This is Bloomberg Business Week inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Hi, everyone, Welcome to the Bloomberg Business Wee Weekend Podcast. This week back of US economic data, setting the stage for the upcoming FED meeting on Wednesday, and yet got to say top of mind an election outside the United States. Also the memes Talk Darling that continues to enrapt Wall Street. On the latter, we catch up with the author of the Trolls of Wall Street excerpted in the current issue of Bloomberg Business Week.
Plus Franklin Templeton and b and Y Melon are two giants in the asset management business. Jenny Johnson, president and CEO, Franklin Templeton and Honika SMI's senior executive vice president and global head of Investment Management at BNY Mellen share their.
Outlooks all of that to come. We begin with the elections in India and the surprising outcome as Prime Minister Narendra Moody's party lost its majority in Parliament, Moody must now rely on allies to form a government for the first time since he stormed a power a decade ago.
India stocks had their worst day in more than four years following the results. To understand it all, we leaned on the expertise of Bloomberg News senior editor Bobby Gosho previously covered foreign affairs with a special focus on the Middle East and the wider Islamic world, and he was Time Magazine's Bagdad Buera chief prior to joining Bloomberg.
Well, it's striking because this is a figure, Nardo Modi, who has dominated the Indian political landscape like no politician going back a couple of generations. For ten years, he's been front and center of Indian politics. He sort of commanded an aura of invincibility, and his party, which is very very good at messaging, very disciplined at messaging, conveyed that message ahead of this election. And this election was not just a referendum of his party. It was very
much about him. The entire messaging of the election was around vote for Modi, even though this is a parliamentary election. So if you can imagine the closest American comparison would be if in the midterms the Republicans went out to all their voters in the Senate and in the Congress, but their message was vote for Trump, not for me. Vote for Trump. That was the kind of messaging that went into this election, and so this is a personal failure on the part of Mody. They'd set the bar
very very high, four hundred seats they've gotten. The bare minimum to get a majority is two hundred and seventy two. The party by itself looks more likely to get two hundred and forty. Now it has allies and it can form a coalition, so it's very likely it will remain in government.
More.
They may remain Prime Minister, but his personal prestige has taken a real battery.
MODI already spinning this as a victory. Where did the polsters go wrong? Why did we see the exit polling show such a stark difference to the votally explain?
I think, I think some real deep investigations are going to have to be done into that exit polling. The numbers are so I mean.
Shocking.
Yeah, we've become used to it in recent years. All over the world. People tell polsters one thing and then they when they go to vote, they do something else.
Right.
This is a problem in this country just as much as another's. But the gap between what the exit polls are showing and what the results now seem to be indicating. I haven't seen a gap that wide in any major election anywhere in the world. So something, something has gone terribly amidst this is not simply, I would suggest, not simply a case of people telling polsters one thing and doing something else. I think something more structural might be maybe more structural problems here.
I want to get your comments though, on voters feeling left of India's growth, the growing inequality, pervasive joblessness, rising labor costs feels very very similar.
What is this a.
Vote against though? Is it a vote against Modi the personality or vote against Listen, I don't feel so good.
Well, For one thing, there's a strong anti incumbency vote, right, this party has been in power for a long time. People would like to see the other side get a try. That's just human human nature. That happens with democratic collections all over the world. But the other thing is that Modi's message of economic success has left out huge numbers
of Indians. Is the world's most populous country. And a lot of Modi's messaging is, look at how many billionaires we've created in the last ten years or in the time that I've been in power. Eight hundred million Indians still depend on highly subsidized handouts from the government from
food and that cohort of people. That's a lot of people were not included in this message of look how many billionaires we've created and a lot of the votes you know, as we're the patterns that we are seeing is that he seems to have lost a momentum in rural parts of the country. Farmers, those are the poorest to the poor in India tend to come from the rural heartland states where for a long time Mody was dominant, the BJP was dominant. Their message was vote for us
and all voats will rise. You will rise up from this menial labor you're doing in the farm and will you too will have a chance at economic strip.
Why isn't it rising up? I don't want to go trickle down, I feel like, but why isn't it spreading out?
Well, that's the nature of so much of India's economic growth over the last many years is that it has not been a growth that has included everybody. The problem of unemployment has not been reckoned with in this growth. This is a jobless growth for a large part. For the most it is not creating enough jobs. There's a giant country, huge numbers of people. Tens of millions of people are coming into the coming into working age every year.
The economy, even though it's one of the fastest growing economies in the world, is not creating tens of millions of jobs. So there's a square and there's a circle, and these are not going to matter.
So continue with the economic implications of this. We saw the stock market, or we saw Indian stocks I should say, have their worst day in more than four years. Obviously market's not like surprises. But I do wonder about the economic implications of this globally, Bobby, and what it means for a country that is trying to transition from developing country to a developed country.
I'm not terribly worried about the Indian economy. I will say this because so much of all these economic policies were built on a platform that the previous government dominated by Congress Party laid down. That laid down those foundations now the Congress is back in terms of economics, in terms of needing investments, not a whole lot of sunlight between the BGP and the Congress Party and its allies.
There may be some differences in prioritization, but for the large part, they both agree that India needs foreign investment. Indian economy needs reforms, Indian businesses needs support. Indian needs to be creating more jobs, and those jobs have to come primarily from the private sector. There's a lot they have in common in their economic vision, although if you ask them directly they would deny that furiously. Equally on
foreign policy too, this is the same thing. Both countries recognize that India's association India's ties with the United States are crucial, that India and the United States have a common concern about China's growing influence in the world. India, which borders China, which went into war with China in the early nineteen sixties, feels the heat very closely. I
don't expect big changes there. I think a lot of this has been the election has been to a substantial degree about how the parties regarded minorities in the country. The BJP, which is a very Hindu Nationalist Party. During this election, more than ever before, there was some really strident anti minority and particularly anti Muslim speeches from the
Prime Minister on down. The Congress Party and its allies come from an older, more secular, more inclusive kind of politics, and I think that is what won out at the end of the day. But more than again, to come back to where I started. More than anything else, this is the Indian voters voting against Modi rather than voting for anybody.
So, Bobby, is this the beginning of a new chapter in terms of India's political history?
It could very well be.
We've seen this movie before. Coalitions, large, unwieldy coalitions trying to form a government, sometimes succeeding but not being able to hold together the some of their parts, and another election coming up in quick succession. Now, if Mody can hold together his coalition partners, and the two main coalition partners are notorious for switching camps, They've done it so
many times in recent years. If he can hold together his coalition, he will continue to be Prime Minister, but he will no longer have that swagger and he will
have to deal. Momentum is everything in politics, right he will have to deal with an opposition in Parliament that is much stronger than before, but feels like it has the win in his sales, that will feel more imboltant to press against his policies, to push against whatever he's trying to do, particularly on social issues, and so he will not be able to govern with the confidence that he had before.
So, Bobby, if he's not able to govern with the confidence and swagger that he had before, where should we look to for change? Where would you expect to see changes as a result of this election outcome?
