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Get back to the markets here.
The big economic news of the day was the retail sales, and they generally came out I think across the board stronger than expected. The headline zero point four percent, consensus was zero point three for growth and zero point one percent last period, so big pick up there. When you look at the control group, perhaps even more impressive zero point seven percent gain versus zero point three percent forecast and last month was zero point three percent, So again
pretty strong across the board. Let's see what it means to some of the folks who really follow the retail business closely, as does our next guest, Mary Shore, Senior Equity anams A Columbia thread Needle, joining us from Boston via Zoom. So, Mary, just to my untrained eye, these retail sales numbers look pretty good. What do you think and what are you seeing in the retail space these days?
Yes?
Thanks, for having me back. I think you're right.
The strong September retail sales print confirms that the consumer is in good shape amidst a relatively strong jobs and income backdrop. To your point, there may have been some benefit this month from pre hurricane stock up behavior, but overall the growth remains very healthy, as we've been talking about for some time now.
However, when you.
Dig deeper, you continue to see pockets of strength and weakness.
So areas of strength.
That I would highlight would be food, health and wellness, clothing and value, which I think is really incorporated in that general merchandise category. And then some areas of weakness to call out would be autos and some of the bigger ticket categories that we're strong during the pandemic, like furniture and electronics. So when I look at the data, I think it shows the consumers in good shape, and it really is a continuation of a lot of the trends that we've discussed in prior episodes.
It's interesting. I mean, obviously this data does show that the consumer is in a good spot, but of course people are still complaining of this intensely high inflation. How do you think that this really fits into the broader economy and as we think about things moving forward, well, I think.
It's exactly what we're seeing in the data. We're very high level, we see low single digit growth, But then again, when you dig a little deeper, you see services growing faster than goods, and within goods, you see needs growing
faster than once. And so to your point, the inflation that we've seen in food and housing in particular really continues to weigh on consumer discretionary spend on goods, and I think that is a real key reason for some of the continued weakness in some of those bigger ticket categories that I just highlighted.
Mary, what are the retailers that you cover?
What are they saying about the holiday Christmas season coming up such a big part of their annual sales?
Yes, I think you know, as always they're cautiously optimistic. You know, they're optimistic by nature, but given the macro backdrop, I think everyone is planning their business very conservatively. They were being disciplined on inventory. I expect promotions to be very well controlled for that reason. But overall, I do
think it will be a strong holiday. What we've seen this year is that during key events, the consumer does come out and shop, so I think, you know, we will see real strength over Black Friday and the week before Christmas, and probably a lull in between those two shopping periods as we've seen in the past. So overall, I would expect a strong season, but still a little lumpy when you're looking week by week.
So Mary, talk to me about the sentiment as we're thinking about things heading into this election. Of course, we're less than a month away. How are consumers thinking about this and businesses as well?
Right well, I think whether it's the election or the direction of gas prices, what most of the companies that I talk to say is it's really the uncertainty which is more paralyzing for the consumer. So I would definitely expect some noise, you know, right heading into the election. But either way, I think that the results of the election will provide that certainty to the consumer and probably
boost consumer sentiment going forward. I think what it means for the companies could be more mixed, Like if Trump does continue talking about his tariff policy, then you know, that could be an overhang on some of the retailers that import from overseas.
But I think overall, just the results of the election.
In gaining that uncertainty will be a positive thing for consumer sentiment going forward.
All right, this Christmas shopping season, how promotional will the retailers be? I know that goes right to their profit margin, but how do you think that's going to shake out?
Yeah, you know, we talk a lot about promotions versus markdowns. You know, the retailers know they have to be promotional to drive traffic, and so I think you should expect to see controlled promotions. So what I mean by that is, you know, promotions more in say the thirty percent range, and given that inventory is well controlled, I think the retailers will try to stick to that plan for as
long as possible. I would not expect to see promotions in like the seventy percent range and markdowns, and that's typically what you see when the sales are a lot weaker than planned or the inventory is a lot heavier than planned. And I don't really expect either of those
things this holiday. So you'll still see those headline promotions, but you have to remember that the retailers have planned for those they bought into them, and so there's really no negative margin implication from some of those headlines.
