Bloomberg Businessweek Weekend - May 26th, 2023

This is Bloomberg Business Wait inside from the reporters and editors who bring you America's most trusted business magazine.

Plus gloom O Business Finance and tech news.

The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio h.

NYC. See You Go, Digit Seen Us and Window bro Ny Say See you Go, Dig You Seeus and Wind No broke.

All right, everybody, a little Kanye West for you on this Thursday. The reason why? Uh he or his past relationship with Adidas.

Wait?

Are you sure that was Kanye West?

Yes?

Oh, okay, you're not familiar with the whole catalog. I just listened to the one record.

I have people who make sure I get it. Re okay anyway, Yes it was and he and his former relationship with Adidas or Adidas, depending on how you want to say it is the cover story of the new show a Bloomberg Business Week, which is out on newsstands, on the Bloomberg terminal at Bloomberg dot com slash business Week. So let's get into it, because the relationship was great while it lasted, but it's no more, so let's get

Yeah, we we do. We do it well every once in a while. I think this is hopefully every week. But this is one of my favorites the story. When this went down last year, we were like, holy only, this is a huge in sneaker world. This is a huge deal. It's like you think about Nike and the importance of the Air Jordan and Jordan brand to Nike Adidas. For them, they created a partnership with Yay formerly Kanye West correct that became ye Yeasy was a gigantic money

The middle of it all.

It was.

It was memorable, great reporting throughout from him, and our mission to him was like, go give us the definitive story of what happened inside Adidas as Easy fell apart and they're planning to go forward.

How's that working out?

I think I think it worked out well.

How's it working.

Yeah, So, so let me take you back to last September. It's the middle of the night. I got a call on my phone and a missed call and a text that says, hey, it's yay, call me back.

Can we just sit with that for a moment.

Yeah, yeah, I call him back and he uh, and and we we do an intervie and he says.

Was it the middle of the night, right like midnight on a weeknight?

And yeah, And he says, you know, he wants to get out of his deals. He's done with corporate America. He wants to go out and just do it alone. And three days later he sends a letter to Gap saying, you know, stop selling my stuff.

I want out of this deal. That GAP deal falls apart shortly after.

He starts saying more and more more crazier things and went on some anti Semitic rants and talk about really really toxic things, and eventually the Adida's partnership fell apart as well.

Kim, what do you think happened to Kanye? Which is, by the way, separate from your story. Your story is really about Adidas, the history of the shoemaker, how they lost it, versus Nike and what they're trying to do to turn it around. But what you know, because I hear stories about Kanye being so cool, like Danny McBride says, you know, he just called him up and they started hanging out and it was fun and he was a good guy. But the stuff that he's said is not good. So what happened to that guy?

It is not good.

I don't know what happened to that guy. So on the phone, he literally asked me, do I sound crazy? And at that time, no, he did not. He did not sound crazy. He spent a few seconds waiting to answer question, really think about it and like kind.

Of deliver a bar back to me.

So like that that interview, he did not sound like he did when he went to the TMZ newsroom back in twenty eighteen and went on this long rant about how.

Slavery was a choice. He did not do any of that.

But then you know, a couple of weeks later, we're starting to we're starting to go again.

He just starts saying these things.

When you go back in during his time at Adidas, designers will say that he was inspirational at times, but as they learned more, they spent more time with him, they started to complain about all the types of you know, the more totalitarian ways that he ran his design studio.

What this really gets to, I think, Matt, is if you're Adidas and you're looking to you know, make some money in the shoe business, you gotta chip on your shoulder about missing out in that Jordan guy. Once upon a time Easy that which Yeasy existed slightly before Adidas worth mentioning Nike actually did a little moment where Nike was making Easy, which are some of the most coveted shoes and sneakerdom, but air Easy, right, So the Yeasy thing,

Well, especially if you put all your eggs in one basket.

And so that was the most amazing part of this as this reporting bore out as much as forty percent of the profits at the company.

Forty percent eight percent of revenue and around forty percent of a profits as according to Morgan's down.

So that is a gigantic yeasy shaped hole. And the challenge that we had for for Kim and Tim on the byline, Tim Low also in Jermany, was Okay, what's the plane to fix it? So now that they have this hole, what are they going to do about it?

What is the planet fix it?

So the most immediate problem before they can do any of that is that they have one point three billion dollars worth of Yeezies sitting in warehouses around all around the world.

That is nuts, one point three billion dollars of sneakers of sneakers.

So wait, why not just unstitch the logo?

Because can you imagine the amount of manpower that would wait individually unstitching every little easy?

But they thought about it.

They did, They thought about they thought about burning it.

They thought about, yeah, donating them, donate just fully donating them to huge, chopping them up, chopping them up and turning them into fields like the turf on a soccer field is made out a little bit.

Don't you want to be in that meeting? It's like Okay, what would you walk us through the options of what we can do here?

But the most interesting I think was the donating them makes a lot of sense and would be amazing. Right, You've got refugees or people that are hit by natural disasters. They need shoes. But the problem that they found was what there could be too much trafficking.

You probably sell this worth two hundred and fIF three hundred, four hundred American dollars. Sure a refugee would love for him. They would love for American so would Adidas. Is what they landed on. Right, So now they're going to sell the shoes at beginning May thirty. First, they're going to start selling this huge stockpile of billion dollar stockpile of yasis. And they say, they say they will donate a portion of the proceeds to charity.

And what happens to the money that Easy.

Used to generate?

Well, no, no, that that Kanye would give a little yeah, exactly, so his side of his wide to the steel. Because this is really interesting, right, Like part of this the way this steal is structured was that Kanye gets a portion of the revenue of every shoe that's.

Sold, right, right, And that was a big part of the original deal that he signed.

Nike would not give him royalties on the air yeasy.

Because he wasn't an athlete.

Because he wasn't an athlete. He said, he was an athlete. I am a performance athlete and I play one on No. One on stage in Madison Square Garden.

Is what he said.

I saw his point, by the way, I think he is. He's a performer for sure.

Yeah, but they wouldn't give him that deal. Adidas would.

So now he makes an eleven percent royalty on this and those shoes that were made during the time they probably do have to pay.

Kanye has cut. It's fair enough.

So what does Adidas do or Audidas do going forward?

Right?

They obviously have a big hole well to fill.

There's been some churn in that time, right, Like, so what happened in the boardroom?

Yeah, at the at the top level here. So Bjorn Golden is their new CEO. He comes over from Puma at the start of the year.

We have a sidebar, yeah, because wow, the Adida is Puma thing.

If you didn't know this that each other, right, No, they didn't.

I know.

You have to go back to the World War Two. This goes back to World War Two and.

Two brothers who fell out Nazis and Nazi brothers who fell out.

Well, everybody in the country at that point was a Nazi. I mean like you had to join the party.

Shoot you the history is incredible.

One of them went to war, one of them stayed home to run the factory. They they came back, they had a bitter feud. They split their company, uh, and they opened two sneaker empires across the road from each other in the same small town in Bavaria.

By the way, did you watch Dust Blunder.

I did not great movie, A great movie.