Well, a lot of the changes will be more optical than actual, shall we say. I think the fact that the rejection of this politics of bigotry, the politics of identifying and targeting minorities, the politics of sort of a majoritarian view of religion that India should be Hindu. I think all of that will recede, at least for a while. You know, a great deal is going to depend on what the opposition opposition can do with the momentum that
it has. Rahul Gandhi, who's leading the opposition coalition, has not been in this place before. He is an untested quantity in this situation. He has run a Congress party that has long been a family fiefdom, and nobody dares to raise a voice against him. He has not had to be conciliatory, he has not had to include lots of different voices in the decision making. As a leader of a coalition, he'll have no choice but to do that.
Well, that's what I was thinking about, because in our reporting you put it out where the twenty opposition parties formed a united front against Mody, and I think about, okay, united front against one. But then you have to take those groups right and figure out the way forward.
Yeah, So now do you make a play for Mody's allies and try to bring them on your side and try to form a coalition with twenty four twenty five different parties, or do you sit back and say, no, we're gonna let We're gonna be in opposition, we're gonna be a strong opposition, We're gonna let Mody dig himself into a hole. This is a very crucial decision that has to be taken first, and then the real practical day to day difficulties of hurding all these cats together.
It's one thing when you have a common goal of defeating mody.
That was Bloomberg New Senior editor Bobby.
Gosh coming up from the series to the sublime came Stop a big trade this week again, how the outcasts and insurgents are hacking the markets.
It's all in a new book.
It's a fascinating topic that I do think most people forgot about since January twenty twenty one, when game Stop was really in the news and you couldn't avoid it. I think a lot of people thought that this was going to go away when when GameStop went down it but more than that, people thought it was going to go away when the pandemic was over and these young traders would go home.
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Game Stop was a focal point on Wall Street this week. The memestock darling during the pandemic surging after the Reddit account that who drove memestock Mania back in twenty twenty one posted what appeared to be a one hundred and sixteen million dollar position in the video game retailer. We're talking about none other than Keith Gill, who also goes by the name Roaring Kitty. GameStop shares were already up
a cool one hundred and eight percent. This may its best month since January of twenty twenty one, and the stock was up another twenty two percent in the first week of June, even after share slumped thirty nine percent on Friday. This happened after the company unexpectedly released earnings and announced plans to sell up to seventy five million additional shares, and Gil hosted a YouTube livestream watched by hundreds of thousands of people.
We can't talk about memestocks without talking about Wall Street bets, the Reddit message board that, according to our next guest quote, would eventually come to occupy a key position at the center of a movement that turned millions of young Americans into investors and traders.
That line from a brand new book that comes out on June eleventh, called The Trolls of Wall Street How the Outcasts and Insurgents Are Hacking the Markets. The book by journalist and author Nathaniel Popper.
It's a fascinating topic that I do think most people forgot about since January twenty twenty one, when Game Stop was really in the news and you couldn't avoid it. I think a lot of people thought that this was going to go away when when GameStop went down. But more than that, people thought it was going to go away when the pandemic was over and these young traders
would go home. And you know, I write this. I'm writing this book about the story of how this happened, how this sort of online movement came to be, And one of the most surprising elements of the story is the way in which it has not gone away. You look at these statistics that we now have around retail traders, and you see that retail traders are still in there buying stocks and trading at the same level that they were back basically in twenty twenty one when game Stop
was happening. So, you know, this latest game Stop moment is just a sort of reminder of the fact that this whole world has not gone away, all.
Right, but it continues to play around with these stocks that you know, many of us question the fundamental stories here, So you know, I understand the lasting effect. It feels like a little bit like a video game and playing and so on and so forth. Is it something though? Okay, so it sticks around, But does it somehow broadened out and start to get into some names with fundamental stories.
That's a very important question for the future of the markets and for the future of the portfolios of.
All the people in this world. Right.
Look, on one hand, you have the importance of the memestock movement in itself, and I think part of what's so interesting about memestocks and game Stop is that there's something deeper going on there. People figured something out about the markets. You're right that in the end, game Stop going up was not about fundamentals. It was about social
media personalities. But there was some discovery in there by the crowd of these weird market dynamics around options and market makers, and there was this sort of educational process that was happening there. You know, it's derided as this sort of idiotic flare up, but there was something deeper
going on there. And that deeper thing taps into your bigger question here, which is that our focus on memestocks and game Stop I think has distracted us from the fact that this whole movement has broadened out significantly and now is much bigger than memestocks, and in fact, memestocks have gone down as a proportion of all retail trading.
I think what you've seen is that retail traders, you know, they are always thought of as the dumb money, but when you're in the markets and when you're investing and when you're trying things out, you learn things, and that you have seen that over time. You see that in this data that shows the trends, the trends that retail
traders are following. And as I mentioned, the percent of all trading that's gone to memestocks has gone down, and the percent that's gone to electric cars and AI plays and Nvidia has been enormous.
And so coming out.
Of you know, twenty twenty two, twenty twenty three, we had this market downturn, and that was another moment where everybody said, Okay, these retail guys.
Are going to get slaughtered. They're done.
You see coming out of that that the retail guys were buying when the markets were at their low, and they were not just betting on they were not just betting on memestocks, they were betting on AI plays, and so you see this sort of interesting migration. Obviously, it's also present in the whole crypto world, and that keeps going, and that's come back in ways that people didn't expect. But the idea is this thing has gotten bigger than any one place, bigger than Walsh Bets.
Certainly that that's so interesting, Nathaniel, But I do wonder to what extent the folks who you feature in the book, and then also the folks who just lurk in Wall Street Bets have actually made money because there were so many stories post memestock craze of twenty twenty one of individuals losing fortunes, losing everything.
So I think you know you again.
I want to sort of split this into two halves, one is which one of which is the sort of cultural phenomenon. And I think, you know, losing has actually been a sort of central part of the Wall Street Bets sort of culture going back to twenty fifteen, going back even earlier. I mean, this place has now been around for more than a decade, and part of the culture was a recognition we're doing something stupid. It was
about getting tension it was about. It was it was part of this whole sort of four chain and trolling online culture that, by the way, I think is deeply interwoven with Donald Trump and the alt right. I mean all of this stuff. I sort of explain how it played.
They these these different movements online played off each other over the years, and Donald Trump became this important figure on Wall Street Bets, and part of that was this weird trolling culture where you're both joking and being serious and you're doing stupid stuff, but it's also smart at the same time. It's a very sort of complicated online
world that I tried to untangle. But so that is one piece of this, and losing is a part of it, and there are I you know, chronicle some of these sad stories in my book, and you know, including this this suicide that really hit this community hard because of some of these losses. But at the same time, I tried to look at the data for both how Wall Street Bets was doing and how retail traders were doing. More broadly, I think what you see there is a
slightly different story. As retail traders have gotten into the markets, they, as I mentioned, have learned and the markets have come to seem less intimidating. And so, you know, the markets used to be a thing that young people largely avoided.
You know, the markets were something for old.
White dudes who you know, worked hired, and now it's something that kids care about. And the big picture data shows that it's very good that kids care about the markets because the markets are a very good place to
have your money. And even if let's say you're you're making you know, you're trying to time in video or Apple, maybe you're not going to make as much as an index fund, but it's better you have your money in the markets than that you're just sitting on it, you know, in your savings account.
So that's a bigger transition that interests me.
Okay, Nathana, we got to talk about a couple of the main characters in the book here, Jamie Ragazinski and Jordan Zizia. Who are these guys.