Well, we think historically and then moving into this year, how do consumers really think about the holidays when we're thinking in this season, is it everyone's just going to throw everything on their credit card because we have the holiday cheer? Or do you think they're really going to be targeting those companies that are those stores that are offering promotions specifically.
It's a great question.
I mean, I think we do see the consumer come out and spend around key events, and you know, especially in a year that could be tough, you're feeling the pinch of inflation, every consumer wants to bring a little cheer around the holidays. So I do expect that they
will be out in the market. Having said that, I think they're still going to be very discerning, very focused on value, and I would expect a lot of the value players, as I mentioned in that general merchandise category to be the key beneficiary.
All Right, Mari, thank you so much for joining us.
Mary Sure Senior ecuadanams a Columbia Thread Needle Investments up in Boston, always helping us out talking about retail sales.
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Let's switch gears.
Let's get back to the markets here technology in the play here yesterday, I think it was me who said I think I've seen the top of AI.
I think some of these chip.
Companies are going to roll over and blah blah blah blah. Well then Taiwan Semiconductor comes out with a better than forecasted outlook. So once again I was proven wrong, particularly it relates to technology.
I don't know what's going on.
How do you feel about that? How do I feel about that? It lasted all of like twenty four hours? My great call there, Man Deep Sing he's the extra, He's the one we go to. Man Deep Sying, he's the tech ANAMST for Bloomberg Intelligence. So Mandy talks about Taiwan Semi Contector. A lot of our listeners, a lot of reviewers not really familiar with it. Tell us about what this company does and kind of what they announced recently.
I mean, basically, they are the manufacturing factory for all your AI chips, all the chips that go into smartphones, and basically they are at the leading edge of manufacturing. When people talk about you know chips, the most powerful AI chips with the most transistors, they are the ones who are manufacturing it. And look, I think it was quite a contrast between the ASML print and the TSMC print, and what it shows you is the AI side continues
to be strong. In fact, they called out smartphones being as strong in market as well uh in the print. So clearly the top two segments for them are working quite well and they have more demand than they can manufacture. These chips for Nvidia and Apple, those are their you know, top customers, and they're raising their capex guide. So one of the concerns was will TSMC raise their capex guide given what we heard from a SML, Well, guess what,
they are raising their capex guide. So a SML's woes were really driven by Intel pairing back and Samsung pairing back. But when it comes to TSMC, they continue to be strong, all right.
So Taimewan Semiconductor does a trade in US or eighty rs in US.
The ADRs are the ADRs trade in.
US t SM as your tickle put InChI. Bloomberg Terminal stock is up eleven percent today, up one hundred percent year to date. This isn't a penny stock. This has a market cap of over one trillion dollars. My ignorance level on this is out of control. I mean, I just didn't know they were that big.
I know, when we're compute, the number's two big.
No, it's too big.
That's why we need man deep sink. So anyway, big company folks. Giving a positive outlook on the chip business really important for overall tech discussion about AI.
So talk to us about the outlook right now? What are expectations when we think about the tech sector more broadly? I know earnings people have a pretty low bar, so if companies are doing well, it'll be a really great, you know, great news coming out of that. How is the tech sector when we're looking at AI specifically, what are expectations right now? I know the bar tends to be relatively high.
I mean, I don't know if the bar is low at this point, given what we saw with THEML ASML was the case of expectations being too high and they guide it to that. And now they come out, you know, this quarter and say we are taking down bookings by fifty percent. So clearly expectations were high. It was the management who said it, and now they took back their guide.