Did not see that coming about Annie Dossler making the first exchangeable spikes for the German national team after you know, they'd lost the war and they lost there you know, any kind of national pride, and then they actually came up and won a World Cup. I think it was in nineteen fifty and it was the first time they've ever had spikes that could be changed for different grass conditions. So he was like an innovator as well.

Did they win?

They won?

Yeah?

There you go.

Yeah, Okay, that's the other side bar you guys.

Yeah, but so but Puma it's interesting that they bring a leader from Puma. Another leader from Puma run Tarley Davidson. Right now, y'all con sites used to run Puma. But now they've brought this new guy because Carson worshtead he'll like screwed everything up.

It was.

It was a tough It was a tough period and at the beginning it seemed like he was onto something right. He came in did did a bunch of cost cutting. E commerce is the thing. E commerce big. You know, I like to buy how people do love to buy things on the information super Highway.

I didn't.

Yeah, it's it's crazy.

But over time, you know, product cycles started to go out of whack, and as other things failed, then Yay's business within the datas became a larger and larger piece of the of the fit pie.

So do they pursue Can they pursue something akin to what they had with you? Or is there I don't know, Like, how are they thinking about their way forward? They have product? I mean, I have a young daughter. She was wearing Adida sneakers. At one point they go.

Back, you were paying like a five hundred dollars pair of Yeezies were you Ye.

That wasn't happening expensive, But I'm just saying, so, what is the way forward here?

Yeah, the new CEO says, you can't replace it with just one thing. And Adidas has this habit of just going back to its oldest stuff again and again and again and just changing a little bit, updating it, new colors, new.

To their credit, sometimes it's really worked, and.

It has worked many many times over the years.

You bring Backstance, you bring back Superstars, you bring back Sambas, you bring back Gazelle's. These are all designs that were that were that whose origins are all the way back in the sixties and seventies. This is like before Nike existed. Those shoes in the sixties were made. Now, you didn't come out till the seventies, wasn't really a factor until on the global stage until Jordan and eighty four.

And so the back to the vault, though, what does that look like in this version of it? From what we can tell so.

Far, Samba's first, right, Sambas seem to be hot right now.

The new CEO says he wants.

To be quicker to latch onto trends, and they've identified the samba.

As what they need to go toward at this moment.

So they're they're asking for more product from factories in Asia and getting that into stores as quick as quickly as they can.

And it also looks a little bit like maybe playing into some sports that people have forgotten about too, that Adidas was once known for, like wrestling, boxing, et cetera.

They like the specialty stuff for for certain sports when these aren't enormous enormous You're not. It's not a billion dollar business in boxing, right, but it's certainly something that you can capitalize.

And Muhammad Ali or audious exact sity.

Oh yeah, has he called you since the story came out?

He has not talked to me for several months now.

He's ghosted, right, He hasn't really been seen or talked about or talked to almost any anyone.

Yeah, he's pretty he's pretty much out of the public eye. You'll see him in the tableaus every once in a while in l A, just some photos of him. But but he hasn't been speaking too often to the press, like.

He's a recluse.

Now would you want to ask what would you ask him?

Though?

At this point, after all this reporting you've done.

Yeah, I want to Yeah, I want I want to know, like, have his opinions changed at all?

There was apparently there was a a lot of money off of this, right he deal.

He uh at the very beginning when he called me and told me that he wanted out of these deals and wanted to go it alone.

Right.

I don't know how much of that I truly believed he was going to do because I knew. I've seen the I've seen the documents on this. He was making nearly two hundred million dollar a year in royalties off of this, and you're just gonna throw that away. Yeah, it seems seems like it.

Amazing according to him.

Didn't need him, right according to him?

Yeah, yeah, So well, I feel like that's to his credit. Right, If you can really stand up and say I don't need these corporate shackles, even if it's two hundred million dollars a year, and you can throw them off, that's amazing. But if you then it's a big budd sort of turn into this like racist, anti Semitic spokesperson. That's not cool.

There's a few things we need to figure out. Incredible piece of reporting, really great read Kim Bessine Slippers and Athletes reporter at Bloomberg News. It's the cover story of the new issue of Bloomberg BusinessWeek, joining us along with the editor Jill Weber here in studio. Check it out great for the upcoming holiday read.

You're listening to the Bloomberg Business Week Podcast. Catch us live weekdays from two to five pm Eastern on Bloomberg Radio, the Bloomberg Business app.

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All right, zoom was certainly an indication of how we were working during the pandemic. But we've really leaned on the team over at Microsoft three sixty five for how we are working, yes, then, but also today, and they've got a new report out that finds that there's not necessarily any need to be worried about AI. Of course, to be fair, Microsoft is deep into AI, really awakening the world earlier this year with its ten billion dollar

Oh, I'm doing great. Great to be back with you, Carol.

Yeah, great to have you here with us. So tell us about this inquiry into AI. What you guys? I mean? The question is I've got the report in front of me, will AI fix work? And I think everybody's trying to figure it out. I kind of can't wait because I think it can be an assist in my job. But tell us about what you looked into, questions you asked, and who you talk to.

Maybe let's look at what's broken first. So this particular survey is our annual survey thirty one thousand people across thirty one countries, and the first number that popped out to me is exactly that fix that's needed. Sixty four percent of people who respond and told us that they just don't have the time or energy to get their jobs done. And we thought that that was really interesting coming out of the pandemic. People are tired, but it seemed to be more than that. So we combine that

And Jerry, something that strikes me anytime I talk to anyone, they're always concerned about when it comes to AI, maybe they could potentially be replaced when it comes to their job. Looking at your sty it's interesting as far as how AI is poised to create this whole new way of working, what would be the counter to that? And the benefits of AI were you might not necessarily be losing your job, it could actually assist you.

Well, we'll start with the fear. There's still a little bit of fear there. Almost fifty percent, it was forty nine percent of people who responded told us that they were afraid that AI would come and take their job, but that was overshadowed by another number. A wopping seventy percent told us that despite that fear, they actually would outsource everything they could to an AI assistant just to

Well, I'm thinking about email alone. I mean, I'm going to be quite honest with you, there's a ton of email that I never even get to read because it's just a ton of stuff that people are either pitching or research. And I definitely have figured out ways to kind of weed through do certain searches so that I really make sure I don't miss some of the important stuff. But how could AI ultimately help us in filtering through what is dumped into our email boxes on a regular basis.

Well, many of your listeners are probably familiar with chat GPT, introduced last year, and it's particularly good, it's summarizing, and so I've been using a product that we call Copilot Microsoft through sixty five Copilot. It essentially takes the models behind chat GPT, these large language models, and integrates it directly into your email, into Outlook and This does amazing things.

Well, so just share with me because, like I said at the top, I mean to be fair. You guys are all in on AI, no doubt about it. And in many ways that news of the Microsoft investment really did kind of wake up the world in terms of what you folks were doing. Specifically, Now everybody's talking about it. As you guys have been playing around with it. What are you finding are the great capabilities? What are still the things that need to be worked out?