Jamie is the founder of Wall Street Bets. He's a guy back in twenty twelve who created this subreddit, and at the time it was basically an escape from his alcoholism. He was basically a thirty year old guy working at a job he didn't really like and he was looking for basically ways to fill his hour when he was
at home drinking alone, and he began trading. And he realized that trading was much more entertaining than he thought it would be, and he liked talking about it with people, and so he created this subreddit which he called Wall
Street Bets. And what's so interesting about Jamie is that it turned out that there were a lot of other guys in a similar situation, guys who were sort of struggling in life, struggling to find their place, feeling sort of alienated, and this community grew up around him and he found company in it, and it created this strange culture that we now know of as Wall Street bets.
You know, by the time he got kicked out of Wall Street Bets, which is one of the interesting chapters in this book, wall Street Bets had attracted a million members and that was when the sort of next phase of Wall Street Bets happened, which was really during COVID, and that was when this young guy named Jordan Zarzara took over as the sort of main moderator for the subreddit.
And he is another interesting character who's never really found his place in life, never really got a job he liked, and he found this community, and he found something so meaningful and rich in it, even in its all of its twisted humor and dark humor. I mean, it's a weird place. But the strange thing was this had a real hold on the people who came there, and it
became a real community. And I think that's something again when we talk about meme stocks, it's easy to miss the way in which this feeds into this much bigger culture, in this much bigger set of needs that the young guys coming there have.
I'm wondering about this idea of you know, quote unquote sticking it to the man, because there were moments during twenty twenty one where that was a big part of what Wall Street bets wanted to do. They wanted to show those hedge funds that they were smarter, They wanted to outsmart the hedge funds that were betting against Game Stop. Were they successful? Did they stick it to the man?
Yes?
And no?
Is my maybe disappointing answer, but I think that what happened, what has happened, has led to a real chastening of institutional investors. Institutional investors have realized that these traders are a real hour in the market when they come together. You know the David Goliath story. There are a lot of these little Davids who lost money, but there are really also a lot of Goliaths who lost a lot of money in this Even when you look at just the amount of short selling that hedge funds on Wall
Street to it has just gone down. I mean, it's not as though it just went down and came back up. There is a fear in the markets and it has changed the dynamics. And you know, that goes back to the idea that this online community, like so many online communities, is about distrust. And obviously that's playing out in politics. You know that's playing out in the presidential election, but that's also playing out in the markets.
That was Nathaniel Popper, author of The Trolls of Wall Street, how the outcasts and insurgents are hacking the markets.
Still ahead on Bloomberg BusinessWeek. Franklin Templeton has one point six trillion dollars in assets under management bn y MEL overseeing nearly fifty trillion dollars in assets for its clients.
Developed economies have aging demographics, and developing tend to have younger demographics except for China obviously, and it's going to have an impact on investing. There's going to be opportunities, but it's also going to drag down economies as a younger, smaller workforce has to support the folks that are older.
Franklin CEO, Jenny Johnson and Bny Mellons Global Head of Investment Management, Ponica Smith's are up next. This is Bloomberg.
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Eleven thirty investors are uber focused on this week's coming FED meeting. I was in Nashville this past week for b and y ME and Pershing Insight twenty twenty four. It's a gathering for the wealth management industry. At IT, I moderated a keynote with two senior executives in the asset management business who see so much and who shared their outlook and views on everything from AI and alts to debt deglobalization, demographics, digitization, and geopolitics, and a lot more.
Tim Here's some of that conversation that Carol had with Jenny Johnson, President and the chief executive Officer Franklin Templeton, and Hanikah Schmi's senior executive vice president and global head of Investment Management at BNY Mellon on the macro backdrop.
Franklin Templeton one point six trillion in assets under management BN y mail and overseeing fifty trillion in assets for its clients. You both see a lot, Your firms see a lot. What are some of the broad secular trends that you are seeing that are really shaping the global economy and will influence the investing landscape for years to come.
Jenny, let's start with you.
Everybody's talking about kind of the whether you have five
or three or six d's, but I'll start with the ds. Look, demographics is going to be key, and it's going to be you know, they're the develop economies have aging demographics and or developed economies have aging demographics, and developing tend to have younger demographics except for China obviously, and it's going to have an impact on investing there's going to be opportunities, but it's also going to drag down economies as a younger smaller workforce has to support the folks
that are older, and then those economies that are developing with it, like India. Fifty six percent of the population of India one point four trillion people is under the age of twenty five. So as long as they can educate them, right, they can be participating in it.
So demographics is important.
Obviously, I'll call it disinflation, so we can say r d's obviously where the interest rate environment goes.
You know, the supply chain.
Sort of reorienting supply chains is going to be I think opportunity from an investment standpoint.
It's also inflationary.
There's a reason we were in China, the China plus one story. You were in China because it was cheap, right, So as soon as you start to decouple and you know, change your supply chain, you're going to end up adding some costs to that, not to mention tariffs and others from geopolitical decarbonization, right. You know. Unfortunately in the US it is a it's become this red and blue state conversation.
You know, obviously honkey, you're.
Based in London, you go to Europe, it is still a huge focus and the reality is over ninety percent of the world's you know, governments that control ninety percent of the world's GDP have committed to net zero. Whether they get there or not as irrelevant, but they're focused on investing on that. And then finally, I'll call it digitization is just this, Uh, we're living in a massive technological advanced age with AI things like blockchain and those are going to drive investment results.
And then I got to throw in US debt.
I don't think we're talking enough about the longer term impact of US debt.
I feel like it's safe to say that all of us have spent our careers a few years ago, a few decades ago, where it came up in every market conversation, then it went away. It is back, and I feel like with a vengeance. All right, Hanaga, let's go to you in terms of the global macro.
Yeah, so Jenny summed up.
I summed it up very well, and we're sort of seeing the same trends. I was actually quite interested to see that the audience here, so you know, you think about the trends actually feel optimistic about investing.
Are you surprised, Well, yes and no.
And I would say the one thing, you know, we take a step back and think.
About these trends.
Trends create uncertainty, but trends can those trends and uncertainty can also create opportunities, right, because when there's more volatility in markets and in responses, people will respond differently, have
different needs, and that can create investment opportunities. Now, having said that, in this world of what appears to be disinflation, we have an expectation that generally we're still at rates higher for longer, but we are expecting with the information that is starting to come out tighter sort of lower tighter employment, that we are expecting to see some cuts later in the year.
But we're not going.
To go back as low as where we've come from. And I do think we're going to get back to an environment we're having higher interest rates is more the norm than the environment we've come out of.
One thing I want to ask you, and I think you know, we had the conversation that hey, folks, it was the low rate environment or zero rate environment, that was the abnormality. Yes, right, that what we're doing right now is getting back to normal. Having said that, you have a generation of investors advisors who were used to this dissiplationary environment. How does that, let me come back to you first, you know, how do we need to
kind of address that? How do we have the smart conversation around that, you know, in terms of investing and what it means.
So it's two ways, right, just sort of how we deal with it in our own organizations.
We do.
I'm sure you have it as well, Jenny, in our own organizations, people who have only been investors trained as investors this side of the GFC, of the generation that was also investing, well, good, Well, it's a lot of studies.
And actually I call it the investor management is actually, thankfully an sector in which experience really matters, and you sort of do realize that they researching as cycles.