In the case of if I think in Video or some of the other bellveather for AI, look, we've been hearing that the demand for their latest chip continues to be strong. The TSMC print is another validation that you know, they are ramping up the AI side. It's almost mid teens of their revenue. This was almost a zero billion, a zero a dollar revenue for TSMC a few quarters back. So in just the span of three four quarters, it's
mid teens of their revenue. That just goes to show along with the margin expansion, the gross margin growing to fifty eight percent. I mean, all this is positive for AI and you know for bell Weathers like Nvidia at the same time, this will drive up the expectations even further. So you know, the bar keeps getting higher, and at some point I think you will have missus like what we saw with the SML, but probably not that soon for the likes of Invidia.
So thirty secondsleft, who are the top two or three or four buyers of these chips. Is it the Microsoft's and the Googles of the world.
I mean, in the case of TSMC, the top buyer is still Apple. Okay, so that validates that smartphone to refresh that everyone is waiting for that segment. Did well. The inventory is building up, and then Nvidia and and Nvidia continues to become a bigger buyer of tsmcs. And then you have got AMD and some others. But pretty much every fabulous design company, whether it's AMD, Qualcomm and VideA, goes to TSMC for you know, manufacturing their chips because
they have a leading node monopoly. I mean, everyone else is way behind when it comes to.
Son Go to Taiwan and see Taiwan and see them make chips.
Yeah, you should visit one of their factories, the one in Arizona though.
Yeah, they're gonna do one in Arizona. Yeah, okay, that's cool too. All right, Mandy, thank you very much again.
As always, he is our absolute goat to persons for all things technology. Senior Technology aannels. He runs all of our tech practice at Bloomberg Intelligence, and we appreciate getting his time because he's only a floor away.
It's not like a big ass. We love that, and you walk.
Up the stairs and talk to us on Bloomberg Radio, man Deep singing.
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I don't know, did retail sales today nor better than expected? Maybe maybe the FED doesn't have to cut in November. And if they don't, is that okay? I don't know the markets are creating car here. It looks like it's kind of okay. Let's talk to somebody who's actually has a professional here on this whole thing.
David Kodluck. He's a founder, he's a chief executive officer.
And he's a chief investment strategist. I think that means he's the boss.
It sounds like it.
That's right, mainstay a capital management from one of my favorite little towns out there in the Midwest, Troy, Michigan.
I've been to Troy, Michigan. Cool little town, David.
So you get a retail sales number today that's better and expected, you get some still a pretty strong labor market. Is this a FED that has to cut and if they don't have to cut in November.
Is that okay?
Good morning, Paul and Nora. I think it's a FED that will continue to cut. They'll continue to ease because monetary policy is more restrictive than it needs to be.
Inflation has come down there.
I know there's fears that we could see a resurgence of inflation here yet this year into next year, but inflation has come down and is drifting towards target. Certainly it is in Europe the ECB cut last night. The key here is that when we look at the economy and say, I think it's you know, what's interesting is do they need to cut for a recession? No, those that have been calling for a recession for the last two years have been dead.
We're wrong.
We've kind of mocked this by my phrase the recession is always six months away. That have actually been saying for two and a half years now. And yeah, retail sales came in above expectations, four tenths a month over month versus three tenths.
We've got strong.
GDP Atlanta gb GDP now forecast above three percent, uh, labors hanging in there, and so we've I always I always am careful to use the word goldilocks economy, but we sure, you know, if there's if there's such a thing as a Goldilocks economy, we're sure close to it
right now. And the Fed does have the ability to continue to ease as other central banks are around the world, just because you know, we we don't uh, we're in that sweet spot where they can make monetary policy a little less restrictive.
So tell me, David, which economic data is most paramount right now. I know we've always had our eyes on inflation, but it seems as though attention is really shifting toward employment data as being more important right now. What's your look your out look on that?
Yeah, that, Nora and I agree.
It's really it's this, when we look at employment or labor versus inflation. You know, where are we and we see inflation drifting down? We think that's becoming a more non existent problem. We keep getting mixed data on labor. You know, there was some screwy numbers in the back months that had to be revised. But you know, if we if we we want to keep an eye on labor.