The five seconds to wow type demo I do with customers is in a meeting, So in a meeting like this that would be just a normal business meeting, we're trading kind of conversation back and forward. And what it can do there is it can literally listen in as if it were an assistant to the meeting and summarize. That means, it can write notes. It can respond when I ask questions like what did Carol say again? Or

What's the thing though, that is still tricky because we talk about AI kind of working alongside of us and we don't have to go to the meeting. Yea, who, But I do wonder what are the things that you know? People say you can't really you know, duplicate a human in terms of their perception of things, and so on and so forth. So what do would you say that we still need to be cautious about or we're still figuring out or you guys are still figuring out when it comes to this.

Very astute question, because it turns out, while these things are incredibly useful, they do make mistakes. And these things, I mean the AI assistance that we have, so they get it wrong sometimes. In fact, the technical term is hallucination. If you believe that that literally is the term they make stuff up. So the reason that we use copilot as a name for our product is really the signal to the user, Hey, this is an autopilot. You can't just take the answers and say there you go, I'm

So how long do you think this could take before it's more widespread with users that could potentially use this type of things in meetings when you do have still some of these hiccups and glitches that could happen with AI.

We just introduced a couple of weeks ago that we're expanding what we call our Preview program to six hundred enterprises around the world, so we'll have hundreds of thousands of users here in the coming months. So that's kind of the scale that it's out at right now. But it's moving very quickly. On my team, we talk about AI time, the psyche time of the industry has really increased as we're able to build on top of these technologies really quickly. So I don't think it'll be a

You know, for someone who has been you know, focusing on workplace trends and coming off a really crazy period, you know, meaning the pandemic specifically, and we're able to track a lot of things. How are you kind of placing generative AI machine learning in kind of I don't know, is it akin to some other great or interesting development in terms of how we work? Like, how do you position it historically or technologically for that matter.

We think it's as big as the PC revolution or as big as the Internet. We think it's that big. You know, if I again frame it, we would say, wow, you couldn't write a script like this if you were trying. Really, what the pandemic did is is rewire the where and the when of work. So it changed entirely around the world, you know, those two dimensions of work. All of a sudden,

Is that good or bad? Bottomly, because you know things they're never right black and.

White, like it's it's that's right.

We're worried about people not really talking to each other. I have a colleague, Matt Miller, who laughs at when we all get on a zoom call and we're literally like right next to each other. But I'm sitting there typing, you know, notes, and you know, it's just interesting.

My response to that is I would say, you know, AI giveth an Ai taketh away, Like we have this moment, and the way we think about it is what have we gained and what have we lost? And how do we lose as little as possible? And how do we gain as much as possible. But you're exactly right, these big if it's as big as the PC, you know, if you really believe that it's that type of shift, then you do have to recognize, Wow, this is probably

As we go.

Yeah, right, And the more we use it though, right, the smarter or more specific it becomes.

Jared.

Nice to check in with you again. Jared Spataro. He's Coroporate vice President, head of Modern Work at Microsoft three sixty five on Zoom from Redmond, Washington.

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So our next guest works with many Fortune one hundred companies around the globe, working with them on HR programs. We're talking about health, wellness, wealth programs. She's got a great vantage point her company does too in terms of what's going on in the overall business. And it environment so great to have back with us. The chief financial officer of the publicly held a light Katie Rooney with us in studio. It really is great to have you here.

It's it's been a crazy, crazy quarter. Although I feel like within in a light years, it's normal, it's.

So chea, it's true, like our perspective has changed. Let's just start broad and Macro talk to us little bit about the business environment, because you do have a great window. And forgive me for those who don't know exactly what you're doing. You do work globally, you're working with lots of companies. Remind our audience what you do.

Yes, of course, so we serve thirty six million people across the globe doing basically human capital around health, well being, payroll and so the types.

Of programs that companies have right.

Absolutely, when you think about employee well being, everything we're trying to do for the employee in today's day and age. Given everything we're seeing, we are taking a different approach across the industry to say we have to engage with people differently to help drive a different outcome. We've done that a lot for clients, we've done that a lot

Kitty, do you feel like post pandemic that employees companies are looking at their workers differently, or do you feel like because it's a tight labor force that maybe companies are looking at their workers differently.

Honestly, I think either way you are yes, yes, or it is I mean it's a little bit of yes, yes. I think you have to We did a global mindset survey and we said eighty percent of workers say they feel moderate to high levels of stress. I mean, it doesn't matter if it's you know, the pandemic, if it's macroeconomy. There's so much in our environment today that I think employers have to play a different role in terms of how they're helping their employees.

Well, you've been in this role for six years ish, a little bit longer, a little bit longer.

I'm so sorry. I don't know, because a light actually carved out in twenty seventeen from a on. So I've been technically with the legacy company a little longer, and.

So I'm curious about how you've seen employee demands change over the course of your tenure there, what would you say is the single biggest shift and ask from employees.

Honestly, I think they found a voice. I just think we didn't, you know, And again i've you know, as an employer, I'm not sure we took the time to listen. And I think employees are now found a stronger voice that it starts with their leaving right, higher turnover, They're requesting more and so we have to help them in a different way. I don't think it's one specific thing.

Well when it comes to what the services that you guy guys provide for your clients. So I said health, wealth and wellness, right, did I get them off?

Yeah? Yeah?

So what is it Where are you seeing the most growth or more demand that like, this is what my employees want or is it everything?

I think it's interconnected. I think that's the important thing for the employee again, think about it, they I mean, think about what you potentially do today just to figure out where your paycheck is and where your health coverages and where your four one K coverages? How many systems are you going to? Where are you going right? And how do you know what to use right? And what the right decisions are? We say, should you be investing in your HSA a health savings account or your four

Well, how does AI and generative AI change this? Because I do think about think about the question, right, the conversation I could have with a system a platform that is integrated, but it seems like it could make it so much easier to use right.

I love that question because I think there's so much opportunity. It starts with the data. So think about it. There's a million searches today on Google for a doctor. Where do I find a doctor. I mean do you think Google knows what health plan you're in, what's in network, where you're located, who's the highest quality, lowest cost, right and helps you make a decision and can schedule an appointment and get you a second opinion and right. So, like you need the AI in terms of the underlying

So how do you do that? Yea? So how do you make it comprehensive, smart, accurate?

Right?

And then secure? I mean are you working on it?

You know we start there today? I mean security is table stakes, Yeah, I mean that just you can't have an employee concerned or thinking about that. We spend a ton of time, resources money on that, like full stop. Put that aside. Then the next piece is why we think this integrated platform is important. We know your pay we know your claim's history, we know how you're saving. A mom just had a baby, right, Well, they might

Right exactly.

That's the power of it.

Okay, is there risk at all and decreased jobs because of the AI impact? I know that's like the basic obvious question, but how are you thinking about it?

I just think it's different. Again. AI is only as good as the data, but it's not going to drive a decision. So you know, we have people calling us because they need to check the status, but they don't need to call us for that, Like that's fine, but listen, if somebody has a cancer diagnosis, they want to talk

Because you know, I think about the services that you offer, and I even think about my own experience with and we have a company with incredible benefits, and we do have some really great usable programs and so on. But I do think about if sometimes and if Matt Miller was here, another one of our TV and radio anchors, He'll go on and on about like the chatbots and how they drive him crazy. You're on a site and

There are times you don't want to talk to someone.

Yeah, absolutely right, and it's you know.