But it does mean that we need to educate not only our own investors, but also our end clients in terms of what this type of environment and sort of having positive interest rates let's call it that means for investors and what it means for asset allocation. So we're spending a lot of time educating our end client, our advisors, but also our own, our own workforce.
Jenny, your thoughts on that, well, I mean the reality is I think we're getting into what historically is a more normal interest rate environment, and if you look at it, you know the economy has actually been able to absorb the rates increases pretty well, uh.
Pretty aggressive in the last year, right, yeah.
Very aggressive.
I mean I described to people as like, you know, of course you're going to see some slowing down data. They jammed on the brakes, right, you know exactly, it's whiplash.
But we're also.
In the camp and I caveat it with that Franklin Templeton. So we're one point six trillion, but we have we have five different uh CIOs who have slightly different views. Ci macro economic CIOs out have a slightly different view.
So I'm gonna it's a little bit like there oh.
Huge debate that matter of fact, that is insisted that, especially the ones that are the furthest apart to make sure that at least having an internal debate on it. But you know, I tend to and it's obviously converged over time, but you know, rates are higher for longer. The economy has definitely absorbed it pretty well. And you know, if I were to guests, I think it's maybe just one rate increase this year.
But I think you're right because they're also to your earlier point. There continues to be inflationary pressure from animating from the supply chain as well.
Right, So right, you look at also the conflicts around the world, which is putting pressure.
Certainly we've seen this being based in London on our doorstep. We've seen it's an energy price, We've seen it in food prices.
And it's coming down a bit.
We're seeing that the Middle East conflict at the moment is also putting pressure on supply chain.
You and I were talking.
Earlier about aviation, Carol and flights. I mean, you can just simply fly or airlines can't have to reroot where they go. My flight, you know, anytime I go to Japan from long and it were now the flight is taking an extra two and a half hours because we're not going over Russia. So think about the cost of the time, the cost of fuel, and you know those costs will have to get passed on in the price of goods. So it's it's that inflationary pressure I think is still.
There these big go ahead. I just go laugh.
I was gonna say one of the advantages that all you have is you're from all different places in the US, because you know, sometimes you get I always say my mother was a doctor, and she said one thing that always bothered her as bad doctors is sometimes they didn't just look at what was in front of them. They always had to be proven through research. And sometimes it's obvious in front of you if you talk about the environment around you. I bought a truck for the farm
this weekend. And I used to finance. I ran a financing company of autos, and so whenever I bought a car, I go into the dealership and say, show me your invoice and we'll start there and work our way up. It was let's start at manufacturers suggested retail price, and we'll tell you what fees we added. And it took me three months of walking out. I finally asked, somebody in California, can you see what you can get there? I was not going to buy a car for above MSRP.
And you know what, in the end, I ended up doing that. Really, it has changed so much. And so you walk into a restaurant, are they still pretty full, you guys. You know, again, you only see where you're going, but as you ask each other around, it feels like it's still pretty robust out there.
What concerns you do you have regarding the rise of nationalism and populism pushing us away from globalization and its effect on those emerging markets like what you folks are talking about feels like not going away anytime soon.
Agreed.
And that's inflationary, and that's inflationaty it.
Is no, I agree as well. I mean it's a it's been a concern.
Of mine and of ours for some time, this rise of nationalism, and also to benefit so our generation has already benefited from what I would call the peace dividend right sort of the Second World's War, and it was all about globalization. We all read the book The World Is Flat that came out, didn't you, Jenny, Yes, I did read some twenty years ago.
But that is changing.
We're all Jenny was talking about earlier we were all moving manufacturing to China. That is no longer happening with sort of reshoring, and that is adding to cost as well. So it's some mix of nationalism then a much more tense geopolitical environment as well. You throw that into the mix, and it is making for a much more combustible environment that I think will provide a challenge for corporates over the long term, notwithstanding what we're seeing.
So just don't want to have hit on the debt piece, because again, let's go there. Yeah, I don't think we talk about it enough.
So because there's a question wait wait wait wait wait wait wait, large debt has been an issue for a long time, but appears to we were to never how do we fix it?
So it was funny because on Bloomberg this morning, they were like, well, come on, we've always always talked about that.
Jenny listens to Blue Park, I love you all right, now you can go.
You know, they were talking about, you know, come on, you know, we've always been an issue on.
Debt and never seems to be a problem.
Okay, Well, two thousand and seven, we had nine trillion dollars we're now I thought it was thirty three somebody thirty okay, thirty five trillion.
One hundred and twenty percent of domestic product exactly.
And then people say, well Japan's two fifty, and they're you know, okay, except our largest buyer of foreign debt is Japan at one point one trillion and China number two at eight hundred billion. Okay, we are not at thread of not being the reserve currency. We're going to continue to be to reserve currency because there's nowhere else SA anybody's going to go.
That was Jenny Johnson, president and CEO at Franklin Templeton, along with Hanika Schmitt's senior executive vice president and global head of Investment Management over at B and Y Mellon. Catch that full conversation just had toymellon dot com.
And that wraps up the first hour of the weekend edition of Bloomberg Business Week from Bloomberg Radio coming up in our next hour. Not easy being a CEO, especially in your first year. Enter Ty Wiggins, part coach, part cheerleader and part advisor.
Plus women are increasingly stepping up to the tee golf tea. That is from the president of the PGA Tours superstore. And travelers. Yeah, they're still traveling. We'll talk about that with Hilton's CFO.
And speaking of travel, why one hotelier is not putting guest needs first.
I love this story. It's all coming Up. This is Bloomberg Business Week.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Applecarplay and then Broud Auto with a Bloomberg Business act or watch us live on YouTube.
Plenty Ahead in our second hour of the weekend edition of Bloomberg Business Week, including lessons from the top of the c suite with the author of the new CEO on the tips, tricks and mistakes to avoid for first time chief execs.
Plus Hilton's CFO on opening two new properties every day, and our Pursuits team on the anti hotel and rise of regenerative tourism.
Also move over, guys, okay, a record number of women are now hitting the green Jill Spiegel, president of the PGA Tour Superstore, on women taking on the game.
First up this hour, you might recall that last month we got some news in the world of executive transitions, JB. Morgan CEO Jamie Diamond saying his succession was quote well on the way and could come sooner than five years. Morgan's Stanley chairman James Gorman has also announced he will seed his role at the end of the year.
Managing CEO transitions can be a complex challenge for many businesses. Sometimes the new leader within their first few months, makes support decision or is unsuccessful in connecting with their employees or board. Bottom line tip not great.
Enter ty Wiggins. His job is to guide CEOs through their first twelve to eighteen months, often acting part as a coach, part as a cheerleader, maybe a venting partner, a challenger, and always an advisor.
I feel like I need one of those people, don't all?
I mean, I know people who can be your challenger.
You are I know lots? Actually all right, it's all though. In Tie's new book, it's entitled The New CEO Lessons from CEOs on how to Start Well and perform Quickly Minus the common Mistakes. Ty Wiggins is also Global lead of CEO and Executive Transition Practice at Russell Reynolds Associates and Executive Search Firm.
