.
How do they pull that off?
I mean, the Young.
Collection is a smaller ship, and you know there's other brands like Comman and orient Express coming out with smaller product this year. At the end of the day, it's really about the service and that's what matters, and that's what counts. And you know, this is a brand that's delivering at time and time again. Same with La Voyage, the restaurant, the Daniel Blue Restaurant on the celebrity ships, you know, being the first five star restaurant at see.
These are incredible brands and incredible individuals delivering.
I love Danielle Allude the person and his restaurants to be to be quite fair, Where do you want to go now?
No, I think where we want to go next is there's a lot of unspoken destinations that don't necessarily get the coverage sometimes that New York, Chicago, La London, Paris gets. So you know, we're looking at River Parrison because that is a really hot trend right now. And then also destinations like Charleston, South Carolina are making it big on our list this year as well.
Yeah, it's not just the reality show. I have a bunch of family that I've moved down there to do like semi retirement, and it's just everybody's moving down there. It's kind of a charming Port City weather, it's nice, uh and all that good stuff. I want to go back to the list here because I like there's a section smaller delivers big and I have to say when I go on vacation. I love people, but I like to get away from them. So I like to go where it's why.
Do you spend your working day with me?
Ok? Travel with you?
But I mean it's just like I I like where it isn't overcrowded. I like some space. I like to breathe. I like to be near an ocean. And that is something you know. I even used to go and stay in hotels and I wanted like these smaller luxury hotels. That was kind of a fun place to be. But that is certainly something that pops up among your highly rated list.
You know, You're absolutely right, there is definitely a shift towards that more intimate build and with doing that actually quite heavily in Macau even this year. So just for example, there's a lot of hotels within hotels, the Pies a Ground, the Capella, which are within these big integrated resorts, and I think that's really a reflection of the desire to get closer to a brand.
Yeah, so I want to go back to the business model here, because if you're paying to actually go to all of these resorts, have these experiences, you have a staff that does that. You then put this together that takes a lot of resources and the ratings are available for free to us. How do you make money? What's the business model?
Yeah, that's a great question, thank you. So while we do pay for our own rating evaluation system, I think the one thing that's really important that the consumer looks for as well is transparency. So we do while we aren't. You know, we are a consumer advocacy group at the end of the day, but we're also advocate for the industry, and you know, when we are working with the industry, we're offering them transparency if they would like it, into the results and for them to understand how they can
get better. You know. So when they're getting their rating every year, I mean ultimately they need to know are they achieving it at the very highest level are they perhaps in danger of losing because we go every year and it's about re earning and re establishing your brand every year.
So essentially, what you're saying is you have this consumer facing business which which offers their results for free to us as consumers, but you have this enterprise side of the business where you give a more granular, detailed breakdown for each individual property and that's kind of pay to play.
It is not pay to play, No, it is pay for transparency. So the racing is the racing is all and independently, and hotels still need to do that work. But at the end of the day, if they want to understand our system, our standards, how they did in our system, that's what the that's what the business model.
Is, all right. Tell us about Newgima a Ritz Carlton Reserve. I mean, oh mg.
Girl, if you have to ask, you can't afford.
It, no, But just I mean we talk about getting away from people. That is certainly a place. The picture alone is just kind of off the charts.
I mean, that's fabulous. The Red Sea, which I know has more fabulous news coming out, is one of those Giga projects that built from the ground up, and that team had a fabulous celebration this morning. They had a Forbes Travel Guide five star t shirts made up, and it's really just one of those futuristic results that we're just so excited to be able to feature out.
Where do you want to go personally after being at the helm of this, what's the place like in terms of trends where we should really have.
An eye on, you know, a place that we're looking at very closely. Is close to my heart where I'm from. The Cotswolds.
Yeah, everybody's talking about the Cotswolds, talking.
About the crops Falls. It's big in the news. We will be making our way there this year. Actually, I think we might have boots on the ground already, so look out for that on our twenty twenty seven.
How do people become inspectors?
Oh well, if you have to ask nice, nice.
You get tapped for it. Right, it's like a secret society.
It will a little bit. Yeah, they're definitely under cover. You can't find them online. That's that's the plan.
Yeah, there's a cute little reality Oh shuting a little evasive with this part. I get to say, the Cotswold, you really, you really.
Do keep that close close to the vest, right.
Very close to the best, because you know what to be truthful. If an evaluator is found out, and it's always a great game, then we have to kind of pull them out and start again, because, as I said, it's integrity bass. We take that very very seriously.
Yeah, I mean they're great stories of restaurant reviewers having elaborate disguises and you know, you always hear those stories historically about kitchens having pictures of these reviewers in them. But if somebody's found out at one place, they can't think you just end up going to another place and they're fine.
You might be able to, but you know, the game is very, very real, and we have to take that very seriously and make sure that that profile isn't shut out or amongst you know, a chatter behind the scenes.
One last question. It seems like we talk about it a lot, the ke shaped economy, a lot more wealth creation. It seems like there's more and more entries on the higher end hospitality space. Is that fair? Do you see more and more properties coming online to certainly feed into a wealthier public if you will that can really go out there and spend, because it just seems like a lot of wealth creation and then there's services and things
to service them. So I'm just curious, are you seeing more properties come online?
Yeah, I mean the pipeline is so strong, and I think you know, the great wealth transfer is feeding into that, and we also know that, you know, the younger generation are spending on travel like never before. So I think this is the beginning of a very strong decade for Travel and Luxury Travel.
That was Amanda Frasier, President of Standards and Ratings at Forbes Travel Guide.
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