I have a mental health issue. I just need to figure out where to go. I don't I don't want to have to have that conversation yet, just direct me at the same time. Okay, now I have a diagnosis, tell me what this means. Right, So I think you just have to meet people where they are.

Is though chat our generative AI a big boost for what you guys ultimately do, Like, do you see that as a big growth driver?

I think it's a huge opportunity. And it's not just generative AI, it's AI more broadly because you're already using that. Yeah, right, absolutely, we have to be right when you think about I think about it, there's predictive, there's a generative, there's just in essence driving an informed decision for someone. It will only continue to get better.

So then what do you say to And we're gonna got about a minute and then we'll come back and talk some more. But there is this kind of wait. I'm terrified by it, and I'm also like, well, wait, we've been using it for a long time already, so how do you you know, what would you be saying to someone who was asking you, like, oh my god, what is this?

I mean, I love the analogy someone told the other day. I'm in finance. You know, the calculator came along. It's not like all the finance jobs went away, right, I mean, it's just we have to just think differently. Even with generative AI, at the end of the day, there's still a judgment call. So I think it's it's changing that mindset around how we benefit and use it in a more proactive way.

Yeah.

I just think it's yeah, And I love that you're being smart about it and very specific and just saying technology can be so terrifying, right, I feel like and people have kind of run in that direction, and I think there's been some great reporting showing how it can go astray. But there's also a potential if you think about online when it all started, right or the internet, I think.

There's always and I think it's exciting, like that's next chapter.

It always sorry every time, and then it's right.

You know, it's always run up.

We just have to learn as we go along.

We do.

We're talking with the CFO of like Katie Rooney here in our studio, I want to go back to some business stuff. Is it easy being a CFO right now, especially when we talk about credit crunches, markets tightening, questions about recessions and slow downs.

I don't know that i'd say easy or hard. I just think I think it's a really important time to be a CFO. There's so much.

Hasn't been important.

Well, I think that's fair. I think that's that's a

Do you feel more uncertain about the outlook? Do you think more about recession based on things that you're seeing or conversations because you do have a great as I said at the top, like a great window because you talked you have so many corporate clients.

Yeah, I think that's right, and I think I mean the good news is for us, it's an opportunity because we do serve you know, fifty percent of Fortune five hundred. They are focusing more on cost. We can help address a bigger need when you think about the solutions we can provide end Yeah, I mean, you know, fortunately unfortunately you're going to provide healthcare, you're going to do payroll right, and actually we can help provide a better solution to

So what do you look at when making that decision.

Yeah, I mean I think it starts with just healthy balance sheet, right, having that flexibility to weather different scenarios, so and being thoughtful about what those those could look like.

Did you see any impact from the collapse of like Silicon Valley and the four regional banks? Did that in any way? I don't know. Yeah, I'm just curious.

We really didn't, Okay, you know, and I think just how quickly the government stepped in. I think you know that supported so many different companies, so we really didn't. But you had to be prepared in case, right, we serve companies that have payable with those banks, Like how.

Do you make sure what I was thinking along the line.

Right, you're prepared and you can you can step in and help your clients, Like this moment of need is for our clients, right, if we can step in and be that trusted resource, like, it builds such goodwill in other macro environments. So I think that's that's the opportunity.

So can we talk about working from home? We just did talk about retail and real estate and some of the cities we see it outside our door of some retail that still hasn't come back post pandemic. One of the things I loved when we have talked in the past is you said how you were flying all your workers in for a week.

Right, yeah, I think, I think, are you still doing that? We do? We do? I think again, this is what works for me, particularly in finance quarterand is such an important time and we still need development, we still need face to face time. But trying to get people there one day a week or two, like one day a week, you spend that day just catching up with everyone. Yet like it's not which is great, but if you do it a week, we're not productive. It's not terribly productive, right,

So you're still doing that. So at'll be home for like three weeks and then they come in for a week.

And I wonder if you see to the extent that you can talk about this as a gender impact on that because the thing that I worry about so much is that when you force people push people back to work, a lot of women are staying at home still. They're the ones taking advantage of the work from home capabilities of companies, and that freaks me out.

You know, yeah, no, I get it, and I but I think that's why this strategy works for us, because they can plan. I can plan for one week. It's hard when it's one you know, it's hard to find childcare for one day a week, two days a week. So that again, that's what's worked for us there. I do have people come in a lot more. I love it. I'm in a lot more. That works for me. So I think it's just trying to get that balance right.

What about the tightness of the labor force? What are you seeing on that front? Is it easing at all? If you're hiring and you're.

Looking, Yeah, I'm not sure it's it's easying dramatically. I think though, that the conversation is changing in terms of what employees want. So it used to be you know, I will I can only find someone who would work from home in this location. I think because we've grown more flexible in terms of the talent pool in terms of the skill set we're looking for. We want more diverse skill sets. I think that's helping, but it's still I know, it's still a tough market.

And people still want to work from home. They do absolutely, So what do you say to the debate, because it does see I mean, it's still out there and we're still trying to figure it out. And we certainly hear from CEOs who I think from the pandemic and it she like, yeah, we're gonna be flexible, and then they're like, no, we're not flexible anymore. So what is the reality of it? Are we still trying to figure it out?

I think the reality is we have to find some time for people to be in the office, but it has to be meaningful. I don't need people coming into the office to sit in a cube all day and be on zoom calls. Yeah we don't, right, I mean, I a so I think, but we need training programs, we need mentorship, we need team building, we need so. I think it's making those in person experiences meaningful and having enough of them, you know, I think that's what matters.

We've got like a minute and a half in our final minutes with you. You're a woman who's a CFO. I hate to do that whole thing, but just meeting you and how cool you are. Can you talk about any advice you have for other women that are in male dominated roles?

Because was it easy getting here?

Yeah?

It was not easy. I think you have you have to be true to yourself. I got pushed a lot in times in my career have a stronger voice, be louder, do this like that wouldn't have worked for me. Interesting, and so I think I do have a strong voice when I need to, I won't be the loudest in

Yeah, no, it makes sense, it's no. But the whole concept of because I think there was for a while like, you know, you gotta be strong, yeah, lean in and I think you and at times you do, yes, but you also have to be true to yourself. Yeah, thank you so much. We know you had a busy trek while you were here in New York and you found some time for us, So thank you. Thank you guys for having always safe travels back home. Just so to kind of cover so much with you. Katie Rooney, CFO,

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Problem by.

All right, they're definitely fighting the fight, if you will, and we'll get into exactly what they're doing. Especially if you're head out west to the University of California at Berkeley, you will find a class called the Berkeley Citizen Clinic, and in its students are learning how to fight hackers and help non governmental organizations. We're talking about the NGOs

I just thought it was so interesting because we look, we're always interested in what's happening in the cybersecurity world, and this was just an effort that I hadn't heard about, and yet students are doing cool stuff.

And this.

The Travers Project, when I first even read about it in the story, just was like, wow, this is they're doing something that I had not been aware of before this Travis Project. I hadn't been aware of what they were doing. But what they're doing is actually, you know, draws attention from people that aren't exactly like, you know, doing good stuff in the world.

Right, And so the.