The opportunity in the book here is to understand the pressures and the challenges that CEOs go through in their transition. And I think if you're a senior leader or an executive at an organization that's undergoing the CEO transition, the book will give you insight into how to best support and also slot in with with the new CEO.
Well, you know, talk to us about who you talked to for this book to get some insight, and you know what is so important about maybe those first few days, first few weeks, first few months for CEO on the job, because I got to say, I feel like CEOs move around a lot as of late, and especially if it's a publicly held company and the stock isn't doing well, Activists are out there or media is all over it, and there's a lot of pressure now.
In terms of the book, interviewed close to forty CEOs and then had the opportunity to speak to CEOs such as from on the Glider of PepsiCo and Hantzpsburg of Verizon, Carol Tomato of UPS and a string of others that are so cited in the book. You're right, CEO tenures are decreasing, which puts pressure on this early period in order to get a good start. And I think some of the early actions that CEOs take need to be
really well thought through. We know that some key factors are the state of the business that they inherit, how quickly they assemble the right senior leadership team around them, and importantly what the former CEO does and how that individual leaves the organization.
Share with us. Though, in some of the conversations that you had with CEOs, what did you get from them about that first year?
A lot of humility, which was really good to hear. I mean, these are great CEOs, as.
You've mentioned, and you know, some of them came internally within the organization, and I think there was a common thread around how difficult the CEO role is, how there's no real sandbox for it in terms of getting ready.
It's a shock. We've talked about the.
Loneliness a lot across different medias, and it's an actual issue for a lot of CEOs.
And the responsibility.
You know, when I asked what the best and worst part about being a CEO is, often the answers are same.
The responsibility. You know, these are individuals that want the responsibility.
That want to lead, They want to have an impact on the organization in their community, but they also feel the weight of that responsibility in terms of being responsible for the financials. But also you know, there are employees, their employees, families, et cetera. In terms of the market and the communities that they lead.
What do you think about like those CEOs that are at a company leave and then they come back, like a Bob Iger, you know, Disney Revere, more like a Howard Schultz or a Howard Schultz right come back and you know their track record was incredible when they left, certainly by byger right and then came back into a situation where the company was under some pressure because if it's streaming, pivot and so on and so forth, you know, is he like kind of starting from scratch again a
little bit because some of the dynamics have changed.
I think it's you know, to have CEO return, you know, depending on the individual and the organization, it can represent a number of things in terms of a succession that hasn't been successful. It obviously shows a passion and a love for the organization to come back.
You know.
In many cases it's disruptive depending on the time period, you know, because we do expect the new CEO.
To see the world differently and to take a new long term view of the organization.
So if there are changes that need to be reversed, that could be a little bit unsettling.
But I think for the individuals involved.
You know, I think if they're leaving at the right time in their career, then you know, I think it's less than ideal for them to need to return. But each individual case will be different.
Ty, We've heard criticisms about boards being too close to their CEOs. Tesla, for example, one of the board members there is Kimball Musk Elon Musk's brother. Are boards too close to their CEOs? Shouldn't they be more independent from one another? They're supposed to keep them honest.
Right, absolutely?
I mean the board, the board role is crucial to the governance of the organization and they do play a specific role in One of those key roles that they player is to hire and fire the CEO, And so this is any CEO transition lands heavily on the board as well as all groups of individuals, and you know, within organizations, it can be quite a challenge to continue to maintain that independence, especially when you have a very successful, very dominant CEO.
Should CEOs be allowed to serve as chairs of boards in your opinion.
Well, I think it's common practice in a lot of organizations, especially in the United States. In other countries it's less common I think as long as there is an independent senior director to provide that council, that support and that challenge, it does allow CEOs to move with greater pace. So if the organization is in trouble, then that allows for
quicker decision making. But I think that if we look at the independence that we require, there's argument for the CEO to be separate to the chair role.
Having said that, is there a common mistake in talking to CEOs that you find that they all say, this is the one I made? Is there a common mistake among them?
The common mistake is generally around something that they say in a fairly public environment or an early action that they make without enough context and without enough information. And this is a question that comes up a lot, and the answer is, really it's any mistake that causes the board to doubt and to and where you might lose the confidence of the board because that obviously significantly impacts your tenure and your ability to delay the longer term.
Hey, you know this kind of spoke to us. There is a section of the book about dealing with the street and here we are, you know, coming off an earning season, but we're always thinking about the next one. But you do talk about Mark Klaus, who was CEO at Pinnacle before joining Campbell's and just the level of engagement and communicating with investors when he got to Campbell. I mean, that's that can be a big thing and kind of a real eye opener, right for CEOs who are early and on the job.
Absolutely, unless you've been a CIO or a CFO and had you know, extensive experience, the the investor relations will be fairly new and it's a challenging period of time.
You know, the people will often underestimate the amount of preparation that goes into delivering results and doing the investor road shows and you know, trying to form that relationship really early to get buy into you know, what you're planning to do and what you're thinking about doing, so you know, this is where it's really important that you surround yourself with good IR people and you know, people.
To support you in those conversations.
And you know, if it's early in your tenure that you deliver results, then you have a little bit of grace and you should take full advantage of that.
Hey, one of the things that we wanted to get into and Tim is and are prepping for this, Tim you kind of highlighted this, But executive compensation, CEO compensation. I mean, I think about sometimes when there's a company in trouble, right Peloton, you know, and you have Barry McCarthy comes in. He just stepped down his Peloton. CEO had total compensation one hundred and sixty eight million dollars
in twenty twenty two. To be fair, most of that compensation ninety nine point seven was option awards, so tied to the company stock price. But it's a lot of money for a company that's you know, got a dwindling market cap. I think barely over a billion here at this point. You know, it's an like, I hear what you like. It can be a tough job. I understand there's a lot that comes out of CEO today, but it does feel like they're taken care of.
Yeah, compensation is not an area that I get involved in. I know that it's a contested issue. I know that the CEOs that I work with certainly are really aware of that in terms of their role, you know, And you know, it's nice to it's nice to think that the people that I work with, especially, you know, this is not the driving force for what they're doing, why
they're doing what they're doing. Oh, and it is really about the opportunity to have an impact over such a large group of individuals and a responsibility and I guess a belief that they can do better and make improvements and you know, really serve. So you know, again, you know, I probably have a privileged group, but that's not the key driver for why they're doing what they're doing.
Hey, one of the things they do want to go to is chapter eleven, if I could do it all over again, and you share a collection of pieces of advice from some of the CEOs you talk to.
Yeah, when when people reflect on their their time early in their CEO role, there's a couple of things that come up, you know, most often, the most popular is that they would move faster on their executive leadership team.
You know, being CEO is a role you can't do on your own.
You must have the right people around and for a bunch of reasons, you know, we don't move as.
Quickly as necessarily.
Our gut is telling us to move, and there are other restrictions in terms of momentum.
So the first is that they would move faster.
The second is that they would engage the board more effectively and earlier, so similar to dealing with the street. You know, working with a board for the first time as CEO, not as an a senior executive is quite a ship and it usually spend more time on board and board related activities in your first year than you expect, so you really need to factor that in.
And the third is that they.
Would flex their leadership style more so they hang on to some of the things that served them well before without really accepting and stepping into the full gamut of the CEO role, accepting the good and the bad parts of it. In terms of driving the outcomes that they that they know they need to deliver based on what they've promised the organization and the board and the market. This is one of the things that you see second time CEO is doing much better than first time CEOs.