We want to keep an eye on the consumer being two thirds of our economy, so we need labor to stay strong enough but not too strong and not get weak enough that they're cutting, you know, for the reasons we don't want, which is the fear of a recession. And we think the you know that the fears of a recession, you know, they're just there's anecdotal data there. You know, what's happening with car loan delinquencies, personal debt, credit card debt.
There's that anecdotal data.
But when we look at GDP, we look at labor, we look at inflation, we look at retail salesman. You know, we've we've got when we look at the macro numbers, we've got an economy that keeps chugging along, and correspondingly, a stock market that keeps chugging along.
Again.
The people that have called for a bear market anytime over the last two years, they weren't early. They were just wrong, dead wrong. And you know, we're still constructive on stocks. It always looks prudent, right, It always looks prudent or smart to say a recession is right around the corner, or bear markets right around the corner. But it's key to these people that have been saying this for so long they're dead just been wrong.
So David, how are you advising your clients now versus maybe this time last year?
We're you know, all that said, we're always concerned about when when the next shoe will drop or you know, when when the first shoe will drop or the next shoe will drop.
We are concerned about that.
So that's why we're keeping an eye on the data that were talking about here on does it is inflation on a glide path down to the.
Fence target we believe it is.
Is you know, uh, do we still have though a robust economy or we headed towards recession?
We don't think so. So Uh.
We continue to be very constructive on the markets. We're over overweight equities. We've changed our term structure on our bond holding somewhat. We were last year in the first part of this year on the shortest end of the curve, just capturing yield, uh, rather than any kind of interest rate player anything else. Because duration has worked against you, uh, we think there's an opportunity over the next year that
duration will help you. You can get that capital appreciation combined with the yield on your stocks, clip the coupon and enjoy some capital appreciation. But I think my strongest recommendation is, uh, you know, these all the naysayers, all the doomsayers, the pundits that are you know, collapses eminet. Look, they've been wrong, and so we're very constructive on the markets. We're bullish on the market's near term. We have an election coming that we'll get out of the way, so
that removes some uncertainty. And we're heading into the seasonal period that's strong for stocks from November through April. So you know, there's a lot of economic seasonality and other factors that are good tailwinds for equities right now.
David, you mentioned the election nineteen days I think coming up or very close here.
What do you tell your clients about it?
I mean, is there any way to election proof of portfolio or don't worry about it?
Well, unfortunately, and not our clients, because we educate our clients about this a lot every election cycle. Don't election proof it by going to cash. That's the worst mistake that investors make because look at this, look at this election like others, how polarizing, you know, between the two candidates. You know, if so and so gets elected, we're going to heck in a handbasket in the same thing for the other candidate.
And there's all this.
The reality of it is is the biggest factor for the market is uncertainty. Markets had uncertainty that will be determined here in three weeks. So the key is don't go to cash, stay invested in the market and as we see who it looks like will be what administration will be in office here in a few months, that's where that's where we want to be tactically moving our portfolios to worst mistake is to go to cash. And look,
this year is a perfect example. We have the best election year through today for the markets that we've had since the nineteen thirties. That's how good this year is. It is not the time to be to go to cash, to wait on the sidelines until you see how it comes out. Right, So it's looking at where what do you expect with the candidate that will win, tactically allocating your portfolio.
For that and stay invested.
Yep, excellent stuff as always David Coodley, he's a founder, chief executive officer in Chief Investment strategist at Mainstay Capital Management, and David and his team are ranked in the top ten on Baron's Top one hundred Independent Financial Advisors in twenty twenty four. So we appreciate getting a few minutes at this time.
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Let's go to a really good story I today. I mean Blackstone.
You know they got like aa jillion dollars under management to Stock. They put up some good numbers recently, just today, stock up five percent today, up twenty eight percent.
Year to date, fifty two week high.
Some phenomenal performance coming out of the good folks at Blackstone. I want to break it down, and we do that with Paul Goldberg. He's Bloomberg Intelligence senior equity analyst. Paul, what is Blackstone and why and how are they executing so well? Just tell us what Blackstone is in your mind, and then what are they doing so well? Hi?
