WEBVTT - Bloomberg Businessweek Weekend: June 7th, 2024 0:00:01.360 --> 0:00:05.720 This is Bloomberg Business Week inside from the reporters and 0:00:05.920 --> 0:00:09.480 editors who bring you America's most trusted business magazine, plus 0:00:09.560 --> 0:00:13.680 global business, finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:18.680 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:19.720 --> 0:00:22.600 Hi, everyone, Welcome to the Bloomberg Business Wee Weekend Podcast. 0:00:23.000 --> 0:00:26.239 This week back of US economic data, setting the stage 0:00:26.280 --> 0:00:29.600 for the upcoming FED meeting on Wednesday, and yet got 0:00:29.600 --> 0:00:33.159 to say top of mind an election outside the United States. 0:00:33.600 --> 0:00:37.600 Also the memes Talk Darling that continues to enrapt Wall Street. 0:00:38.040 --> 0:00:39.879 On the latter, we catch up with the author of 0:00:39.920 --> 0:00:42.800 the Trolls of Wall Street excerpted in the current issue 0:00:42.800 --> 0:00:43.960 of Bloomberg Business Week. 0:00:44.000 --> 0:00:46.479 Plus Franklin Templeton and b and Y Melon are two 0:00:46.640 --> 0:00:50.760 giants in the asset management business. Jenny Johnson, president and CEO, 0:00:50.920 --> 0:00:55.200 Franklin Templeton and Honika SMI's senior executive vice president and 0:00:55.240 --> 0:00:59.120 global head of Investment Management at BNY Mellen share their. 0:00:58.920 --> 0:01:01.320 Outlooks all of that to come. We begin with the 0:01:01.400 --> 0:01:04.919 elections in India and the surprising outcome as Prime Minister 0:01:05.040 --> 0:01:09.120 Narendra Moody's party lost its majority in Parliament, Moody must 0:01:09.160 --> 0:01:11.480 now rely on allies to form a government for the 0:01:11.480 --> 0:01:14.399 first time since he stormed a power a decade ago. 0:01:14.600 --> 0:01:16.839 India stocks had their worst day in more than four 0:01:16.920 --> 0:01:20.480 years following the results. To understand it all, we leaned 0:01:20.480 --> 0:01:24.280 on the expertise of Bloomberg News senior editor Bobby Gosho 0:01:24.319 --> 0:01:27.440 previously covered foreign affairs with a special focus on the 0:01:27.480 --> 0:01:30.360 Middle East and the wider Islamic world, and he was 0:01:30.360 --> 0:01:33.280 Time Magazine's Bagdad Buera chief prior to joining Bloomberg. 0:01:33.480 --> 0:01:36.440 Well, it's striking because this is a figure, Nardo Modi, 0:01:36.480 --> 0:01:40.560 who has dominated the Indian political landscape like no politician 0:01:40.920 --> 0:01:44.880 going back a couple of generations. For ten years, he's 0:01:44.920 --> 0:01:48.440 been front and center of Indian politics. He sort of 0:01:48.520 --> 0:01:53.440 commanded an aura of invincibility, and his party, which is 0:01:53.600 --> 0:01:57.960 very very good at messaging, very disciplined at messaging, conveyed 0:01:58.000 --> 0:02:01.200 that message ahead of this election. And this election was 0:02:01.240 --> 0:02:04.840 not just a referendum of his party. It was very 0:02:04.920 --> 0:02:07.880 much about him. The entire messaging of the election was 0:02:07.920 --> 0:02:11.640 around vote for Modi, even though this is a parliamentary election. 0:02:12.480 --> 0:02:16.880 So if you can imagine the closest American comparison would 0:02:16.880 --> 0:02:21.880 be if in the midterms the Republicans went out to 0:02:21.960 --> 0:02:25.280 all their voters in the Senate and in the Congress, 0:02:25.520 --> 0:02:28.160 but their message was vote for Trump, not for me. 0:02:28.400 --> 0:02:31.560 Vote for Trump. That was the kind of messaging that 0:02:31.760 --> 0:02:35.160 went into this election, and so this is a personal 0:02:35.240 --> 0:02:37.720 failure on the part of Mody. They'd set the bar 0:02:38.000 --> 0:02:43.160 very very high, four hundred seats they've gotten. The bare 0:02:43.200 --> 0:02:46.119 minimum to get a majority is two hundred and seventy two. 0:02:46.480 --> 0:02:49.240 The party by itself looks more likely to get two 0:02:49.360 --> 0:02:52.560 hundred and forty. Now it has allies and it can 0:02:52.600 --> 0:02:55.360 form a coalition, so it's very likely it will remain 0:02:55.400 --> 0:02:55.840 in government. 0:02:55.919 --> 0:02:56.079 More. 0:02:56.120 --> 0:02:59.520 They may remain Prime Minister, but his personal prestige has 0:02:59.560 --> 0:03:00.880 taken a real battery. 0:03:01.160 --> 0:03:05.760 MODI already spinning this as a victory. Where did the 0:03:05.800 --> 0:03:09.160 polsters go wrong? Why did we see the exit polling 0:03:09.639 --> 0:03:13.080 show such a stark difference to the votally explain? 0:03:13.160 --> 0:03:15.760 I think, I think some real deep investigations are going 0:03:15.760 --> 0:03:17.400 to have to be done into that exit polling. The 0:03:17.480 --> 0:03:18.959 numbers are so I mean. 0:03:20.400 --> 0:03:20.800 Shocking. 0:03:20.880 --> 0:03:23.280 Yeah, we've become used to it in recent years. All 0:03:23.320 --> 0:03:26.399 over the world. People tell polsters one thing and then 0:03:26.440 --> 0:03:28.440 they when they go to vote, they do something else. 0:03:28.560 --> 0:03:28.800 Right. 0:03:29.200 --> 0:03:30.959 This is a problem in this country just as much 0:03:30.960 --> 0:03:34.440 as another's. But the gap between what the exit polls 0:03:34.440 --> 0:03:37.520 are showing and what the results now seem to be indicating. 0:03:37.960 --> 0:03:41.600 I haven't seen a gap that wide in any major 0:03:41.680 --> 0:03:45.040 election anywhere in the world. So something, something has gone 0:03:45.320 --> 0:03:48.480 terribly amidst this is not simply, I would suggest, not 0:03:48.520 --> 0:03:51.720 simply a case of people telling polsters one thing and 0:03:51.760 --> 0:03:54.840 doing something else. I think something more structural might be 0:03:55.880 --> 0:03:57.520 maybe more structural problems here. 0:03:57.800 --> 0:03:59.640 I want to get your comments though, on voters feeling 0:03:59.680 --> 0:04:04.240 left of India's growth, the growing inequality, pervasive joblessness, rising 0:04:04.320 --> 0:04:06.320 labor costs feels very very similar. 