Berkeley Citizen Clinic comes in there and the this is a pro bono effort and it just has a little bit of a feel good quality. But what I'm really curious about is what happens in the classroom to lock this stuff down, Margie. So let's start actually Traverse Project. What are they doing this nonprofit and why do that? Does that draw the attention of the bad people in the world?

Yeah? Absolutely, So.

I talked to Austin Shamlin, who is the founder of the Travis Project, and he's spent many years working in the kind of anti human trafficking industry, I guess you could call it, and he's he's set up this nonprofit and what it is, it's tech. It's a tech company really, and they provide technology to law enforcement.

Around the world.

And so they you know, they have a special proprietary technology which you know is it was it's kind of their secret source.

And they're helping find the bad.

Guys, the people who are supplying women from Ukraine who are trying to get over to Poland sending them to brothels around eastern Europe.

And he's helping with this tracking technology.

A little bit of a freeze here, we'll see if we can.

Are you there, Margie, I'm here.

Okay, great, no, no, no, technology it happens. Go ahead and pick up please go ahead.

Yeah.

So often is you know, for this his human trafficking technology company. He's helping track down the people who are moving women and children around the world, often for sex trafficking.

Maybe every time he.

Speaks to a volunteer talk about, you know, where there could be people who might be in their networks watching what they're doing, trying to get a step ahead of them. So he heard about this clinic at Berkeley and now's

So what's the backstory at Berkeley? Where did this program come from?

Right?

So it kind of it all came from as a program which is like the Public Interest Cybersecurity Program, and that that was a module that cybersecurity students could teach, and Sarah Powers out at Berkeley has been kind of.

Spearheading that, and they thought, you know, often.

These universities do you have a bit of a pro bono effort and they look around in their community and think, you know, how can.

We be helpful?

And they realized that the a lot of these students were going on to work with large companies with huge sums of money, and they were never they were never going on to help kind of work with the small organizations around them or the the NGOs and nonprofits that they felt really needed the help the help secure themselves.

And so now.

They've been doing it for about I think it's like four years now, and they now they have to scream for the clients that they have come in and they make sure that they're going for the kind of lowest budget but higher risk clients.

Margie, you know one thing I think is interesting too, And we have so many conversations where when you talk to the head of a company, a publicly held company or other, you know, cybersecurity is a big issue. It is just a part of doing business. Of course they're going to spend on it, they have money to do so.

Yeah. Absolutely, And there's two things here.

So these specific NGOs that the Berkeley Clinic are working with, it's like that they tend to be super high risk because they are doing things like anti human trafficking, abortion work, you know, political kind of NGOs, and so they're super high risk and they are highly highly at risk of being hacked because of the work they do, because of

Earnings, it's a huge sum.

But we never really talk about how like the scale of the smaller organizations that are being hacked and the returns are smaller for the hackers, but it's easier for them to get in and cumulatively they're making tons of money off the smaller organizations which are less likely to be protected, which are less likely to have cyber insurance and then as the stats show, are more likely to fold as a result of that attack.

Marguie, This isn't really featured in the story, but I'm just curious. Is this something that the sources you spoke with think they could scale in a tangible way. Do they anticipate trying to roll out resources that make the education on how to do this a little bit more accessible.

I think it's something they'd love to do.

And in this example, what the students are doing is essentially it's free consultancy, so they're not providing any technology themselves. And I think that a lot of what the students going to do is they become consultants. They're working like one of the one of my sources, Rachel, she now works at Deloitte, and they're kind of I guess they're hoping that they could maybe bring what they learned with them and pay it back.

In terms of scaling it.

At the moment, there's actually Berkeley is one of several clinics that have actually popped up, and there is a consortium that they've all all together, and there are donors who are feeding some money into that, and I think they're hoping that that will expand and that will get bigger, and we'll see more community based pro bono work as kind of we see more cyber attacks happening and we.

See the cost of cybersecurity software rising.

In terms of scaling, it wouldn't be a scale like we would see with a product, but I think in terms of people getting involved in trying to help and maybe seeing private companies put some funding behind it, that we might see scale.

So the Travis Project, obviously, that was a really interesting one. I'm curious what other organizations the clinic at Berkeley and beyond, who else are they attempting to assist with these efforts.

Yeah, so interestingly, each each clinic so they they're attached to universities, and each university has their own I guess the theme probably isn't the right word, but the type of organization they do, so Berkeley was these high risk NGOs. I think M I T was doing more community focused like local healthcare and government, and so they kind of specialized on that, but Berkeley specifically.

I also spoke to.

The administrative manager at the abortion clinic in the San Francisco General Hospital who has worked with them. They've also done other women's health organizations. They also work with. There was a organization in Guatemala which was kind of more of a political NGO, so it's quite international, and I think that what really struck me was how this could be applied to pretty much any vertical as well, you know, impacts.

And yeah, we've read about all the ransomware hats that have gone down, and it's like hospital schools, private companies. It's like take your pick, and like anytime it happens, it is your nightmare. And then to think like you don't have the funding that you need to actually defend yourselves from these things, and especially if you're attempted you could work like these folks. It's an amazing conundrum.

Right, the concept of that, like what you're doing is all of a sudden shut down and then maybe you can't even recover from it. So it's really really concerning.

Totally.

I mean, the idea itself sounds terrifying selling a load of students on your kind of cybersecurity practice, which is meant to be you know, the most people well cybersecurity people would argue is the most.

Important part of your business.

But when you don't have the people to help you that, you know, when you can't afford it, you'll take what you're given.

And it turns out.

That actually these students are really, really good and they are being trained by the best in class. So the tutors that they have are people who've worked in the industry for years and they want to give back and they know what the problem is. And oftentimes these problems aren't really expensive to solve. That sometimes people are being sold things that you know they're being told you need to pay a certain amount for this. A lot of

So I think seven weeks of training. I love this, right, power of backups, importance of privacy controls and software, the operation of virtual private networks, and how to assemble it all into a cybersecurity plan. Seven weeks and they can then take on clients. I love it. It's just a really smart story and just people figuring out how to get it done. MARGI thank you so much, appreciate it. Margi Murphy, Cybersecurity report at Bloomberg News. She is there

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The world was once in love with them and thanks to account and hiss ip and industry was created until, of course, disaster struck in nineteen thirty seven. Fast forward and you adding a multi billionaire tech titan, the Airship. It is packed with more in the past, the present, in the future of lighter than air vehicles. A story in the new double issue of Bloomberg Business Week with us is Ashley Vance joining us on the phone along with the editor of Bloomberg Business Week, Joe Weber here

More than a little bit, and Ashley had just an inside look at what is just an incredible story. You mentioned Airship, So we're going to talk about an effort

Yeah, well, this one's a bit of a long in winding story. I broke the first story on this around like twenty seventeen. I had heard rumors that Serge was building this secret airship near my house in Mountain View, California at NASA AMES. And we published that story and SERGEI was not happy about it. And then and then some years passed and I just I met the man

The company that al Weston's CEO of Lighter than Air. Obviously, the thing with the Hindenburg was that it went up in flames, went down in flames. To be more specific, what is different about this.