Is this pre contracting with the board is outlining, you know, this conversation of when not if I want to make a significant change or point the organization in a different direction, how are you going to respond and enhance this case, he was really keen to make sure he didn't get six or twelve months down the track and have the board say I didn't know you were going to do this or I didn't know you were going to do that, and it was really key to him moving fast exactly.
Hey, is Elon one of the new CEOs?
In your view?
I think he's a different CEO?
Well, I think there's you know, there are very few individuals like him, and you know, in many ways the impact and influence has had in his space. Yeah, I would say he's definitely in that new category.
That was Ty Wiggins, Global Lead of CEO and Executive Transition Practice at Russell Reynolds Associates his book The New CEO Lessons from CEOs on how to Start well and perform Quickly.
You're listening to Bloomberg Business Week coming up Revenge Travel? Is it losing its appeal? Are travelers still booking that wellness trip to Dubai? Are you Tim Nope? Okay, Well, we'll see what the Hilton CFO Kevin Jacobs has to say about all.
Of this, plus golf's growing interests from women since the pandemic. A member of the PGA team shares more. On the other side, this is Bloomberg.
You're listening to the Bloomberg Business Week Podcast. Listen live each weekday starting at two pm Eastern on applecar Play and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa, Play Bloomberg eleven thirty Bloomberg Opinions.
Andrea Fels did writing this past week that after three years of rushing to book trips in the week of pandemic era strictions sharply hire fares, protests against tourism, fatigue from endless hours spent at airports, and income squeeze by inflation are all taking their toll.
That was top of mind when Kevin Jacobs joined US. He's president and CFO over at Hilton at Worldwide Holdings home of course, to twenty three brands, including Hilton Hotels and Resorts, Waldorf Astoria, Hampton, Double Tree, Embassy Suites, and new brands like Spark by Hilton and Live Smart Studios by Hilton.
I think leisure travel has been normalizing off of kind of the boom that it had during COVID, but we're still seeing growing demand for travel, and in fact, most people expect the summer travel season to be quite strong, and you know, business travel is coming back and Group actually is leading the way, which wasn't the case during COVID, But you now have a lot of pent up demand for meetings and events that is fueling growth in our business as well.
So we're still seeing trends.
You know, certainly same store sales growth is not going to be what it was last year, but it's still going to be quite strong for this year going forward.
Where are you seeing the best growth, the biggest growth, like which portion of the hotel properties or which brands are seeing the best growth.
Well, if you think, I mean really all of the brands are seeing the best growth, the higher segments are growing better than the really lower segments at the moment, and our same store sales outlook as two to four percent for the year, and we think the US will be sort of at the lower end of that range and everywhere else outside of the US will kind of
be at the higher end of that range. So international growth is still a bit stronger than the US, but still growing, you know, reasonably well, like kind of low single digit same store sales.
Growth, So you're seeing sort of the same growth, whether we're talking sort of the budget lower end brands in the portfolio versus the high end brands in the portfolio.
Well, in our portfolio, we don't have a lot of budget.
We have a premium economy brand that you mentioned called Spark, and we're really not as distributed at the really low segments, which you know, they've been.
A little bit weaker, but that's a lot of that has.
To do with more difficult comparables to last year because they were quite strong, and there's a little bit of an effect of that consumer sort of slowing down a little bit, but mostly across our growth is pretty consistent across the segments that we operate.
Any signs of softness are folks trading down at all.
We're not seeing trade down and we're not.
Really again, other than the really low end of the business, which is a little bit lower than where we operate, we're really not seeing the consumer pullback. The consumer still feels, you know, really solid.
All right.
We know you guys have a ton of properties, about seventy five hundred properties including time shares. I think that was at the end of last year. I think when I was checking some of the data points, you own a small amount, you manage a bunch the bulk though, is franchise ease. What's top of mind for your franchies French cheese. They're not franchiese. That's like a grilled cheese sandwich. Franchisee owners, I'm a little hungry. What are their stress points?
And again, does the growth cut of mirror or the upside mirror what you are telling us that you've already kind of shared with us.
Yeah, I mean, like you said, you know, upwards of eighty percent of our hotels now, our franchises are are you know, we manage a bunch of hotels and our ownership segment is quite small, but you know, they're Our outlook is quite good. Our you know, our construction starts, you know, so new development. First of all, we think we're going to open will open nearly two hotels per day this year, right, So our prospects for growth are quite strong. Most of our franchisees are seeing the same
thing we're seeing. The prospects for development are quite good. Our construction starts, so new hotels going under development was up forty five percent in the first quarter. We think that will continue to be up this year, and we actually we think we'll start more rooms under construction this year than we did pre pandemic.
So I think, you know, look, it's not it's not equal everywhere.
And you know, our franchises are looking at prospects for revenue growth. They're thinking about their cost profile, right because with this great inflation that has fueled the revenue in our business, you know, there's cost inflation. So we're working with them to think about how to drive incrementals cost savings in the hotels. But generally speaking, our owners and franchises are quite fullish as well.
We want to talk a bit more about the cost equation, but I want to go back to that, you know, two new hotels every day. You guys did come out with some news about expanding your lifestyle portfolio, doubling it to seven hundred hotels within the next four years. How come? How and where? Like, where are you doubling? Where are you opening two new hotels every day?
Well, it's really across the globe, and so yeah, we put out a press release about our growth and lifestyle we're celebrating our tenth anniversary in the lifestyle space. The lifestyle segment broadly has grown fifty percent over the last five years, and it's been double. The addition the additional hotel count and lifestyle hotels has been double out of the broader industry. So these are very popular type brands.
We've been in the space for a while. We recently acquired the Graduate brand, and we entered into a joint venture with another group to bring the Nomad brand, which is a luxury lifestyle brand, into our portfolio. So we now have six great lifestyle brands. And yeah, we think we can go from what we have three hundred and fifty lifestyle hotels today. We think we'll have seven hundred within the next four years and the growth will really be around the world.
So, Kevin, how do you make sure that the new properties that you add, as you mentioned two new hotels per day around the world, how do you make sure that the franchisees are geographically protected from competing with Hilton and other owners of Hilton when they're out there.
Well, yeah, I mean we're pretty careful.
Look where the interests are aligned, right, one hundred nearly virtually one hundred percent of the capital.
For our growth comes from other.
From hotel and people investing in hotels, either building new hotels or buying hotels and affiliating with them in our brands, and we're invested in their success because if they're successful, then they will choose us for their next deals, and that that obviously enhances our growth rate. And so the way you do it is you're you know, you're just
very careful. We work with each and on each and every new hotel deal, we work with our partners to find the right locations for the right brands, and and we we want and need each of our hotels to be successful.
So it's sort of it's it's pretty self regulating.
Interests are aligned, and none of us want to put a hotel, you know, on top of another hotel where they're going to.
Compete too much.
And the reality is is we it's up to us to keep growing our customer base, having our brands be strong and driving that premium for fom rmans so that our owners make more money when they invest with us, And if they make more money when they invest with us, then they'll choose us for our next deals for their next deals, excuse me, which which enhances our growth rate.