0:04:07.320 --> 0:04:07.960 What is this a. 0:04:08.000 --> 0:04:10.680 Vote against though? Is it a vote against Modi the 0:04:10.720 --> 0:04:13.400 personality or vote against Listen, I don't feel so good. 0:04:13.640 --> 0:04:17.440 Well, For one thing, there's a strong anti incumbency vote, right, 0:04:17.600 --> 0:04:19.440 this party has been in power for a long time. 0:04:19.640 --> 0:04:21.680 People would like to see the other side get a try. 0:04:21.800 --> 0:04:25.279 That's just human human nature. That happens with democratic collections 0:04:25.279 --> 0:04:27.560 all over the world. But the other thing is that 0:04:27.680 --> 0:04:32.960 Modi's message of economic success has left out huge numbers 0:04:32.960 --> 0:04:36.160 of Indians. Is the world's most populous country. And a 0:04:36.160 --> 0:04:39.000 lot of Modi's messaging is, look at how many billionaires 0:04:39.360 --> 0:04:43.159 we've created in the last ten years or in the 0:04:43.200 --> 0:04:47.640 time that I've been in power. Eight hundred million Indians 0:04:47.680 --> 0:04:53.279 still depend on highly subsidized handouts from the government from 0:04:53.880 --> 0:04:58.479 food and that cohort of people. That's a lot of 0:04:58.520 --> 0:05:02.720 people were not included in this message of look how 0:05:02.720 --> 0:05:07.040 many billionaires we've created and a lot of the votes 0:05:07.600 --> 0:05:10.480 you know, as we're the patterns that we are seeing 0:05:10.800 --> 0:05:15.000 is that he seems to have lost a momentum in 0:05:15.320 --> 0:05:18.520 rural parts of the country. Farmers, those are the poorest 0:05:18.520 --> 0:05:21.000 to the poor in India tend to come from the 0:05:21.080 --> 0:05:25.280 rural heartland states where for a long time Mody was dominant, 0:05:25.279 --> 0:05:28.320 the BJP was dominant. Their message was vote for us 0:05:28.560 --> 0:05:31.480 and all voats will rise. You will rise up from 0:05:31.600 --> 0:05:34.599 this menial labor you're doing in the farm and will 0:05:34.760 --> 0:05:38.040 you too will have a chance at economic strip. 0:05:38.080 --> 0:05:39.920 Why isn't it rising up? I don't want to go 0:05:40.000 --> 0:05:42.880 trickle down, I feel like, but why isn't it spreading out? 0:05:42.920 --> 0:05:46.039 Well, that's the nature of so much of India's economic 0:05:46.080 --> 0:05:48.160 growth over the last many years is that it has 0:05:48.279 --> 0:05:51.320 not been a growth that has included everybody. The problem 0:05:51.360 --> 0:05:56.160 of unemployment has not been reckoned with in this growth. 0:05:56.640 --> 0:05:59.599 This is a jobless growth for a large part. For 0:05:59.640 --> 0:06:02.760 the most it is not creating enough jobs. There's a 0:06:02.800 --> 0:06:06.039 giant country, huge numbers of people. Tens of millions of 0:06:06.040 --> 0:06:09.960 people are coming into the coming into working age every year. 0:06:10.080 --> 0:06:12.360 The economy, even though it's one of the fastest growing 0:06:12.360 --> 0:06:15.040 economies in the world, is not creating tens of millions 0:06:15.040 --> 0:06:17.239 of jobs. So there's a square and there's a circle, 0:06:17.320 --> 0:06:18.520 and these are not going to matter. 0:06:18.640 --> 0:06:21.920 So continue with the economic implications of this. We saw 0:06:22.040 --> 0:06:24.520 the stock market, or we saw Indian stocks I should say, 0:06:24.720 --> 0:06:27.640 have their worst day in more than four years. Obviously 0:06:27.760 --> 0:06:30.280 market's not like surprises. But I do wonder about the 0:06:30.320 --> 0:06:33.719 economic implications of this globally, Bobby, and what it means 0:06:33.760 --> 0:06:37.680 for a country that is trying to transition from developing 0:06:37.720 --> 0:06:39.160 country to a developed country. 0:06:39.640 --> 0:06:42.520 I'm not terribly worried about the Indian economy. I will 0:06:42.520 --> 0:06:46.240 say this because so much of all these economic policies 0:06:46.240 --> 0:06:50.440 were built on a platform that the previous government dominated 0:06:50.440 --> 0:06:54.200 by Congress Party laid down. That laid down those foundations 0:06:54.200 --> 0:06:57.760 now the Congress is back in terms of economics, in 0:06:57.839 --> 0:07:01.680 terms of needing investments, not a whole lot of sunlight 0:07:01.760 --> 0:07:05.599 between the BGP and the Congress Party and its allies. 0:07:05.800 --> 0:07:10.520 There may be some differences in prioritization, but for the 0:07:10.600 --> 0:07:14.880 large part, they both agree that India needs foreign investment. 0:07:15.000 --> 0:07:19.280 Indian economy needs reforms, Indian businesses needs support. Indian needs 0:07:19.320 --> 0:07:21.840 to be creating more jobs, and those jobs have to 0:07:21.920 --> 0:07:25.960 come primarily from the private sector. There's a lot they 0:07:26.040 --> 0:07:29.720 have in common in their economic vision, although if you 0:07:29.760 --> 0:07:33.280 ask them directly they would deny that furiously. Equally on 0:07:33.320 --> 0:07:35.880 foreign policy too, this is the same thing. Both countries 0:07:35.920 --> 0:07:39.559 recognize that India's association India's ties with the United States 0:07:39.600 --> 0:07:43.840 are crucial, that India and the United States have a 0:07:43.920 --> 0:07:47.880 common concern about China's growing influence in the world. India, 0:07:48.280 --> 0:07:51.600 which borders China, which went into war with China in 0:07:51.640 --> 0:07:55.160 the early nineteen sixties, feels the heat very closely. I 0:07:55.200 --> 0:07:59.280 don't expect big changes there. I think a lot of 0:07:59.320 --> 0:08:03.680 this has been the election has been to a substantial 0:08:03.760 --> 0:08:08.280 degree about how the parties regarded minorities in the country. 0:08:08.320 --> 0:08:12.760 The BJP, which is a very Hindu Nationalist Party. During 0:08:12.800 --> 0:08:16.520 this election, more than ever before, there was some really 0:08:16.760 --> 0:08:21.840 strident anti minority and particularly anti Muslim speeches from the 0:08:21.880 --> 0:08:24.679 Prime Minister on down. The Congress Party and its allies 0:08:24.760 --> 0:08:30.160 come from an older, more secular, more inclusive kind of politics, 0:08:30.240 --> 0:08:32.960 and I think that is what won out at the 0:08:33.040 --> 0:08:34.880 end of the day. But more than again, to come 0:08:34.880 --> 0:08:37.040 back to where I started. More than anything else, this 0:08:37.120 --> 0:08:40.839 is the Indian voters voting against Modi rather than voting 0:08:40.880 --> 0:08:41.520 for anybody. 0:08:41.559 --> 0:08:43.600 So, Bobby, is this the beginning of a new chapter 0:08:43.760 --> 0:08:45.840 in terms of India's political history? 0:08:46.760 --> 0:08:47.640 It could very well be. 0:08:48.040 --> 0:08:54.720 We've seen this movie before. Coalitions, large, unwieldy coalitions trying 0:08:54.720 --> 0:08:58.840 to form a government, sometimes succeeding but not being able 0:08:58.880 --> 0:09:01.680 to hold together the some of their parts, and another 0:09:01.760 --> 0:09:05.360 election coming up in quick succession. Now, if Mody can 0:09:05.400 --> 0:09:09.640 hold together his coalition partners, and the two main coalition 0:09:09.760 --> 0:09:13.640 partners are notorious for switching camps, They've done it so 0:09:13.760 --> 0:09:16.880 many times in recent years. If he can hold together 0:09:16.960 --> 0:09:20.160 his coalition, he will continue to be Prime Minister, but 0:09:20.320 --> 0:09:23.520 he will no longer have that swagger and he will 0:09:23.600 --> 0:09:27.000 have to deal. Momentum is everything in politics, right he 0:09:27.040 --> 0:09:30.240 will have to deal with an opposition in Parliament that 0:09:30.360 --> 0:09:33.080 is much stronger than before, but feels like it has 0:09:33.120 --> 0:09:36.439 the win in his sales, that will feel more imboltant 0:09:36.720 --> 0:09:40.960 to press against his policies, to push against whatever he's 0:09:41.000 --> 0:09:46.080 trying to do, particularly on social issues, and so he 0:09:46.120 --> 0:09:49.040 will not be able to govern with the confidence that 0:09:49.080 --> 0:09:49.800 he had before. 