Paul?
Thank you for having me. Blackstone called themselves a juggernaut this morning, and they called in a press release themselves as sort of being a benchmark for the alternatives industry. They are in private equity, private credit, really one of the big private real estate investors. So all these businesses are, some of them doing really well, some of them are recovering from the kind of a lull in the last two years, and it's growing. They reached to one point
one trillion dollars. So that's the largest alternative manager out there.
Let's talk a bit of real estate. Of course, I view them as a bell whether I'm actually a US real estate stocks reporter, I'm curious how are people viewing Blackstone and a lot of its deals recently. Are we seeing more activity happening in that sector specifically?
There it is, and they very specifically alluded to it. They made a few very large ten billion plus deals this year. They see in the bottom and the real estate cycle. They also, I've seen private is being a bit more aeriosyncratic than the public markets. So it doesn't move necessarily in tend them. But as long as they see the bottom, as long as they are seeing a lower interest rate, trajectory that should be supportive in the
real estate space. The other thing is their real estate is quite unique, right, So when we talk about real estate and especially commercial, a lot of people think about offices and these kinds of things. For them, it's mostly data centers, infrastructure kind of real estate, multifamily, so different business. And in the data centers they have over seventy billion dollars of their one point one trillion just sitting in those data centers.
And I like to just take a look when I look at Blackstone. Stephen Schwartzman, the just the total Wall Street mobilis seventy seven years of age, co founder of Blackstone. He's got a net worth today fifty one point eight billion dollars.
That's puts them on.
Number twenty four in the Bloomberg's Rich List. Credit to talk to us about the credit business. Private credit business got about thirty seconds in upon.
Us all about the credit. This quarter was led by credit forty billion of inflows, twenty of them going into the credit. All the upside in fees and performance it was going through the credit and the growth of expectations a lot of it just in the credit as well, So very consistent with what we're hearing throughout the year and other managers as well.
Paul, great stuff, Thank you so much for joining us.
Paul Goldberg, Senior equityannas Bloomberg Intelligence giving us the latest on Blackstone.
B X is the ticker symbol, folks, so check it out. Check out that chart. Just amazing.
Bloomberg News is out the reporting here. Blackstone's credit arm is now its top business fueling profits.
They're in private equity, private credit, real estate.
So as Paul Goldberg was just saying, they are the biggest alternative asset manager out there. Just extraordinary. That's Blackstone and then there's black Rock. I mean, if these two were together like they were back in the day, I mean extraordinary. So just amazing. The private equity business continues, an alternative asset management business continues to be just one of, if not the best business on global Wall Street, and the Black Zone folks are at the top of that.
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Bloma Limits sitting and for Alex steel on Paul Swiney live here in our Bloomberg Interrectied Brooker Studio, and we're streaming the video thing live on YouTube YouTube dot Com search Bloomberg Podcast. One of the topics that Alex and I and the folks here a Bloomberg intelligence like to really keep a close eye on is commercial real estate and its recovery from the pandemic. And our good friend Abigail Duottle, she's been very good at helping us hook
up with some really smart people industry. Abigail doo Little joints us here today, chief market correspondent for Bloomberg News, and today she brings us Josh Ziegan, managing Princil, co founder at Madison Realty Capital. They're on BLO and Briginner Act the Broker Studio. Josh, we appreciate you coming in here. Abigail, Thanks once again, Josh.
Commercial real estate.
I think what I've learned is I don't ask the dumb question which I usually do, which hey, how's commercial real estate doing? Because there are so many different pieces of it. Where do you guys at Madison Real team focus and then how's your business?
So we're focused on the real estate credit space. We started the company about twenty years ago. We've about twenty one billion of AUM and all ends of real estate credit. A lot of our business is focused on where the banks have not focused and we're dislocated post global financial crisis and even more so today post banking crisis that happened in twenty twenty three. So we've been providing capital,
whether it's construction lending, transitional lending. We buy performing non performing loans, and today the market is a lot better than when I was on in the spring. There's definitely a sense of the want to do deals. The investment sales market has picked up given the rate drop that happened in September. A lot we're waiting on the sidelines
just to see that happen. So mentally, there's this sense that things are starting to improve and capital markets are in a better place, albeit the banking sector has not come back in a big way.