Hey, Kevin, our Bloomberg intelligence team of analysts, noting that you guys cleared your debt maturity schedule before twenty twenty five, the majority now do in twenty twenty eight and beyond cushioning it against sector headwind So it sounds like it really gives you, guys, really some you know, freedom to move around no matter what might happen in the economic environment, at least for a couple of years.
Is that fair.
We've always been focused on financial flexibility, right, So it's not just the ultimate quantum of our debt or the cost of our debt, which of course we care about a lot, but we're always looking for opportunities to push maturity. We have one small maturity in twenty twenty five, and then and then we don't have maturities for a while, and that served us well in COVID, you know, and COVID when our revenues went to year zero, we didn't need to amend our credit facility because we didn't have
any near term maturities. We didn't breach any covenants and always been leally focused on financial flexibilities.
That's Kevin Jacobs, President and CFO at Hilton Worldwide Holdings.
So Hilton is home to golf properties in case you didn't know, and increasingly you may find more women playing on those properties. Thanks to the pandemic, more women are engaging in the sport.
The National Golf Federation reported last year that one of the most notable aspects of the pandemic driven rise in participation over the previous three years was the influx of women and girls. It noted that there are about six point four million female golfers. That's up from five point six million in twenty nineteen, with the female golfer pool jumping fifteen percent compared to a two percent lift among male golfers.
All right, so that brings us to the Women's US Open, which wrapped up last Sunday at the Lancaster Country Club in Pennsylvania. We talked with Jill Spiegel, president of the PGA Tour Superstore, ahead of the final round.
Really fun to watch twenty six percent of all golfers or women, and sixty percent a lot of new people came into the game, and sixty percent of new golf that came into the game over the last few years have been women. So we we anticipate that twenty six percent climbing over thirty here in the new future. And what's really exciting as well is, you know, over forty percent of eighteen and under golfers or girls, which is great.
So that trend is going to continue, and it's really exciting to see not only in women's golf, but in women's sports in general. You know, if you look back just a couple of months ago with the craziness around Caitlin Clark and how that's translated into the w MBA, it's it's really exciting. And you know, viewership is much much higher on the LPGA and twelve. You know, the media consumption is twelve million viewers a week versus just what was just four million a few years ago, So
it's really fun to watch. We are very supportive of the female customer in our stores. In several of our locations we lead with women's apparel, and our resort locations we actually saw more women's apparel and men's apparel. So it's always been an important business for us, but we're continuing to really focus on it and continue to grow it. And you know, if it's twenty six percent of the business, we want it to be thirty five forty percent of ownership.
I wanted to take a step back. Why do you think more women, more girls in particular, are engaged. What is it particularly, is there a player? Is it like, what's going on?
Well, you do have that, I mean you have you know, you have Nelly Corda, which has been amazing to watch. You know, she's won six of our last seven tournaments. And I think, you know, I think COVID was really good to the golf industry in general, and I think it attracted more women at the time. You know, people people, you know, adults who were working from home, had more flexibility. And we're getting out on the course and you're seeing
the demographs changing a lot, which is nice. You know, it used to be middle aged white men, and you're you're seeing not only are you seeing more women, but you're seeing more people of color and a lot more youth. So it feels more accessible, more fun. It's you know, I think golf can be very intimidating if you're new to it, and I think some of those barriers are getting broken down, and I think it's a little more casual than it was.
I'm wondering about how much that growth from the COVID era has continued. I think of I'm a cyclist, and I think the cycling industry got a huge boon during COVID, but it is just getting crushed right now. Some sports are not seeing that bump continue. What can you tell us about golf?
Well, it's a really good question, and you know, we you quote us some stats from the NGNGF and we look at it closely too. And twenty twenty three, you know, twenty twenty and twenty twenty one were record years, and the last four years rounds of golf have been at an all time high, with twenty three at a peak. Over it, five hundred and thirty million people. Rounds of golf were played and participation was almost twenty seven million, and twenty twenty four rounds of golf are up over
twenty twenty three. So we were all holding our breath. You know, our business doubled during COVID, which is tremendous, and we were thinking, you know, when is the air going to come out of this balloon? And it really hasn't happened. Industry has never been healthier. And what's exciting to see too is not only are people playing golf on the golf course, more people are actually playing off course golf. And when I talk about off course, what
I mean is simulate our golf. They're either going into a five iron or a top golf and ten percent of those people are converting to green grass golf. So it's the growth continues in your right. There's a lot of sports that saw a huge fightering COVID and they're regressing down. In golf, recreational golf has never never been happier, you know, healthier. One in nine people are playing golf, and the beauty of it is all ages can play, all abilities can play, and you can play together regardless
of your skill level. Now it's you know, people are sparking an interest and we're seeing in our business. You know, the technology business is really really healthy, and the simulator business is healthy. And you know there's a launch of an interactive league this starting this January with professional golfers called TGL, and it's you're going to see that the you know, twenty four of the top players on tour playing simulator golf down in Florida on Monday nights.
That's really cool.
There's a former surgeence of different ways you can take in the sport and simulator golf doesn't take four hours, and you know, you can play it in a couple hours or an hour. Even so, it's opening it up for and making it more welcoming, you know, without the time commitment.
That was Jill Spiegel, president of the PGA Tourist Superstore.
Still ahead on Bloomberg Business Week. The hotel ya that says it's time to stop putting guest needs first. And on the flip side, the hotels that are finally prioritizing one significant group of travelers.
It's coming up in pursuits. This is Bloomberg.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Apple car Play and and brout Auto with a Bloomberg Business apt or watch us live on YouTube.
The hotel with no front desk, no keys, no set check in and if you get hungry, well the local villagers will cook for you. Sorry, guests, your needs are not really top priority. Contrast that Tim props with hotels definitely and finally putting one group of travelers first.
And once you get to a hotel in New York City, how about the best shows to see? You know, it's time for Bloomberg Pursuits with us. The editor of Bloomberg pursuits Chris Rouser and at Bloomberg News, travel reporter Lily Germa. Chris, I want to start with this great story that Lily wrote about hotels finally catering to neurodivergent travelers. First, I think the term neurodivergence is not on everyone's radar, So talk a little bit about that.
Yeah, I think, I mean that's that's a great point actually, and I think if you know, sometimes you can put us something like that in a headline, people say, oh, I don't know what that means, So that you know that that means it's a whole spectrum of things, you know, from people experience autism to other disorders, and it means that going through the world can be quite different. And in Lily's story, we talk about how seventy eight percent
of individual or families who experienced neurodiversity don't travel. They
just don't bother. This is specifically aesism actually, and that means because loud noises can be a problem, textures can be a problem, lots of people can be a problem, and it can be such a headache that you know, families just stay home because it feels safer and it feels easier, and finally, some hotels are figuring out how to make travel easier so that families who want to try it and want to see the world can actually do it.
I love it because for kids it's so important, whoever they are, whatever their background, whatever you know they are dealing with, it's really good to experience life in some way. So, Lily, I'm curious how this story came up on your radar, and then talk to us a little bit about what hotels are doing.