0:09:49.960 --> 0:09:51.679 So, Bobby, if he's not able to govern with the 0:09:51.679 --> 0:09:54.040 confidence and swagger that he had before, where should we 0:09:54.080 --> 0:09:57.040 look to for change? Where would you expect to see 0:09:57.120 --> 0:09:59.760 changes as a result of this election outcome? 0:10:00.120 --> 0:10:03.480 Well, a lot of the changes will be more optical 0:10:03.559 --> 0:10:08.920 than actual, shall we say. I think the fact that 0:10:09.800 --> 0:10:13.439 the rejection of this politics of bigotry, the politics of 0:10:14.760 --> 0:10:19.760 identifying and targeting minorities, the politics of sort of a 0:10:20.040 --> 0:10:25.200 majoritarian view of religion that India should be Hindu. I 0:10:25.240 --> 0:10:28.080 think all of that will recede, at least for a while. 0:10:28.559 --> 0:10:30.640 You know, a great deal is going to depend on 0:10:30.800 --> 0:10:33.960 what the opposition opposition can do with the momentum that 0:10:34.040 --> 0:10:37.959 it has. Rahul Gandhi, who's leading the opposition coalition, has 0:10:38.040 --> 0:10:41.319 not been in this place before. He is an untested 0:10:41.960 --> 0:10:46.200 quantity in this situation. He has run a Congress party 0:10:46.480 --> 0:10:49.920 that has long been a family fiefdom, and nobody dares 0:10:49.960 --> 0:10:52.320 to raise a voice against him. He has not had 0:10:52.360 --> 0:10:55.679 to be conciliatory, he has not had to include lots 0:10:55.679 --> 0:10:58.600 of different voices in the decision making. As a leader 0:10:58.640 --> 0:11:01.439 of a coalition, he'll have no choice but to do that. 0:11:01.520 --> 0:11:03.280 Well, that's what I was thinking about, because in our 0:11:03.320 --> 0:11:05.720 reporting you put it out where the twenty opposition parties 0:11:05.720 --> 0:11:10.120 formed a united front against Mody, and I think about, okay, 0:11:10.280 --> 0:11:12.920 united front against one. But then you have to take 0:11:12.960 --> 0:11:15.439 those groups right and figure out the way forward. 0:11:15.800 --> 0:11:19.680 Yeah, So now do you make a play for Mody's 0:11:19.760 --> 0:11:21.720 allies and try to bring them on your side and 0:11:21.760 --> 0:11:25.240 try to form a coalition with twenty four twenty five 0:11:25.280 --> 0:11:28.000 different parties, or do you sit back and say, no, 0:11:28.040 --> 0:11:30.800 we're gonna let We're gonna be in opposition, we're gonna 0:11:30.800 --> 0:11:33.920 be a strong opposition, We're gonna let Mody dig himself 0:11:33.960 --> 0:11:37.520 into a hole. This is a very crucial decision that 0:11:37.600 --> 0:11:41.719 has to be taken first, and then the real practical 0:11:42.000 --> 0:11:45.840 day to day difficulties of hurding all these cats together. 0:11:46.160 --> 0:11:47.920 It's one thing when you have a common goal of 0:11:47.920 --> 0:11:48.720 defeating mody. 0:11:48.960 --> 0:11:51.160 That was Bloomberg New Senior editor Bobby. 0:11:50.920 --> 0:11:54.240 Gosh coming up from the series to the sublime came 0:11:54.320 --> 0:11:58.040 Stop a big trade this week again, how the outcasts 0:11:58.080 --> 0:11:59.960 and insurgents are hacking the markets. 0:12:00.160 --> 0:12:01.240 It's all in a new book. 0:12:01.600 --> 0:12:05.000 It's a fascinating topic that I do think most people 0:12:05.640 --> 0:12:09.800 forgot about since January twenty twenty one, when game Stop 0:12:10.120 --> 0:12:13.679 was really in the news and you couldn't avoid it. 0:12:14.040 --> 0:12:16.840 I think a lot of people thought that this was 0:12:17.080 --> 0:12:21.000 going to go away when when GameStop went down it 0:12:21.040 --> 0:12:23.160 but more than that, people thought it was going to 0:12:23.200 --> 0:12:27.040 go away when the pandemic was over and these young 0:12:27.080 --> 0:12:28.240 traders would go home. 0:12:28.520 --> 0:12:31.760 You're listening to Bloomberg Business Week. This is Bloomberg. 0:12:32.440 --> 0:12:35.960 You're listening to the Bloomberg Business Week podcast. Catch us 0:12:36.000 --> 0:12:39.240 live weekday afternoons from two to five pm Eastern Listen 0:12:39.280 --> 0:12:42.360 on Applecarplay and then Broun Auto with a Bloomberg Business 0:12:42.360 --> 0:12:45.160 act or watch us live on YouTube. 0:12:46.080 --> 0:12:48.839 Game Stop was a focal point on Wall Street this week. 0:12:49.080 --> 0:12:52.520 The memestock darling during the pandemic surging after the Reddit 0:12:52.520 --> 0:12:55.640 account that who drove memestock Mania back in twenty twenty 0:12:55.679 --> 0:12:58.160 one posted what appeared to be a one hundred and 0:12:58.200 --> 0:13:02.000 sixteen million dollar position in the video game retailer. We're 0:13:02.040 --> 0:13:04.960 talking about none other than Keith Gill, who also goes 0:13:05.000 --> 0:13:08.600 by the name Roaring Kitty. GameStop shares were already up 0:13:08.640 --> 0:13:10.960 a cool one hundred and eight percent. This may its 0:13:11.040 --> 0:13:13.760 best month since January of twenty twenty one, and the 0:13:13.800 --> 0:13:15.960 stock was up another twenty two percent in the first 0:13:15.960 --> 0:13:19.280 week of June, even after share slumped thirty nine percent 0:13:19.320 --> 0:13:23.160 on Friday. This happened after the company unexpectedly released earnings 0:13:23.160 --> 0:13:25.800 and announced plans to sell up to seventy five million 0:13:25.800 --> 0:13:30.160 additional shares, and Gil hosted a YouTube livestream watched by 0:13:30.280 --> 0:13:31.800 hundreds of thousands of people. 0:13:32.440 --> 0:13:35.600 We can't talk about memestocks without talking about Wall Street bets, 0:13:35.800 --> 0:13:39.080 the Reddit message board that, according to our next guest quote, 0:13:39.280 --> 0:13:42.320 would eventually come to occupy a key position at the 0:13:42.360 --> 0:13:45.240 center of a movement that turned millions of young Americans 0:13:45.280 --> 0:13:46.920 into investors and traders. 0:13:47.360 --> 0:13:49.719 That line from a brand new book that comes out 0:13:49.720 --> 0:13:52.280 on June eleventh, called The Trolls of Wall Street How 0:13:52.320 --> 0:13:55.400 the Outcasts and Insurgents Are Hacking the Markets. The book 0:13:55.440 --> 0:13:57.440 by journalist and author Nathaniel Popper. 