So you joined us in May, and at that time, I would say were one of the more bearish commercial real estate. I guess that we've been fortunate enough to interview and I view you relative to some of the other folks as really close to the banks or really close to the money. You were talking a lot about the banks and you said that we were in the early innings of this thing working out. How much has it changed since then with the FED cutting by fifty basis points.
Well, I think what we've seen is in the spring, there was very very little activity investment sale market, and one of the problems was money was not going back to investors through that because no transactions were happening. So with rates dropping, I think what happened was that created some solutions for barwers who needed to delever, and that is in the form of preferred equities, some structured equity
coming into deals. Today there's not only that solution available, but there's also commonect equity and you're starting to see more sales. Albeit the office sector is really struggling still. There's no liquidity in the office sector, and when you are seeing transaction that happen, capital is just tied up in the system because a lot of the sellers are holding financing banks are rolling over their debt. It's not just money back to investors, so that's tying up a lot of capital in the system.
I cover US real estate from the equity side, A cover homebuilders and then also commercial real estate. I'm curious you mentioned office. I was recently working on a story that spoke about how we're seeing a bit of an uptake on Park Avenue. It's not as bad as it once was. As we think about vacancies, what areas are you seeing flourishing or doing better than they were before In the office space.
Well, I think you're seeing sort of the haves and have nots in office. It's the best in a class office and then there's everyone else. And unfortunately, that best of a class office is very limited in New York City. Yeah, there's more buildings than a place like Austin, Texas or some other places, but it's limited. What I have seen
in the office sector is much more leasing demand. So while the leasing demand and absorption is happening a much greater way, it still is challenging from a cap rate perspective.
So you may have a one hundred percent office, one hundred percent lease office building, or ninety percent lease office building, but that cap rate as compared to twenty twenty one is very, very different, and so that's a change in valuation that investors are not able to stomach and in many cases can't get out of these deals today.
Hey, Josh, just kind of before the pandemic. In mike Town in Jersey, they constructed a multi very nice, high end, multi multi unit residential thing and a big sign out front, financed by the local bank. If I go to build that same property today, is that look a bank going to be there for me?
So it's a good question. So that bank generally is not there, and why because banks have a liquidity mismatch. They were committing long for a construction loan like that and borrowing short with deposits. So banks have been scrutinized even more so today from a regulatory standpoint. And so it was really bad post global financial crisis and became even greater from a regulatory standpoint post March twenty twenty three.
So we're filling that void. We are doing a lot of construction lending, which is today a lot lower from a loan to cost standpoint than we had to provide in twenty twenty one before this banking crisis. So we're providing whole loans to that same Jersey developer to build a multifamily, and the good news for multifamily as specific in New Jersey and across the country is we have seen cap rates titan since the spring when I was on the show, by fifty to one hundred basis points,
and a lot of that's a function of debt. I mean, when you look at debt with rates down today, long term rates are down and short term rates are down to some extent. One of the problems with construction lending and higher value add lending is you're borrowing short and so that's an issue. There still is not necessarily the appetite to build because of the cost of short term debt.
You know.
So picking up on Paul's question and picking up on what you just talked about with regulation, some of my sources have said that because it's an election, you're the regulators have actually been relatively lax and trust what you just said. But the idea, I guess my question is do you think that the regulation could even become tighter next year? And then at that point are we going to see more svbs? In other words, are we going
to see some of these regional banks? Is they are more pain there in terms of blowing up our consolidation.
I think it's a more politically oriented question in terms of the election, really who wins here, But no matter what, I so there's.
A difference who wins.