Sure, so, I noticed that hotels were increasingly getting their staff certified to you know, understand how to handle and how to serve nearro divergent families. And there were a couple of surveys that came out in April from Hyatt Hotels, and I thought, well, this is interesting. It seemed like
to be a bigger push. And that's pretty much what's been happening with some of the larger hotel brands, including Virgin Hotels, Hyatt Hotels, some of the resort brands in the Caribbean, such as Charisma Hotels, and they are going to a couple of different certification bodies to train their staff and know how to handle, you know, any situations that come up at the hotel or understand what the need might be for NewYork virgen families. So I thought, well,
this is interesting. It seems to be gaining traction, and I learned quite a bit as the research unfolded.
Yeah, so, Lily, I'm really interested in not just the hotels, but the travel agencies that have sprung up around this. Tell us about Magical Storybook Travels.
Yeah, so, Magical Storybook Travels is led by this lady who early on discovered that her son had ad adhd and didn't really know, you know, how she would continue to travel. And when she asked her peers, they were all like, well, we just don't go anywhere. And she didn't want that to be her story for her family, and so she set up this agency and she trains basically families to be ready to handle their first vacation.
And that includes several meetings you know what she calls you know, pre travel counseling, where they sit together and she goes over what works for them day to day in their you know, regular routine, what doesn't work, what's a trigger And once they go all over all of that and she starts getting ideas together for them of where they could go, and she usually recommends certified hotels
or destinations that she thinks they could handle. But sometimes they want to go to Disney World, so that definitely requires, you know, ideas on how they could handle a whole vacation there. And what she does is she tells them to go and spend the night at Grandma's for example, you know, get used to doing something different away from home. I think it really is a long process.
Yeah, and she knows, you know, for the hotels that she recommends, right Lily, is she that she can provide video tours or show them video tours. She knows four plans. You know, she knows about sensory triggers that she can tell people about and she you know that really helps. All that prep really is means everything.
Yes, absolutely, she did mention that was a big part of her work was the video tours for the kid to be able to visualize himself or herself in its place, you know, so that's a part of her job as well.
You know what's interesting too, I was thinking, like what about things like a Disneyland or a Universal park where I think you know, any of us who've got kids like one of the best things is taking her kids to like experience at Lego Land. You know, I know Tim went are with this on like I just think how magical that is. Are they those types of institutions, those companies, those types of experiences. Are they warming up to this and providing opportunities for kids?
So what I understand Legoland is one of them. Disney World, that's from what I from what the travel agent told me. Their hotels are not doing so well in this in this area, but the actual parks are. So that's an interesting, you know, a differentiating factor. But yes, some of them are warming up to it. I will say that, you know, I could say about two hundred of them have been certified with IBCCS, which is one of the main bodies.
Maybe one hundred more with another one. But it's generally it's you know, it's it's not enough, and I think that it should really speed up.
I think what's interesting too is when you write about it in the story about employees really becoming sensitive to families and their needs so that they can help parents when their kids need assistance, you know, whether there's a meltdown or something, and helping with other people you know in the general public who always think they know better and they really don't necessarily.
Yeah, that was really eye opening for me as well, because a lot of times you might see, you know, a kid having what we call it tantrum, but really it's not behaviorally right cause it's a neurosensitive condition, all right, So.
We want to go from finally meeting the needs of an underserved group to another approach and hospitality about stopping putting guests needs first. I love this story. It's kind of a place I want to go, although I don't think I can afford it. Chris tell us though about this story, and I don't know the pitch or how it can.
Yeah.
So, first of all, you know, Lily, as you may have noticed, is an expert on sensitive travel, and she has a column that we've recently started with Pursuits called the Better Travel Bureau, where we talk about the business of making tourism more equitable, more inclusive, and less harmful to the environment. And we talk about the people, you know, sort of transforming the industry and figuring out ways to make travel not only less harmful, but actually a positive
influence on the world. Yeah, because we really believe in travel you know, sometimes sometimes people are like, oh, if you really care about climate change, don't travel at all, And we just don't see the world that way. And travel can be everything from taking the train to something that's in your city's backyard to going around the world and doing some eco tourism and learning about communities that you never would.
Have known about.
And so Lily has found a very interesting hospitality project that really involves a community and it's actually much more about the community than it really sort of is about you travelers. So, Lily, why don't you want to tell.
Us about it?
Sure? So I have to credit our incredible travel star Nikia Texting, who's actually tipped me off on this. On Tierry Tetier, who's really avant garde hotelier and started this new concept, you know that's called seven hundred thousand hours Impact and he's been in the industry for a really long time, but he says that it took him just about as much time to realize that hospitality really should be about elevating and empowering communities and not so much
about catering to guest whims. So that's really interesting because he's on a very you know, he's on a luxury bracket. He does his hotels in a very unusual way where you don't have a typical restaurant or you know, check in out or you're basically free the vacation the way you'd like. And he has these pop up surprise dinners and lunches and different locations on the property. But now he's you know, he did this every six months and a different location, and he had a very huge following
you know, that would go wherever he was. But he realized that the six months pop ups were harmful to communities because they've become dependent on the revenue, and then he would just disappear again for another six months. So
he decided to you know, change the model. Partnered up with an expert international development who's worked on you know, different projects in the global South for many years at the World Bank and other institutions, and together they've come up with this really unique model where it's still a small you know, what they call micro hospitality. So they only have a certain number of guests per year, per season, about fifty and it's about thousand, two thousand dollars a night.
But before you.
Can even book, you have to donate, so it's like a membership fee, and.
If you don't right, there might not be a room available.
Basically, yeah, if you get five hundred euros, you might not it just might not be able to go. But once you donate, then you book and while you're there you get to experience, you know, a whole range of locally owned cooperative for cooperatives that are providing the activities but also building businesses. So you automatically know that your funds are going towards setting up these cooperatives and the idea is for these communities to become independent long term.
I have to say, this looks fascinating. I love the trend. We didn't get to it, but I'm just going to give Chris thirty seconds. Best show in New York City. There's a lot going on.
Yeah, So there are tons of shows opened this spring, like a dozens literally in New York dance shows, Broadway, blah blah blah. And so we did a recommendation list of what to see this summer and my my top two picks are Oh Mary, which is a hilarious sketch from the comedian Cola Scola was Downtown has a brief Broadway transfer you'll laugh until you Mary Todd Lincoln, right, Mary Todd Lincoln as an alcoholic cabaret star. Nothing like it.
It's completely idiotic and totally brilliant. And then there's Cats at the new Pearlman Performing Arts Center, Yeah, which you know, Mayor Weber was a big sponsor of Yeah, Cats, and it's but this is not.
Do you have Nine Lives?
You know?
Sorry, it's not cats with ears and tails. It's reinterpreted. The cats are actually in ball room culture. So like voguing down the runway. I think the show pose and it's weird. A story on the costumes. All the costumes are tear away. It's a really it's going to be wild and crazy and everyone's.
Going to be talking about it.
The Outsider is also on the list, which I've heard is just fantastic. Yes say yes, good one.
It's very original and people really like it.
Cat sounds perfect.
I guess we got to go. Hey, j Big thank you to Bloomberg News travel reporter Billy Germa, also the writer of the Better Travel Bureau column in newsletters, so do check that out on the Bloomberg terminal and at Bloomberg dot com, and also the editor of Bloomberg Pursuits Chris Rouser.
The Amazing Chris Rouser. All right, everybody, that wraps up the weekend edition of Bloomberg Business Week from Bloomberg Radio. Thank you so much for joining us.
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