0:13:57.679 --> 0:14:01.079 It's a fascinating topic that I do think most people 0:14:01.720 --> 0:14:05.880 forgot about since January twenty twenty one, when Game Stop 0:14:06.200 --> 0:14:09.760 was really in the news and you couldn't avoid it. 0:14:10.120 --> 0:14:12.960 I think a lot of people thought that this was 0:14:13.160 --> 0:14:17.320 going to go away when when GameStop went down. But 0:14:17.400 --> 0:14:19.360 more than that, people thought it was going to go 0:14:19.440 --> 0:14:23.560 away when the pandemic was over and these young traders 0:14:23.560 --> 0:14:27.440 would go home. And you know, I write this. I'm 0:14:27.440 --> 0:14:31.360 writing this book about the story of how this happened, 0:14:31.400 --> 0:14:34.960 how this sort of online movement came to be, And 0:14:35.200 --> 0:14:38.520 one of the most surprising elements of the story is 0:14:38.520 --> 0:14:41.800 the way in which it has not gone away. You 0:14:43.120 --> 0:14:46.920 look at these statistics that we now have around retail traders, 0:14:46.960 --> 0:14:50.160 and you see that retail traders are still in there 0:14:50.560 --> 0:14:54.040 buying stocks and trading at the same level that they 0:14:54.080 --> 0:14:57.400 were back basically in twenty twenty one when game Stop 0:14:57.520 --> 0:15:00.920 was happening. So, you know, this latest game Stop moment 0:15:01.480 --> 0:15:04.280 is just a sort of reminder of the fact that 0:15:04.360 --> 0:15:07.280 this whole world has not gone away, all. 0:15:07.320 --> 0:15:09.920 Right, but it continues to play around with these stocks 0:15:09.960 --> 0:15:14.920 that you know, many of us question the fundamental stories here, 0:15:15.200 --> 0:15:17.920 So you know, I understand the lasting effect. It feels 0:15:17.920 --> 0:15:19.720 like a little bit like a video game and playing 0:15:19.760 --> 0:15:22.640 and so on and so forth. Is it something though? Okay, 0:15:22.680 --> 0:15:25.280 so it sticks around, But does it somehow broadened out 0:15:25.320 --> 0:15:28.720 and start to get into some names with fundamental stories. 0:15:29.000 --> 0:15:32.920 That's a very important question for the future of the 0:15:32.960 --> 0:15:35.520 markets and for the future of the portfolios of. 0:15:35.720 --> 0:15:37.280 All the people in this world. Right. 0:15:37.680 --> 0:15:41.560 Look, on one hand, you have the importance of the 0:15:41.600 --> 0:15:45.080 memestock movement in itself, and I think part of what's 0:15:45.080 --> 0:15:49.880 so interesting about memestocks and game Stop is that there's 0:15:49.960 --> 0:15:54.160 something deeper going on there. People figured something out about 0:15:54.200 --> 0:15:57.520 the markets. You're right that in the end, game Stop 0:15:57.600 --> 0:15:59.960 going up was not about fundamentals. It was about social 0:16:00.080 --> 0:16:04.040 media personalities. But there was some discovery in there by 0:16:04.080 --> 0:16:08.080 the crowd of these weird market dynamics around options and 0:16:08.200 --> 0:16:11.960 market makers, and there was this sort of educational process 0:16:12.000 --> 0:16:15.080 that was happening there. You know, it's derided as this 0:16:15.200 --> 0:16:19.320 sort of idiotic flare up, but there was something deeper 0:16:19.360 --> 0:16:22.200 going on there. And that deeper thing taps into your 0:16:22.520 --> 0:16:27.120 bigger question here, which is that our focus on memestocks 0:16:27.200 --> 0:16:30.080 and game Stop I think has distracted us from the 0:16:30.160 --> 0:16:35.000 fact that this whole movement has broadened out significantly and 0:16:35.080 --> 0:16:39.040 now is much bigger than memestocks, and in fact, memestocks 0:16:39.280 --> 0:16:43.000 have gone down as a proportion of all retail trading. 0:16:43.480 --> 0:16:47.520 I think what you've seen is that retail traders, you know, 0:16:47.560 --> 0:16:50.080 they are always thought of as the dumb money, but 0:16:50.400 --> 0:16:53.240 when you're in the markets and when you're investing and 0:16:53.320 --> 0:16:57.160 when you're trying things out, you learn things, and that 0:16:57.320 --> 0:16:59.720 you have seen that over time. You see that in 0:16:59.760 --> 0:17:04.439 this data that shows the trends, the trends that retail 0:17:04.480 --> 0:17:08.040 traders are following. And as I mentioned, the percent of 0:17:08.080 --> 0:17:11.000 all trading that's gone to memestocks has gone down, and 0:17:11.040 --> 0:17:16.600 the percent that's gone to electric cars and AI plays 0:17:16.600 --> 0:17:19.240 and Nvidia has been enormous. 0:17:19.480 --> 0:17:21.160 And so coming out. 0:17:21.040 --> 0:17:23.600 Of you know, twenty twenty two, twenty twenty three, we 0:17:23.640 --> 0:17:26.280 had this market downturn, and that was another moment where 0:17:26.280 --> 0:17:28.800 everybody said, Okay, these retail guys. 0:17:28.680 --> 0:17:30.160 Are going to get slaughtered. They're done. 0:17:30.720 --> 0:17:33.760 You see coming out of that that the retail guys 0:17:34.200 --> 0:17:37.280 were buying when the markets were at their low, and 0:17:37.320 --> 0:17:40.600 they were not just betting on they were not just 0:17:40.600 --> 0:17:44.119 betting on memestocks, they were betting on AI plays, and 0:17:44.200 --> 0:17:48.080 so you see this sort of interesting migration. Obviously, it's 0:17:48.119 --> 0:17:52.440 also present in the whole crypto world, and that keeps going, 0:17:52.480 --> 0:17:54.680 and that's come back in ways that people didn't expect. 0:17:54.920 --> 0:17:58.160 But the idea is this thing has gotten bigger than 0:17:58.320 --> 0:18:00.480 any one place, bigger than Walsh Bets. 0:18:00.480 --> 0:18:03.480 Certainly that that's so interesting, Nathaniel, But I do wonder 0:18:03.680 --> 0:18:06.639 to what extent the folks who you feature in the book, 0:18:06.760 --> 0:18:09.760 and then also the folks who just lurk in Wall 0:18:09.800 --> 0:18:13.800 Street Bets have actually made money because there were so 0:18:13.880 --> 0:18:19.160 many stories post memestock craze of twenty twenty one of 0:18:19.520 --> 0:18:22.520 individuals losing fortunes, losing everything. 0:18:22.720 --> 0:18:24.080 So I think you know you again. 0:18:24.119 --> 0:18:26.960 I want to sort of split this into two halves, 0:18:27.320 --> 0:18:29.679 one is which one of which is the sort of 0:18:29.800 --> 0:18:34.520 cultural phenomenon. And I think, you know, losing has actually 0:18:34.600 --> 0:18:37.439 been a sort of central part of the Wall Street 0:18:37.560 --> 0:18:42.880 Bets sort of culture going back to twenty fifteen, going 0:18:42.920 --> 0:18:45.080 back even earlier. I mean, this place has now been 0:18:45.119 --> 0:18:49.639 around for more than a decade, and part of the 0:18:49.680 --> 0:18:54.159 culture was a recognition we're doing something stupid. It was 0:18:54.200 --> 0:18:57.439 about getting tension it was about. It was it was 0:18:57.720 --> 0:19:01.440 part of this whole sort of four chain and trolling 0:19:02.160 --> 0:19:05.360 online culture that, by the way, I think is deeply 0:19:05.400 --> 0:19:08.520 interwoven with Donald Trump and the alt right. I mean 0:19:08.600 --> 0:19:12.240 all of this stuff. I sort of explain how it played. 0:19:12.359 --> 0:19:15.240 They these these different movements online played off each other 0:19:15.720 --> 0:19:19.160 over the years, and Donald Trump became this important figure 0:19:19.280 --> 0:19:22.040 on Wall Street Bets, and part of that was this 0:19:22.119 --> 0:19:27.399 weird trolling culture where you're both joking and being serious 0:19:27.440 --> 0:19:29.800 and you're doing stupid stuff, but it's also smart at 0:19:29.840 --> 0:19:33.119 the same time. It's a very sort of complicated online 0:19:33.160 --> 0:19:36.280 world that I tried to untangle. But so that is 0:19:36.320 --> 0:19:38.879 one piece of this, and losing is a part of it, 0:19:38.920 --> 0:19:41.840 and there are I you know, chronicle some of these 0:19:41.920 --> 0:19:45.200 sad stories in my book, and you know, including this 0:19:45.200 --> 0:19:49.720 this suicide that really hit this community hard because of 0:19:49.760 --> 0:19:53.359 some of these losses. But at the same time, I 0:19:53.600 --> 0:19:57.040 tried to look at the data for both how Wall 0:19:57.080 --> 0:20:00.199 Street Bets was doing and how retail traders were doing. 