I think directionally you will see more consolidation, and a lot of that has to do with banks are upside down in terms of having long term loans that are at very low rates, and those aren't rolling off so quick and they're matched with liquidity that the bank has to pay the positor a lot more than they did in twenty twenty one when the loans were made. So I think you will see more consolidation in the banking sector. And oh so, I think you will see more consolidation.
You start to see more of that already in this year, but you'll see more in years to come.
Well, I just really want to pick up on that election thing though, because I haven't heard anybody say that it matters who wins. So were you making the point that if the former president Donald Trump wins, or if for or the current VP Harris if she wins, there's going to be a difference in regulation. And if there is, what does it look like.
I mean, I can't speak to specifics, but there's a view that will be well, there'll be more regulatory pressure from regulators in a democratic significantly more can't comment really, you know, I don't know, but more you'll be more, all right, Josh, thanks so much for journey.
Us really appreciate it.
Jos Ziegen, Managing Principle, A co founder and Madison Realty Capital in Abco Dolittle, Chief Markets correspondent for Bloomberg News in our Bloomberg and aarct approp Pro studio, just kind of get the laid down on the real estate business.
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Normal, Linda sitting in front Alex deal on Paul Sweeney. You're live here in our Bloomberg and an Actor Broker studio or streaming live on YouTube as well, So go check us out there. Just got back from a little one day corporate travel gig. Alex and I went down to the Hilton Head Island or down to Kiwa for a client event.
Travel one. Fine, that's great.
You were in United, right, what's you were on United?
Down on Delta back on United? So both good?
Oh?
Good?
Packed?
I don't know the place was packed. I think people are back out there traveling again. Here and my thing on travel, I only travel. Somebody pays me to travel as you should.
I'm just like I like that philosophy.
Exist anyway, I've been pretty much everywhere you need to go. I think James Thornton joins us. He's a CEO of Intrepid Travel, joining us from London via Zoom. James talk to us about I love to get your perspective, just kind of as you look at maybe business travel. What are most companies doing in terms of business travel these days versus pre pandemic?
Are we back to those levels? Will we get back to those levels? Where are we?
Yeah, we're definitely back to the levels, Paul. I think there was a misconception during the pandemic that the business travel environment wouldn't recover and we'd all be stuck on zoom and be meeting remotely. But we're seeing that airplanes are full. Business travel, corporate travel clients are up.
Year on year.
Nothing beats being together face to face. So yeah, business travel is back and people are flying around a meeting again.
So of course everyone likes to keep in mind the idea of limiting our carbon footprint. I'm curious, how are business companies, How are they thinking about this when we think about business travel, our companies being mindful or is ESG a buzzword that's been left in the past. How are we thinking about that now in twenty twenty four.
Yeah, look, I think companies are becoming increasingly mindful about their carbon outputs, particularly when it comes to their staff travel, but also in the sense of the way in which customers are thinking about their right in theies too. At Intrepid Travel, we've reached launched carbon and labeled carbon labeling program on five hundred of our itineries around the world, and we display a number about the CO two emissions
that come from our trips. Is a bit like a food label if you like, so customers can calculate how much carbon emissions per traveler come from their trip applications. So customer things be more interested in the carbon outputs of their traveling experiences.
You know you mentioned I just completed I did a one on a tour of Ireland. Fantastic by the way, and the Irish love me of course being from there. But on the questionnaire afterwards, like how is the trip? And it was awesome, off the charts, and then they asked about the carbon footprint and I said, I could not care less. Can you please just let me have a vacation and just enjoy myself. But James, I think
I'm into my minority. I think travelers more and more are thinking about the carbon footprint of the plane they take, the cruise ship they take. How does the industry adapt to that?
Yeah?
Absolutely, Paul. Look, I think there's two really important points here. One, it's critically important that people have great holiday experiences. You know, it's vitally important. We all go on holiday to relax, to enjoy ourselves, to have fun, to try the local food and enjoy a well aired break. But at the same point, we also want, as much as possible make sure that we're having a lighter impact upon the environment, and we're trying to benefit local communities as much as
we possibly can. And that's why business is like in Prepid are putting carbon labeling onto our itineries so that customers can make more informed decision making choices. Absolutely, they want to have a great trip, but they also want to be aware about limiting the impact on the environment.