Attempt, Well, so you're right, I mean, we have this glorious period from kind of like the early nineteen hundreds, even you know, the Hinderberg I think was nineteen thirty seven, and even past there where where we actually various countries produced hundreds of airships. They were used for tourism, in the military, all kinds of stuff. The Hindenburg disaster put an end to the tourism things, and then and then

And so what how does it accomplish the lighter than air, right, because previously that was hydrogen. We know that's explosive.

So the magic is Yeah, this time it's helium, which which has the benefit of not being flammable. It is a lot more expensing.

Seems like a key ingredient there, right right.

I mean, you know there are people now the hit it is very complicated the series on what exactly went wrong. There. There are people who think you could build these with hydrogen and do it much more safely. But obviously there's you know, all these years later, the sticks in people's heads. But this one's helium. It's it's enormous. It's bigger than

I guess I'm curious too about what's it like inside.

Yeah, well, this one for the moment, it's I would say not super super spectacular. It hasn't gone alot like on the inside of the actual structure. It's amazing. You see this geometric pattern of all these carbon fiber tubes again to the titanium and all the electronics and everything that goes into this. The outside it looks just like any kind of blimp airship you might have seen before. And there's a gondola underneath that has room for a couple of pilots and probably about eight or ten people.

One thing I wanted to ask you about Alan Western and Serge Bryn. How did these two guys get together.

It's an odd pairing. Yeah, right, it's almost It was almost a marriage made through logistics. Google's headquarters are about two miles from NASA Ames, which is where the Pathfinder one is being built, NASA's Silicon Valley Center, and now Weston. He had a career in the Air Force, working on pretty top secret sort of projects like this wars missile defense shields, and then he ended up at AIMS for many years working on low cost lunar landers and other

So what are they going to use these for? Is it clear yet?

Yeah, when it is clear what they intend to use it for, I don't know if the business case is totally clear. They you know, SERGEI maybe doesn't have to turn this into a profitable, profitable thing. He wants to use them to to take tons of cargo. He's very into disaster relief. This is kind of where he focuses

Sounds like somebody who actually went up and won and got to open up a window and get the experience. Take us to Germany, because one of my questions when I was reading this, I'm like, is this really a business? Take us to Germany and what's been going on there?

Right? So much of this airship pioneering was done by Count Zeppelin in Germany, a person, and he's left his legacy. Oddly, a bunch of intellectual property that that he came up with ended up as the fuel of like an aerospace and automotive empire in Germany. And the foundation behind this intellectual property donates millions of dollars to the city of friedrich Schaffen, where I went, and they have they fund

The way you did it.

I did it. I did it. I did it for the story and for Hello World by TV show, So you know, you it's very different to a plane or a helicopter, which which can take off quite violently and suddenly you just kind of slow glide up and then you're you've got some propulsion from these propellers, but you're also at the mercy of the wind and you just kind of bob around and there's no air pressure like in a plane where the cabin is pressure, so you could just open the window. You can stick your head

I was gonna say, how many times did they ask you to put your head back inside it? Sir?

Could you put your head back in?

I think our whole Hello World crew was left and every eye this huge smile of my face. I liked. I liked the window thing.

So where does it go from here? There's there's gonna be this unveiling, uh and what comes next for LT A lighter than that.

It's a pretty cool part of the story. I think, you know. The one hundred years ago Goodyear was the airship king in the United States, and most of that took place in Ohio. Sergey Brinn has actually his company, his family trust has gotten taken over the old Goodyear air Dock, which is a huge hangar in Akron, Ohio. And that's where their next vehicle, which is called Past Finer three for some reason they just skipped past find or two, is going to come to life at this

So you got to talk to him about his interest here, right.

I wish figure Ferger saw my first story. He told me that he enjoys my writing, but that he didn't want to talk about his airship. And that was about six years ago, and I frequently asked him he knows, he knows I've been in there, he knows I've been talking to Al. He just does not want to comments about the airship himself. And so so it's kind of been me talking aw lesson about Sergey's motivations and then and then talking to a bunch of employees there. I'm

Well, there's a lot of money that he's put into this thing, and so I'm wondering, you know, like, what's in it? What's in it for him?

Part of it? I think he really does do all this humanitarian stuff. I think that's part of it. I think he really does just want an airship. You know, everybody's got a mega yacht. Not many of these billionaires.

A rocket or something like that, yeast the rockets, Like, uh, you know, is this how does this compare with the rocket?

Do you think?

Well?

I mean it's it's similar in terms of sort of the scale of this and the cost and the time it takes. The mega Yeah, I think you roll up to the party and everyone's showing picture of their rockets or their lega yachts and you're the only one with the airshipt photo. That's it's it's the claim to say it.

Is true barely if you're going for just like number of crazy things that can go in the air, fewer air airships than there are rockets, right, Yeah.

But you know, I think this is this is like the worry. So many people are really in the airshifts. They've seen a bunch of startups coming go. It always ends up costing more money, and so people are excited in this field, but they're really concerned that Sergey loses interest as this just keeps costing.

But once he goes up, right, that's going to change everything. You'll have his head out the windows. You know, he's going to double down on it.

I think that's the hope for the guys at LTA is just falls in love with it all over again. This has taken a number of years longer I think that he expected, and it's up over two hundred and fifty million dollars, probably quite a bit above that. That was the best figure I could get. And yeah, you know, so, I'm sure he wants to see a bit more progress. But he has acquired this facility at Ohio and and is pushing on.

Are there dates like on the calendar, like there's going to be some big press conference and we're going to get to see a launch of it or I'm just curious, like kind of what's on your radar of what's next from the company and from them.

Yeah.

Absolutely, so I've seen it. I've seen it flying as such as you can in a hangar. I mean, this hangar is giant, so it could kind of bob around. But in early June, after our story runs, I'm sure LPA is going to put out an announcement to invite some other press to see it come out of the hangar for the first time. It doesn't immediately soar or anything like that. There's a lot of ground testing that's going to take place over months. It's got to get

All right, I'm just going to get a little teaser. There's well, I don't know Al Weston in a gorilla suit, but maybe people have to check that one out. It's a little bit of a rumor. This is really fascinating when we think about kind of where things are going to go and how things are moving around. You know, Ashley, You're always on it, so thank you so much for sharing this with us. Ashley Vance, of course he is.

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So about a week ago, Bloomberg News was that with a story. It was about how airlines first class makeovers are giving the rich hotel rooms in the sky. That means carriers are investing billions of dollar to upgrade cabins. They've got sofas, double beds, TVs, desks, wardrobes, mini bars, and in some cases Matt Miller walking showers.

That's awesome.

I know it.

I think that right sign.

It's like your flight. You're gonna take it out over the weekend, right.

Yeah, No, I'm flying to Detroit over the weekend and it'll probably be on an incredibly uncomfortable narrow body jet in coach.

Okay, sorry about that. Well listen. If that doesn't cut it, though, these upgrades that some are enjoying in first class, you can always buy your own private jet, including you, Matt Miller. So let's get into that with our next guest, Janine Janarelli. She is founder and president of par Avion. It's an international business aircraft sales and a marketing firm, and she joins us once again on zoom in Houston, Texas. Jannin, nice to have you back here on Bloomberg it's been

Settled in well. The term that you're hearing off used among the trade is a return and normalization, and it certainly feels that way now that we're through Q one and well into Q two, as compared to the last two years. Whereas in late twenty one and all of twenty two we were saying, who knew a pandemic could

So is that because I mean, I guess during the pandemic, if you had enough money to fly not just privately, but more importantly separately from everyone else, you did that so that you wouldn't get sick. Now maybe people are less worried about that and willing to you know, as Carol said, you know, airlines, commercial airlines are putting your own room on the flight, so you might as well, just take that instead of buying a G five fifty or whatever it is.