0:20:00.240 --> 0:20:03.000 More broadly, I think what you see there is a 0:20:03.000 --> 0:20:08.000 slightly different story. As retail traders have gotten into the markets, they, 0:20:08.280 --> 0:20:11.920 as I mentioned, have learned and the markets have come 0:20:11.960 --> 0:20:14.800 to seem less intimidating. And so, you know, the markets 0:20:15.160 --> 0:20:18.160 used to be a thing that young people largely avoided. 0:20:18.200 --> 0:20:20.720 You know, the markets were something for old. 0:20:20.440 --> 0:20:23.840 White dudes who you know, worked hired, and now it's 0:20:23.840 --> 0:20:27.840 something that kids care about. And the big picture data 0:20:28.000 --> 0:20:31.240 shows that it's very good that kids care about the 0:20:31.280 --> 0:20:33.560 markets because the markets are a very good place to 0:20:33.600 --> 0:20:37.080 have your money. And even if let's say you're you're 0:20:37.119 --> 0:20:40.400 making you know, you're trying to time in video or Apple, 0:20:40.840 --> 0:20:42.640 maybe you're not going to make as much as an 0:20:42.640 --> 0:20:45.000 index fund, but it's better you have your money in 0:20:45.040 --> 0:20:47.239 the markets than that you're just sitting on it, you know, 0:20:47.320 --> 0:20:48.400 in your savings account. 0:20:48.520 --> 0:20:51.240 So that's a bigger transition that interests me. 0:20:51.760 --> 0:20:53.760 Okay, Nathana, we got to talk about a couple of 0:20:53.760 --> 0:20:58.560 the main characters in the book here, Jamie Ragazinski and 0:20:58.680 --> 0:21:01.359 Jordan Zizia. Who are these guys. 0:21:02.040 --> 0:21:06.520 Jamie is the founder of Wall Street Bets. He's a 0:21:06.640 --> 0:21:12.480 guy back in twenty twelve who created this subreddit, and 0:21:13.119 --> 0:21:19.520 at the time it was basically an escape from his alcoholism. 0:21:19.880 --> 0:21:23.159 He was basically a thirty year old guy working at 0:21:23.200 --> 0:21:27.240 a job he didn't really like and he was looking 0:21:27.400 --> 0:21:30.240 for basically ways to fill his hour when he was 0:21:30.280 --> 0:21:34.119 at home drinking alone, and he began trading. And he 0:21:34.200 --> 0:21:37.440 realized that trading was much more entertaining than he thought 0:21:37.480 --> 0:21:40.280 it would be, and he liked talking about it with people, 0:21:40.359 --> 0:21:43.840 and so he created this subreddit which he called Wall 0:21:43.840 --> 0:21:47.679 Street Bets. And what's so interesting about Jamie is that 0:21:47.840 --> 0:21:51.040 it turned out that there were a lot of other 0:21:51.200 --> 0:21:55.679 guys in a similar situation, guys who were sort of 0:21:56.080 --> 0:21:59.680 struggling in life, struggling to find their place, feeling sort 0:21:59.680 --> 0:22:05.399 of alienated, and this community grew up around him and 0:22:05.520 --> 0:22:09.280 he found company in it, and it created this strange 0:22:09.359 --> 0:22:12.240 culture that we now know of as Wall Street bets. 0:22:12.960 --> 0:22:15.439 You know, by the time he got kicked out of 0:22:15.480 --> 0:22:18.360 Wall Street Bets, which is one of the interesting chapters 0:22:18.400 --> 0:22:22.199 in this book, wall Street Bets had attracted a million 0:22:22.280 --> 0:22:27.359 members and that was when the sort of next phase 0:22:27.359 --> 0:22:30.160 of Wall Street Bets happened, which was really during COVID, 0:22:30.640 --> 0:22:33.720 and that was when this young guy named Jordan Zarzara 0:22:33.920 --> 0:22:38.639 took over as the sort of main moderator for the subreddit. 0:22:39.160 --> 0:22:43.959 And he is another interesting character who's never really found 0:22:44.000 --> 0:22:47.600 his place in life, never really got a job he liked, 0:22:48.240 --> 0:22:52.840 and he found this community, and he found something so 0:22:53.800 --> 0:22:57.919 meaningful and rich in it, even in its all of 0:22:57.960 --> 0:23:02.439 its twisted humor and dark humor. I mean, it's a 0:23:02.480 --> 0:23:05.720 weird place. But the strange thing was this had a 0:23:05.760 --> 0:23:09.560 real hold on the people who came there, and it 0:23:09.600 --> 0:23:13.400 became a real community. And I think that's something again 0:23:13.400 --> 0:23:16.359 when we talk about meme stocks, it's easy to miss 0:23:16.840 --> 0:23:20.600 the way in which this feeds into this much bigger culture, 0:23:20.640 --> 0:23:22.760 in this much bigger set of needs that the young 0:23:22.800 --> 0:23:23.840 guys coming there have. 0:23:24.560 --> 0:23:27.080 I'm wondering about this idea of you know, quote unquote 0:23:27.200 --> 0:23:31.200 sticking it to the man, because there were moments during 0:23:31.400 --> 0:23:33.919 twenty twenty one where that was a big part of 0:23:33.960 --> 0:23:36.119 what Wall Street bets wanted to do. They wanted to 0:23:36.160 --> 0:23:39.000 show those hedge funds that they were smarter, They wanted 0:23:39.000 --> 0:23:42.840 to outsmart the hedge funds that were betting against Game Stop. 0:23:43.320 --> 0:23:46.080 Were they successful? Did they stick it to the man? 0:23:46.800 --> 0:23:47.119 Yes? 0:23:47.240 --> 0:23:47.560 And no? 0:23:47.960 --> 0:23:53.520 Is my maybe disappointing answer, but I think that what happened, 0:23:53.680 --> 0:23:58.520 what has happened, has led to a real chastening of 0:23:58.800 --> 0:24:03.000 institutional investors. Institutional investors have realized that these traders are 0:24:03.080 --> 0:24:06.960 a real hour in the market when they come together. 0:24:07.680 --> 0:24:10.200 You know the David Goliath story. There are a lot 0:24:10.240 --> 0:24:13.439 of these little Davids who lost money, but there are 0:24:13.520 --> 0:24:16.320 really also a lot of Goliaths who lost a lot 0:24:16.320 --> 0:24:18.919 of money in this Even when you look at just 0:24:19.000 --> 0:24:21.280 the amount of short selling that hedge funds on Wall 0:24:21.320 --> 0:24:25.440 Street to it has just gone down. I mean, it's 0:24:25.480 --> 0:24:27.720 not as though it just went down and came back up. 0:24:28.320 --> 0:24:30.800 There is a fear in the markets and it has 0:24:30.960 --> 0:24:33.760 changed the dynamics. And you know, that goes back to 0:24:33.800 --> 0:24:38.080 the idea that this online community, like so many online communities, 0:24:38.520 --> 0:24:43.240 is about distrust. And obviously that's playing out in politics. 0:24:43.280 --> 0:24:45.560 You know that's playing out in the presidential election, but 0:24:45.600 --> 0:24:47.160 that's also playing out in the markets. 