Broadcasting live to New York, Bloomberg eleven to Washington, d C, bloom to Boston, Bloomberg twelve, to San Francisco, Bloomberg nine six to the country sis XM Channel one nineteen, and around the globe the Bloomberg Radio plus append Bloomberg dot Com. This is taking stock. Do you know what the biggest unknown for hotel reads here in the United States is now? According to our guests coming up on taking Stock, it's inbound international travel implications inbound into the US that is
following the Brexit vote. I'm Kathleen Hayes, my co host Pim Fox on vacation this week, and I'm sure he loves travel. He's very sorry. I'm sure that he's missing David Loebs, senior hotel industry research channelist from Robert W. Baird and Co. In Milwaukee. David was also going to talk to us about summer travel what that means for some of the big reads and hotel chains. Let's get to Catherine Cowdrie now she's in the Bloomberg newsroom with
a Bloomberg business flash. Thank you, Kathleen and Bloomberg. Taking Zoc is brought to you by National realty providers have one satisfaction guaranteed New York City Realty Investments see them at n r I a dot net. This stock market is climbing for the first time since Britain voted to withdraw from the European Union. There's speculation that policymakers will take steps to limit any economic fallout. Investors are also encouraged by some US data. Consumer confidence improved in June.
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It's far too earlier, earlier to talk about the dust settling after the political earthquake caused by the UK's vote to leave the European Union, but already people are saying that there are important industries and companies that will be affected. David loebe joins US now. He's senior hotel industry research analyst at Robert W. Baard and Co. In Milwaukee. He covers hotel rates and he says there could be some very powerful effects fallout on these rates after this big
Brexit vote. David, welcome to the show. Thank you glad to be here. So hotel rates are going to suffer. Why because there will be too many people working on the Brexit and what it's going to mean. Because the city of London will be hurt, and the kind of people with the money in their could just hop in a plane and go on a business trip or even a vacation are not going to be doing it. I think the biggest impact on the hotel industry, both on the hotel brands and on the hotel roots, will be
because of the changes in the value of currency. So if you look at the drop in the pound for UK travelers looking to vacation in New York or come on a business trip to anywhere in the US, it's much more expensive today than it was last Thursday. That
I think is the biggest direct impact. I think we will also see secondary impacts with businesses cutting back on on what are essentially the easiest variable expense to cut, which is business travel, until they understand the economic implications of this boat, what the timeline is likely to be,
and how it may directly impact their business. So give us give us even you know, hold that thumb up screen your eye, just even some rough sense of how much travel from Europe or even more broadly around the world. Because again, if I'm a business I could have an office in Shanghai, same thing. I could still feel like, I gotta wonder what's going to happen with the Brexit, what it's going to do in my company? How much?
How much is that a part of how the reds and the hotels that are in those reds are are doing business with these important parts of the world. Well, I think you're you're absolutely onto something here. We live in a global world, and there's a lot of travel from all regions of the world to all other regions of the world in the in the US, it's not just inbound travel from the UK or from the EU.
It's traveled from everywhere and within the US. So I think businesses that are are focused on global markets are reassessing or pulling back, are stalling their decisions. That doesn't mean I'm calling for a downturn in demand. We've already seen a slowdown in demand for hotels, but I think it will take a while before we see exactly how
this how this plays out. But I think there will be there will be domestic implications as as companies look what this means to their business, and as they slow down and reassess, they will send fewer people on the road, whether that's going from Cleveland to Washington, d C. Or from Paris to New York, and those those cuts will have some impact on the industry. I just have to
ask you slow down in demand. Uh the shutting down the Waldorf Historia and I'll granted an older hotel, but uh, you know, gosh, just one of those look at books, look at movies. The Waldor is such a big part of New York City, Manhattan a condo rebuild? Uh is this? Are they a hotel that was out of step with the times? Or why didn't somebody step up to say no, no, no, I'll buy it. Maybe I get a better deal. I mean, I get it a little bit cheap and and fix it up and restore to its gloria and make a
lot of money. The Waldorf is an iconic hotel, There's no question. It also sits on a full square block on Park Avenue right near Grand Central Station, a fantastic location, and I think the opportunity for the owner to put condominiums into that building is just so much that it offsets the fact that that it's such an iconic hotel. It will come back as a hotel just as a much smaller hotel, perhaps five or six hundred rooms, less than half of what it was before. So uh, it's interesting.
That's that's the supply side of the equation, and New York has seen a lot of new rooms and taking some rooms out for three years and then permanently for more than half of those rooms will certainly have a slight positive impact on that market. But I think the remaining rooms will be more representative of the iconic stature of that hotel than a lot of the rooms that are exist today in that building. Okay, in a nutshell, final question, summer travel, what are you seeing? What's important
of you? Already seen a bit of a slowdown on demand. What's gonna happen this summer? Well, leisure travel is a real bright spot, and the second bright spot has been grouped, although even group is showing some signs of of corporate cutback. So I think your your news broadcast mentioned this crushed to join the t s A pre check program. Airports are busies, busy, airlines are busy. I think hotels that cater to leisure travelers will be very busy this summer.
Group activity is looking actually very strong this summer. The big wild card that on that is corporate transient travel, and I think that will be a little bit slower. So net and now we may be flatish or slightly up this summer in terms of hotel occupancy, but I think particularly at national parks and tourist sites. All right, thanks so much to David Loeb, but senior hotel industry research analyst at Robert W. Baird and Co. He's based
in Milwaukee. He says that there could be a reduction in inbound foreign travel to the United States a lot, because you know what your currency tanks. That makes it a lot more expensive to buy a plane ticket. I'm Caffeine Hayes, and this is taking Stock on Blum Radio. Coming up on taking Stock Peter Cheer from Brain Capital. He's going to tell us why he thinks maybe the worst outcome from the Brexit vote is what could be facing the stock market.