Well, there's still a huge difference between commercial airline travel and that of flying on your own aircraft. I mean, let's just talk about the convenience. First of all, there's not necessarily a deadline by which time they're going to

Sorry, no, well you don't want to jump in because I am curious. You said normalization pronounced slow down. I am curious what that means in your business? Is it down fifty percent? Is it down forty percent? I mean, I'm looking at your website.

You know.

What have I got here? As Cessna citation, a Bombardier Global seventy five hundred. You're talking about planes echo for what tens of millions of dollars? Hundreds of millions of dollars. These are not inexpensive items. And I'm just curious, what's a slowdown in this space look like?

Well, you know, slow down is probably let's talk activity. Whereas before you could even get the airplane the market, you had a ready buyer for it.

It was gone.

The advertising was just done to sort of serve as a means by which to get other people to call in. Today we are now seeing lead times where I should say, bring the air have to market and you're going to sit on the market ninety one hundred and twenty days on average With most of the aircraft. I would say the flight or the decline and activity is being felt at the top end for sure, as well as at the entry level. The two to seven million dollar business jet that people jumped on a in a panic, in

Right, that's all gone away.

By the way, in terms of you know, owning a private jet and using it, how many people actually fly their own Do you have clients like that?

A few, but very few. That is the small percentage of the entire let's say ownership pool that actually pilot.

Their own aircraft.

So or at least in the category the airplane I work with.

So, what are the hottest ones that you sell? What's the private jet? If I, you know, have some liquidity event and I'm all of a sudden holding a billion cash, I.

Come to you and say, can you sell your bitcoin?

Yeah, Jennine, give me the hottest IT jet that you've got. What's the one that everybody wants.

I've got Global seventy five hundred that you're taking a good look at. If you come into a billion dollars, that is the aircraft for you. You can go anywhere in the world quite comfortably. But the other side of the it jet, let's call it an IT sector, is the mid size super mid size popular airplane, perfect size ideally suited for continental US travel, and the charter operators love it.

You know what I'm curious too about I think the last time we talked, and again it was a few few years ago. I think cross border was a big thing for you. And so we're entrepreneurs. Who is buying today? And I'm curious entrepreneurs maybe think Silicon Valley Bank or slow down if that's had an impact.

Well, Hexcector certainly has seen a slowdown and decline of inquiry is coming from that particular industry. But entrepreneurs are still my sweet spot. And remember there are entrepreneurs doing many different things, and one market declines, another one rises, one industry declines, and other rises. In the aircraft sales world, we make money coming and going in economic cycles. As far as the cross border that's starting to pick up but still lagging behind demand within the United.

States, Janine, what if I only have, like, I don't know, fifty sixty million bucks, but I have a few friends with fifty or sixty million bucks? Do you recommend people going in on a jet or where do you steer someone away from that idea? I mean, does it really make sense to buy your own jet? Isn't it better to be able to lease it?

Out occasionally, Well, what you buy is driven by your need. For sure, how many hours per month you anticipate you'll be flying, what's the distances you're going to be traveled. While partnership in aircraft is not uncommon, it doesn't always work because you have conflicting needs or conflicting schedules. So if you had three friends and each of you had

You know, I do wonder too, Jinny, like there are weird, kind of weird things that we sometimes look at for global economic indicators, and I'm curious about what you are seeing in your business as it says to you that a recession is on the horizon, or how would you describe kind of the economic outlook the big R word.

So that's obviously been something that's been discussed within the trade for oh since the middle of last year, because we know it's looming. An economic cycle is inevitable, and we've been through a boom period in our business, and I would say that business jets historically have been a pretty good leading indicator of things to come. I think the waters are a bit muddied at this time, that

I hear you. I think about that all the time myself. Actually, what's that you know, if we drop just back to twenty nineteen levels, is that bad? Or is that a win? We've gone through this incredible pandemic. You know, well, it doesn't seem like it's such a horrible stat anyway. Janine great having you on. I always love to get a check on the private jet industry. Jeanine Giannarelli. They are founder and president of par Abr.

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It's the official, unofficial start of the summer. Our Bloomberg Pursuits team is back with its annual summer travel guide on this Memorial Day weekend, and we've got two great voices to help us put together in itinerary for a potential scape from the grind. Listen up. Everybody joining us now are Bloomberg Pursuits Editor Chris Rouser and Travel editor Nikki Eckstein. They're here to tell us where to go, what to do, and even what type of luggage to use.

So we covered travel all year round, of course, but summer travel last summer and this summer are going to be crazy. Everyone wants to travel. We're back to above pre pandemic levels. But when we put together this summer travel package, we're always thinking, Okay, what's different about summer travel, Like because you feel like maybe I get more of a break. People really aren't going to bug you while you're gone. I can go somewhere really far, I can

Well, and let's talk about it because I have to say and Chris that the Berkshires are so beautiful. I've got I used to go up there pretty regularly in the fall. It is stunning. So tell us a little bit about this story.

So Matt Cronsberg, who's one of our favorite writers, had the idea to do a walking trip story because there are these two books that came out about walking trips. One's called American Rambles by Neil King Junior and one's called Walking with Sam by Andrew McCarthy, the actor and wine.

What is the actor?

Yeah?

Sure, okay, And.

Matt called up Andrew McCarthy actually and said, what do you have any advice? And Andrew McCarthy's advice was just go, just go, just go. Don't think about it, just go, he said, must have said it ten times in four minutes. And so Matt called us and said, okay, I'm going to go and we and NICKI can tell you, like how we kind of figured landed on the Berkshears.

All right, so NICKI, come on in. How did he land on the Berkshires?

Yeah? So Matt was like, I want to do a walking trip. I'm inspired. I've read these books. I'm drinking the kool aid. And I was like, right, Matt, where are you going to go? And he said, well, maybe I could do something in your Washington d C. Maybe I can do something in California. Maybe I could do something. And you know, the whole board was wide open to him, and I said, okay, let's figure out what the route

Everybody's ears perk up, ice cream, wait ice creams down the tour. But it is it is like, I feel like one of those areas in the country. Especially it's not that far from New York City and you can kind of breathe once you get there. Talked to us about some of the places that Matt and his wife visited, well, can.

I tell you one place that they didn't visit. They didn't live in an air which to me is like thinking about just thinking about Memorial Day coming up, and there's like the staff that is lodged in my brain right now that seventeen million people are going to be in US airports this weekend. But he did not go through an airport. The places that he walked through were these beautiful country roads and he walked into this like little itty bitty town called Lee, where he found a

It's so beautiful and I highly recommend everybody check it out the pictures and there's so much detail. I also love that there was one point after a full day of walking and they're like trying to figure out dinner, and he's like, let's walk a little bit more, let's.

Go find dinner.

Three miles to dinner.