0:24:47.680 --> 0:24:50.639 That was Nathaniel Popper, author of The Trolls of Wall Street, 0:24:50.680 --> 0:24:53.520 how the outcasts and insurgents are hacking the markets. 0:24:53.200 --> 0:24:56.480 Still ahead on Bloomberg BusinessWeek. Franklin Templeton has one point 0:24:56.520 --> 0:24:59.920 six trillion dollars in assets under management bn y MEL 0:25:00.400 --> 0:25:03.760 overseeing nearly fifty trillion dollars in assets for its clients. 0:25:03.880 --> 0:25:07.000 Developed economies have aging demographics, and developing tend to have 0:25:07.200 --> 0:25:10.919 younger demographics except for China obviously, and it's going to 0:25:10.960 --> 0:25:13.399 have an impact on investing. There's going to be opportunities, 0:25:13.840 --> 0:25:16.800 but it's also going to drag down economies as a younger, 0:25:16.960 --> 0:25:20.760 smaller workforce has to support the folks that are older. 0:25:20.880 --> 0:25:24.399 Franklin CEO, Jenny Johnson and Bny Mellons Global Head of 0:25:24.400 --> 0:25:28.760 Investment Management, Ponica Smith's are up next. This is Bloomberg. 0:25:35.320 --> 0:25:39.160 You're listening to the Bloomberg Business Week podcast. Listen live 0:25:39.280 --> 0:25:42.200 each weekday starting at two pm Eastern on Apple Car 0:25:42.200 --> 0:25:45.159 Play and Android Auto with the Bloomberg Business App. You 0:25:45.200 --> 0:25:48.480 can also listen live on Amazon Alexa from our flagship 0:25:48.520 --> 0:25:51.560 New York station. Just say Alexa Play Bloomberg. 0:25:51.600 --> 0:25:56.439 Eleven thirty investors are uber focused on this week's coming 0:25:56.480 --> 0:25:59.399 FED meeting. I was in Nashville this past week for 0:25:59.440 --> 0:26:02.080 b and y ME and Pershing Insight twenty twenty four. 0:26:02.560 --> 0:26:05.320 It's a gathering for the wealth management industry. At IT, 0:26:05.359 --> 0:26:08.199 I moderated a keynote with two senior executives in the 0:26:08.240 --> 0:26:12.040 asset management business who see so much and who shared 0:26:12.040 --> 0:26:15.159 their outlook and views on everything from AI and alts 0:26:15.160 --> 0:26:20.080 to debt deglobalization, demographics, digitization, and geopolitics, and a lot more. 0:26:20.080 --> 0:26:23.000 Tim Here's some of that conversation that Carol had with 0:26:23.080 --> 0:26:26.840 Jenny Johnson, President and the chief executive Officer Franklin Templeton, 0:26:27.200 --> 0:26:30.680 and Hanikah Schmi's senior executive vice president and global head 0:26:30.680 --> 0:26:34.880 of Investment Management at BNY Mellon on the macro backdrop. 0:26:34.440 --> 0:26:37.840 Franklin Templeton one point six trillion in assets under management 0:26:37.880 --> 0:26:40.639 BN y mail and overseeing fifty trillion in assets for 0:26:40.680 --> 0:26:43.040 its clients. You both see a lot, Your firms see 0:26:43.040 --> 0:26:45.640 a lot. What are some of the broad secular trends 0:26:46.040 --> 0:26:48.280 that you are seeing that are really shaping the global 0:26:48.320 --> 0:26:53.160 economy and will influence the investing landscape for years to come. 0:26:53.440 --> 0:26:54.320 Jenny, let's start with you. 0:26:54.560 --> 0:26:57.040 Everybody's talking about kind of the whether you have five 0:26:57.160 --> 0:27:01.280 or three or six d's, but I'll start with the ds. Look, 0:27:01.359 --> 0:27:03.879 demographics is going to be key, and it's going to 0:27:03.920 --> 0:27:08.560 be you know, they're the develop economies have aging demographics 0:27:08.760 --> 0:27:13.359 and or developed economies have aging demographics, and developing tend 0:27:13.359 --> 0:27:18.800 to have younger demographics except for China obviously, and it's 0:27:18.840 --> 0:27:20.600 going to have an impact on investing there's going to 0:27:20.640 --> 0:27:24.040 be opportunities, but it's also going to drag down economies 0:27:24.119 --> 0:27:28.320 as a younger smaller workforce has to support the folks 0:27:28.320 --> 0:27:32.080 that are older, and then those economies that are developing 0:27:32.119 --> 0:27:34.360 with it, like India. Fifty six percent of the population 0:27:34.440 --> 0:27:36.840 of India one point four trillion people is under the 0:27:36.840 --> 0:27:39.600 age of twenty five. So as long as they can 0:27:39.760 --> 0:27:42.800 educate them, right, they can be participating in it. 0:27:42.840 --> 0:27:44.240 So demographics is important. 0:27:45.440 --> 0:27:48.080 Obviously, I'll call it disinflation, so we can say r 0:27:48.160 --> 0:27:50.560 d's obviously where the interest rate environment goes. 0:27:52.440 --> 0:27:54.840 You know, the supply chain. 0:27:56.520 --> 0:27:59.600 Sort of reorienting supply chains is going to be I 0:27:59.600 --> 0:28:02.639 think opportunity from an investment standpoint. 0:28:02.800 --> 0:28:04.199 It's also inflationary. 0:28:04.240 --> 0:28:06.879 There's a reason we were in China, the China plus 0:28:06.920 --> 0:28:10.400 one story. You were in China because it was cheap, right, 0:28:10.480 --> 0:28:14.159 So as soon as you start to decouple and you know, 0:28:14.280 --> 0:28:17.480 change your supply chain, you're going to end up adding 0:28:17.560 --> 0:28:20.040 some costs to that, not to mention tariffs and others 0:28:20.080 --> 0:28:25.280 from geopolitical decarbonization, right. You know. Unfortunately in the US 0:28:25.359 --> 0:28:29.480 it is a it's become this red and blue state conversation. 0:28:30.000 --> 0:28:31.560 You know, obviously honkey, you're. 0:28:31.400 --> 0:28:33.720 Based in London, you go to Europe, it is still 0:28:33.760 --> 0:28:35.879 a huge focus and the reality is over ninety percent 0:28:35.880 --> 0:28:38.600 of the world's you know, governments that control ninety percent 0:28:38.640 --> 0:28:41.760 of the world's GDP have committed to net zero. Whether 0:28:41.800 --> 0:28:44.600 they get there or not as irrelevant, but they're focused 0:28:44.640 --> 0:28:47.920 on investing on that. And then finally, I'll call it 0:28:47.960 --> 0:28:52.440 digitization is just this, Uh, we're living in a massive 0:28:52.480 --> 0:28:57.120 technological advanced age with AI things like blockchain and those 0:28:57.160 --> 0:28:59.440 are going to drive investment results. 0:28:59.520 --> 0:29:01.560 And then I got to throw in US debt. 0:29:02.320 --> 0:29:05.520 I don't think we're talking enough about the longer term 0:29:05.560 --> 0:29:07.680 impact of US debt. 0:29:07.920 --> 0:29:09.200 I feel like it's safe to say that all of 0:29:09.240 --> 0:29:12.640 us have spent our careers a few years ago, a 0:29:12.680 --> 0:29:15.320 few decades ago, where it came up in every market conversation, 0:29:15.600 --> 0:29:17.680 then it went away. It is back, and I feel 0:29:17.680 --> 0:29:19.600 like with a vengeance. All right, Hanaga, let's go to 0:29:19.640 --> 0:29:21.400 you in terms of the global macro. 0:29:21.840 --> 0:29:23.520 Yeah, so Jenny summed up. 0:29:23.600 --> 0:29:26.640 I summed it up very well, and we're sort of 0:29:26.640 --> 0:29:28.800 seeing the same trends. I was actually quite interested to 0:29:28.840 --> 0:29:31.120 see that the audience here, so you know, you think 0:29:31.160 --> 0:29:35.320 about the trends actually feel optimistic about investing. 