And how are we thinking about this on an international scale. I'm thinking about Paul talking about this trip to Ireland, and I wonder if the US are we behind in some of these efforts to really limit that carbon footprint. How are you seeing this internationally?
Yeah, look, I think Europe is certainly leading the way, both from a legislate but also consumer points of view, But I would say that the US is all stay catching up, and we're certainly seeing demand from customers that want to travel in a more sustainable, immersive way. Of course, they want to get out and they want to see the iconic sites, but they also want to try and make sure that their tourism dollars are staying within the
local communities. And that's why we're seeing a real desire for people to travel on intrepid style of sustainable experience rich travel using different types of local transport, you staying in different types of local accommodation and really getting under the skin of a destination and hopefully having some amazing holiday experiences.
So what are we seeing.
Here, James about some of those experiential trips as you mentioned, and we saw that coming out of the pandemic. People, I guess during the pandemic they buy stuff and goods, but coming out of it, they wanted experiences. So they're not just going to the typical like what I would do is.
Just go to a golf resort or beach resort.
They're doing different things. What are some of the more popular tours that you guys do.
Yeah.
Absolutely, I think we're living in the experiences of economy. Well, people are desperate to get out, having been caught up at home during the course of the pandemic and travel being taken away as a right for people. They want to give back out and they want to see the iconic destinations. So we're seeing really big demand for destinations
like a Japan for example. You know, great immersive destination where you can get out and you can have great food experiences, but it's a bit more challenging to travel around independently by yourself, and that's why using reliable tour operators like Intrepid is a great way to get out and see a destination. We're seeing Europe boom, particularly in the shoulder seasons, getting out of that kind of peak travel period of July and August when it's hot and
it's stuffy and it's crowded. Seeing a lot of demand into Europe, particularly around those shoulder seasons of April May and also September October. It's a little bit cooler and the crowds are a little.
Bit less, So James. From a legislative perspective, how are companies being held accountable? Of course there's a lot of business travel. We may fly out for one day and come back. There's a lot of things that are going on in that making that decision. All are businesses being held accountable for this?
Yeah, at the moment they're not, Nora, I think businesses are they going to start to be held accountable for what they say. What we're not seeing quite yet is businesses being accountable for what they do. And so we're certainly seeing, particularly driven out of Europe legislation to ensure that companies are not greenwashing and they're advertising, and we think companies being picked up when they are making big, bold claims around being good for the environment, but people
are jumping on planes. So not only is it about what people say in their advertising. Soon, we're going to see legislation come in terms of the actual actions of which companies are taking. And that's why I think it's important that all companies are trying to take proactive steps in terms of measuring their emissions, ideally offsetting their emissions, but ultimately moving towards trying to decarbonize their activities, no matter what industry they might be in.
James, thanks so much for joining us.
I really appreciate getting some of your thoughts there. James Thornton needs the CEO of Intrepid Travel, joining us via that zoom thing from London. Yeah, it took this my first when I went to Ireland. There's so many things you want to see. I've never taken like a tour before. Maybe I'm getting to an age or that's kind of what you do. I don't know, but there's so many things you want to see in like a place like Ireland that you have to do it that way, and
we did. We saw everything, so I feel good about it and I'd recommend it.
I was in Dublin back in April. Okay, first I'm going to Ireland. Didn't get to do the massive tour that I would have loved to do, but it's such a beautiful place it is.
It was good.
So we did, like Dublin up the Belfast over to darry so got the Northern Ireland experience too, and it is different from the Republic of Ireland still today. Then you come back down back into the Republic of Ireland into Westport and then Limericks so very cool. So hold the north half of the island. We'll do the southern half and again saw a couple of Sweeney as a matter of fact, went the mass at our family church in Belfast back from back in the day.
So that was pretty cool. Ireland, good, good times.
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