Right Like, it was kind of well, all right, let's move along to Majorca. Am I saying it correctly. Yeah, okay, that's cool. Tell me what's going on there, Nikki when it comes to because it feels like it was an area where people would go to party big time, but it's kind of going through a little bit of a change.

So have you been to Myerica, Carl, I have not been to Majorca. You have not, Okay, put it on your list. Okay, is one of the most beautiful places I've ever been. And it's true the majority of people who've gone to Myorca in the past, like totally dominating their tourism scene are Europeans, Brits, Germans, people who are

It looks stunning. I do like the idea too, that the government, as you said, like limiting the number of cruise ships, limiting the number of drinks that folks can have, just to kind of give it a certain feel. I want to spend more. I'd love to spend more time on it, but I got to go to because you guys wrap up with glamour on the Jersey Shore, which kind of breaks my heart a little bit, but because

Yes, my in laws are on the Jersey Shore and Nikki lives in New Jersey. So we are we were, We are already fans. But there is a ton of development happening all up and down the shore, hundreds of millions of dollars a lot in Atlantic City. You're going to see Atlantic City coming back?

Are they really coming back? Because I can't tell you how many times we've done this story. I've gone down and done remoats there and you know, new hotels and casinos, and you know, and then we're people tried, Yeah is it this time around?

This feels different because it's not just one project at a time. It's a real amalgamation of developments. I mean more than a billion dollars have been pumped into Atlantic City in the last year. A billion, I mean more than a billion. It's eye popping. And it's a team effort really in Atlantic City between a lot of major players and also a lot of independence. And granted we didn't have time to go through every single development in this story, because it is the amount of news is tremendous.

And there's also you know, just to cover the rest of the sort all the way down in Cape May, they're doing a lot of development on the ferry terminal there. There's gonna probably be a big new resort being built in the next couple of years. Then further up in Bradley Beach, really cute hotel. Asbury Park has tons of great restaurants. I was just there, really cool hotels and there's just a lot. There's a lot of like Sheik stuff.

Happening well, and I think what's interesting, And I think what's interesting is it's not just about gambling or casinos anymore, and that's maybe the difference. Final thought, Go ahead, Nikki.

Yeah. Well, the funny thing that I kept hearing while I was there reporting the story was we're getting people from the Hampton. People are tired of the traffic for the Hampton. They want an easier place to go, they want a little bit more flesh.

I love it.

I love it.

People are slapping for the Jersey Harmon briving the Hamptons, for the Jersey Shore.

It could happen. It could happen. And there's also a great piece on different types of luggage if you're planning holiday or business travel. Some different choices for everybody, So I highly recommend everybody check it out. All right, thank you, guys. Bloomberg Pursuits editor Chris Rouser and Travel editor Nikki x Stein with our guide to summer travel. If you're listening to Bloomberg Business Week, coming up more on summer travel and why globe trotters can expect the busiest and most

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All right, so we've talked a little about retail, which gives you a great idea in terms of what's going on in the consumer world. Another thing is travel, and it also tells us kind of what's going on in the economy. So let's get to it with Haley Berg. She's lead economist at the mobile travel app Hopper, and she joins us on the phone in New York City. Hailey, good to have you here. Tell us what you are seeing when it comes to the travel industri As we head into the summer travel season.

We're headed into the busiest time of year for travel, and really we're expecting this to be the biggest summer for travel since pandemic. International travel has completely opened up since last year, and domestic travel remains very strong, especially as prices are down about twenty percent from this time last year. All in, it looks like it's going to be a busy summer and an extremely expensive summer for those travelers who are headed abroad, but they're not being held back by fares.

Yeah.

We actually heard from Jen bartashas we were talking to our Bloomberg Intelligence retail analyst, and she said, you know, middle class to wealthier people are shopping for food at cheaper stores so they can still afford to spend money on discretionary items. I guess travel is one of those You don't see anybody holding back. I mean, is nobody balking at the incredibly high prices.

What we're really seeing, Hopper is travelers are taking that same or a slightly larger travel budget and trying to stretch it further. So maybe previously they've been taking one trip a year, Now they're taking two trips on the same budget, So that means they're engaging in deal seeking behavior. You know, more than fifty percent of our Hopper customers are booking the cheapest flight that's available to them at

So talk to U about some numbers, Bloomberg. We love to hear about numbers and percentage changes. So give me an idea. If you're heading from New York over to Europe, pick your city or whatever. What are we looking for in terms of airfares.

Average airfare from the US to anywhere in Europe about twelve hundred dollars right now. There are some destinations direct from New York City as low as eight or nine hundred dollars round trip. But overall that twelve hundred ticket price on average, that's up thirty seven percent from this time last year, and in twenty nineteen that's about three hundred and twenty dollars more per ticket for travelers who are headed to Europe, which is the top destination for summer vacation.

AH, where are they going in Europe? Is it just in general the continent, or are people going specifically to Spain or Italy or Greece Paris.

We typically see London, Paris and Rome are the top three, the ultimate trifecta. They're definite destinations for tourists who are just dipping their toe in Europe. But we do also see demand some of these smaller cities, especially in Italy. Sicily is popular coming off the success of the White Lotus, but we've also seen Venice and Milan are.

Saying, right, White Lotus, it's really a thing in terms of travel.

It absolutely is.

We call it set jetting. It happened with Croatia and Iceland win Game of Thrones was released. It's happening with Yellow show.

In White Lotus. I'm just saying it was a little eerie.

It's great though I love both seasons. I will say pro tip to those looking to travel to Europe over the summer. It is extremely hot in southern Europe. If you want to go to Sicily in August, I don't want to be with you because you are going to be pouring with sweat. I would much rather be in Scandinavia in August because so hot. The Spaniards don't even go outside. They just they just sit inside and sleep all day and then at night they go in the pool.

That's why September and October actually the best bet for travel to Europe. You'll pay as much as thirty percent less than you will to go in June or July. Temperatures will be better. And keep in mind Americans are on vacation all summer. Europeans often go on multi week vacations in August, so if you're going in August, you're going to be facing crowds of tourists from around the world. September is going to be lighter crowds, less expensive for accommodations and airfare.

So what's your advice for folks who want to travel?

Plan ahead if possible, So right now you're booking way too late. If you want to go somewhere internationally this summer, you are going to pay quite a bit more and

What about airbnbs, what's your verdict on You know, we went to Austin for the Moto GP a couple weeks ago, and hotels were like a grand We found an airbnb that was less than half the price and it was pretty good. I mean, they no one comes to change your sheets every day, but it was nice and you know, with the extra money we were able to go to more expensive restaurants for dinner.

We can send you red homes extremely popular, especially around destinations at the beach or Disney. Disney's hugely popular for vacation homes. Often larger groups of family members are there and it really helps bring down the cost of maybe getting multiple hotel rooms. But keep in mind that those rental homes can book out really far in advance, especially in popular destinations, and hotel rooms on the other hand, drop in price when you book at the last minute,

All Right, we're gonna leave it there. We're'll let you go get some water because I'm a little worried about you. Hailey, come on back soon. We'd love to continue with you at a future date. Haley Burg Lead economist Different Hopper joining us on the phone in New York City.

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