0:29:35.360 --> 0:29:37.800 Are you surprised, Well, yes and no. 0:29:38.160 --> 0:29:40.960 And I would say the one thing, you know, we 0:29:41.320 --> 0:29:42.600 take a step back and think. 0:29:42.400 --> 0:29:43.320 About these trends. 0:29:43.400 --> 0:29:48.520 Trends create uncertainty, but trends can those trends and uncertainty 0:29:48.560 --> 0:29:53.840 can also create opportunities, right, because when there's more volatility 0:29:53.520 --> 0:29:57.360 in markets and in responses, people will respond differently, have 0:29:57.880 --> 0:30:03.000 different needs, and that can create investment opportunities. Now, having 0:30:03.040 --> 0:30:07.280 said that, in this world of what appears to be disinflation, 0:30:08.520 --> 0:30:11.760 we have an expectation that generally we're still at rates 0:30:12.080 --> 0:30:16.400 higher for longer, but we are expecting with the information 0:30:16.480 --> 0:30:21.960 that is starting to come out tighter sort of lower 0:30:23.720 --> 0:30:29.360 tighter employment, that we are expecting to see some cuts 0:30:29.720 --> 0:30:30.640 later in the year. 0:30:31.080 --> 0:30:32.040 But we're not going. 0:30:32.000 --> 0:30:35.080 To go back as low as where we've come from. 0:30:35.120 --> 0:30:36.880 And I do think we're going to get back to 0:30:36.920 --> 0:30:41.280 an environment we're having higher interest rates is more the 0:30:41.400 --> 0:30:44.120 norm than the environment we've come out of. 0:30:44.360 --> 0:30:45.720 One thing I want to ask you, and I think 0:30:45.840 --> 0:30:48.800 you know, we had the conversation that hey, folks, it 0:30:48.800 --> 0:30:51.280 was the low rate environment or zero rate environment, that 0:30:51.400 --> 0:30:54.360 was the abnormality. Yes, right, that what we're doing right 0:30:54.400 --> 0:30:56.240 now is getting back to normal. Having said that, you 0:30:56.280 --> 0:31:01.120 have a generation of investors advisors who were used to 0:31:01.640 --> 0:31:05.280 this dissiplationary environment. How does that, let me come back 0:31:05.280 --> 0:31:07.960 to you first, you know, how do we need to 0:31:08.040 --> 0:31:10.320 kind of address that? How do we have the smart 0:31:10.320 --> 0:31:13.800 conversation around that, you know, in terms of investing and 0:31:13.920 --> 0:31:14.520 what it means. 0:31:14.560 --> 0:31:16.280 So it's two ways, right, just sort of how we 0:31:16.360 --> 0:31:18.360 deal with it in our own organizations. 0:31:18.440 --> 0:31:18.800 We do. 0:31:18.840 --> 0:31:20.440 I'm sure you have it as well, Jenny, in our 0:31:20.480 --> 0:31:24.280 own organizations, people who have only been investors trained as 0:31:24.360 --> 0:31:28.040 investors this side of the GFC, of the generation that 0:31:28.240 --> 0:31:33.000 was also investing, well, good, Well, it's a lot of studies. 0:31:33.120 --> 0:31:37.240 And actually I call it the investor management is actually, 0:31:37.280 --> 0:31:42.520 thankfully an sector in which experience really matters, and you 0:31:42.600 --> 0:31:45.600 sort of do realize that they researching as cycles. 0:31:45.680 --> 0:31:48.160 But it does mean that we need to educate not 0:31:48.280 --> 0:31:51.360 only our own investors, but also our end clients in 0:31:51.480 --> 0:31:54.480 terms of what this type of environment and sort of 0:31:54.560 --> 0:31:58.840 having positive interest rates let's call it that means for 0:31:59.080 --> 0:32:02.680 investors and what it means for asset allocation. So we're 0:32:02.720 --> 0:32:07.760 spending a lot of time educating our end client, our advisors, 0:32:07.800 --> 0:32:10.200 but also our own, our own workforce. 0:32:10.800 --> 0:32:13.920 Jenny, your thoughts on that, well, I mean the reality 0:32:13.960 --> 0:32:16.160 is I think we're getting into what historically is a 0:32:16.160 --> 0:32:19.040 more normal interest rate environment, and if you look at it, 0:32:20.440 --> 0:32:24.320 you know the economy has actually been able to absorb 0:32:24.800 --> 0:32:27.760 the rates increases pretty well, uh. 0:32:27.800 --> 0:32:30.280 Pretty aggressive in the last year, right, yeah. 0:32:30.080 --> 0:32:30.760 Very aggressive. 0:32:31.080 --> 0:32:32.920 I mean I described to people as like, you know, 0:32:33.040 --> 0:32:35.120 of course you're going to see some slowing down data. 0:32:35.360 --> 0:32:39.120 They jammed on the brakes, right, you know exactly, it's whiplash. 0:32:39.200 --> 0:32:40.400 But we're also. 0:32:40.160 --> 0:32:42.880 In the camp and I caveat it with that Franklin Templeton. 0:32:43.000 --> 0:32:46.200 So we're one point six trillion, but we have we 0:32:46.280 --> 0:32:50.560 have five different uh CIOs who have slightly different views. 0:32:50.560 --> 0:32:53.600 Ci macro economic CIOs out have a slightly different view. 0:32:53.640 --> 0:32:56.320 So I'm gonna it's a little bit like there oh. 0:32:56.320 --> 0:32:59.680 Huge debate that matter of fact, that is insisted that, 0:33:00.160 --> 0:33:02.960 especially the ones that are the furthest apart to make 0:33:03.000 --> 0:33:05.680 sure that at least having an internal debate on it. 0:33:05.760 --> 0:33:09.480 But you know, I tend to and it's obviously converged 0:33:09.680 --> 0:33:13.360 over time, but you know, rates are higher for longer. 0:33:14.280 --> 0:33:19.320 The economy has definitely absorbed it pretty well. And you know, 0:33:19.320 --> 0:33:21.960 if I were to guests, I think it's maybe just 0:33:22.080 --> 0:33:23.600 one rate increase this year. 0:33:23.720 --> 0:33:25.680 But I think you're right because they're also to your 0:33:25.680 --> 0:33:31.240 earlier point. There continues to be inflationary pressure from animating 0:33:31.280 --> 0:33:32.920 from the supply chain as well. 0:33:33.000 --> 0:33:36.200 Right, So right, you look at also the conflicts around 0:33:36.240 --> 0:33:38.000 the world, which is putting pressure. 0:33:38.120 --> 0:33:41.040 Certainly we've seen this being based in London on our doorstep. 0:33:41.120 --> 0:33:43.200 We've seen it's an energy price, We've seen it in 0:33:43.240 --> 0:33:44.440 food prices. 0:33:44.040 --> 0:33:45.880 And it's coming down a bit. 0:33:46.000 --> 0:33:48.720 We're seeing that the Middle East conflict at the moment 0:33:48.840 --> 0:33:51.000 is also putting pressure on supply chain. 0:33:51.440 --> 0:33:52.760 You and I were talking. 0:33:52.480 --> 0:33:57.959 Earlier about aviation, Carol and flights. I mean, you can 0:33:58.200 --> 0:34:03.240 just simply fly or airlines can't have to reroot where 0:34:03.280 --> 0:34:05.560 they go. My flight, you know, anytime I go to 0:34:05.680 --> 0:34:08.719 Japan from long and it were now the flight is 0:34:08.760 --> 0:34:11.279 taking an extra two and a half hours because we're 0:34:11.280 --> 0:34:14.160 not going over Russia. So think about the cost of 0:34:14.160 --> 0:34:17.000 the time, the cost of fuel, and you know those 0:34:17.200 --> 0:34:20.440 costs will have to get passed on in the price 0:34:20.480 --> 0:34:23.520 of goods. So it's it's that inflationary pressure I think 0:34:23.600 --> 0:34:24.200 is still. 0:34:24.000 --> 0:34:26.160 There these big go ahead. I just go laugh. 0:34:26.200 --> 0:34:28.279 I was gonna say one of the advantages that all 0:34:28.320 --> 0:34:30.680 you have is you're from all different places in the US, 0:34:31.560 --> 0:34:33.880 because you know, sometimes you get I always say my 0:34:33.960 --> 0:34:35.680 mother was a doctor, and she said one thing that 0:34:35.680 --> 0:34:37.959 always bothered her as bad doctors is sometimes they didn't 0:34:38.000 --> 0:34:39.640 just look at what was in front of them. They 0:34:39.680 --> 0:34:42.239 always had to be proven through research. And sometimes it's 0:34:42.280 --> 0:34:44.520 obvious in front of you if you talk about the 0:34:44.640 --> 0:34:48.040 environment around you. I bought a truck for the farm 0:34:48.080 --> 0:34:51.799 this weekend. And I used to finance. I ran a 0:34:51.840 --> 0:34:54.680 financing company of autos, and so whenever I bought a car, 0:34:54.960 --> 0:34:56.879 I go into the dealership and say, show me your 0:34:56.880 --> 0:34:59.239 invoice and we'll start there and work our way up. 0:35:00.280 --> 0:35:03.840 It was let's start at manufacturers suggested retail price, and 0:35:03.920 --> 0:35:06.080 we'll tell you what fees we added. And it took 0:35:06.160 --> 0:35:08.680 me three months of walking out. I finally asked, somebody 0:35:08.680 --> 0:35:10.680 in California, can you see what you can get there? 0:35:11.160 --> 0:35:13.960 I was not going to buy a car for above MSRP. 0:35:14.640 --> 0:35:16.440 And you know what, in the end, I ended up 0:35:16.440 --> 0:35:19.200 doing that. Really, it has changed so much. And so 0:35:19.440 --> 0:35:22.600 you walk into a restaurant, are they still pretty full, 0:35:23.080 --> 0:35:25.920 you guys. You know, again, you only see where you're going, 0:35:26.000 --> 0:35:29.080 but as you ask each other around, it feels like 0:35:29.160 --> 0:35:30.799 it's still pretty robust out there. 0:35:30.880 --> 0:35:33.719 What concerns you do you have regarding the rise of 0:35:33.800 --> 0:35:37.200 nationalism and populism pushing us away from globalization and its 0:35:37.239 --> 0:35:40.239 effect on those emerging markets like what you folks are 0:35:40.239 --> 0:35:43.200 talking about feels like not going away anytime soon. 0:35:43.640 --> 0:35:44.000 Agreed. 0:35:44.040 --> 0:35:46.319 And that's inflationary, and that's inflationaty it. 0:35:46.239 --> 0:35:48.200 Is no, I agree as well. I mean it's a 0:35:48.440 --> 0:35:49.680 it's been a concern. 0:35:49.320 --> 0:35:52.080 Of mine and of ours for some time, this rise 0:35:52.080 --> 0:35:56.560 of nationalism, and also to benefit so our generation has 0:35:56.560 --> 0:35:59.480 already benefited from what I would call the peace dividend 0:35:59.560 --> 0:36:02.080 right sort of the Second World's War, and it was 0:36:02.120 --> 0:36:04.960 all about globalization. We all read the book The World 0:36:05.040 --> 0:36:07.799 Is Flat that came out, didn't you, Jenny, Yes, I 0:36:07.800 --> 0:36:10.360 did read some twenty years ago. 0:36:11.400 --> 0:36:12.360 But that is changing. 0:36:12.440 --> 0:36:15.000 We're all Jenny was talking about earlier we were all 0:36:15.080 --> 0:36:18.640 moving manufacturing to China. That is no longer happening with 0:36:18.760 --> 0:36:22.680 sort of reshoring, and that is adding to cost as well. 0:36:22.719 --> 0:36:27.000 So it's some mix of nationalism then a much more 0:36:27.160 --> 0:36:31.560 tense geopolitical environment as well. You throw that into the mix, 0:36:32.800 --> 0:36:37.000 and it is making for a much more combustible environment 0:36:37.239 --> 0:36:42.720 that I think will provide a challenge for corporates over 0:36:42.800 --> 0:36:45.360 the long term, notwithstanding what we're seeing. 0:36:45.400 --> 0:36:47.880 So just don't want to have hit on the debt piece, 0:36:47.920 --> 0:36:51.160 because again, let's go there. Yeah, I don't think we 0:36:51.239 --> 0:36:52.160 talk about it enough. 0:36:52.520 --> 0:36:56.040 So because there's a question wait wait wait wait wait 0:36:56.080 --> 0:36:58.960 wait wait, large debt has been an issue for a 0:36:59.000 --> 0:37:00.560 long time, but appears to we were to never how 0:37:00.600 --> 0:37:01.080 do we fix it? 0:37:01.120 --> 0:37:03.279 So it was funny because on Bloomberg this morning, they 0:37:03.280 --> 0:37:05.640 were like, well, come on, we've always always talked about that. 0:37:05.719 --> 0:37:07.920 Jenny listens to Blue Park, I love you all right, 0:37:08.480 --> 0:37:09.000 now you can go. 0:37:10.239 --> 0:37:13.520 You know, they were talking about, you know, come on, 0:37:13.680 --> 0:37:15.120 you know, we've always been an issue on. 0:37:15.080 --> 0:37:16.800 Debt and never seems to be a problem. 0:37:16.880 --> 0:37:20.440 Okay, Well, two thousand and seven, we had nine trillion 0:37:20.480 --> 0:37:22.880 dollars we're now I thought it was thirty three somebody 0:37:23.480 --> 0:37:25.120 thirty okay, thirty five trillion. 0:37:24.880 --> 0:37:27.920 One hundred and twenty percent of domestic product exactly. 0:37:27.960 --> 0:37:30.320 And then people say, well Japan's two fifty, and they're 0:37:30.400 --> 0:37:36.600 you know, okay, except our largest buyer of foreign debt 0:37:36.719 --> 0:37:39.200 is Japan at one point one trillion and China number 0:37:39.200 --> 0:37:41.920 two at eight hundred billion. Okay, we are not at 0:37:42.040 --> 0:37:44.880 thread of not being the reserve currency. We're going to 0:37:44.920 --> 0:37:46.960 continue to be to reserve currency because there's nowhere else 0:37:46.960 --> 0:37:47.920 SA anybody's going to go. 0:37:48.320 --> 0:37:51.920 That was Jenny Johnson, president and CEO at Franklin Templeton, 0:37:52.120 --> 0:37:55.560 along with Hanika Schmitt's senior executive vice president and global 0:37:55.600 --> 0:37:57.839 head of Investment Management over at B and Y Mellon. 0:37:58.160 --> 0:38:01.719 Catch that full conversation just had toymellon dot com. 0:38:01.640 --> 0:38:03.720 And that wraps up the first hour of the weekend 0:38:03.840 --> 0:38:07.040 edition of Bloomberg Business Week from Bloomberg Radio coming up 0:38:07.080 --> 0:38:11.120 in our next hour. Not easy being a CEO, especially 0:38:11.200 --> 0:38:14.560 in your first year. Enter Ty Wiggins, part coach, part 0:38:14.640 --> 0:38:16.160 cheerleader and part advisor. 0:38:16.280 --> 0:38:19.440 Plus women are increasingly stepping up to the tee golf tea. 0:38:19.480 --> 0:38:22.799 That is from the president of the PGA Tours superstore. 0:38:23.120 --> 0:38:25.960 And travelers. Yeah, they're still traveling. We'll talk about that 0:38:26.000 --> 0:38:27.160 with Hilton's CFO. 0:38:27.360 --> 0:38:30.880 And speaking of travel, why one hotelier is not putting 0:38:30.920 --> 0:38:32.200 guest needs first. 0:38:32.400 --> 0:38:35.400 I love this story. It's all coming Up. This is 0:38:35.400 --> 0:38:36.480 Bloomberg Business Week. 0:38:37.080 --> 0:38:40.600 You're listening to the Bloomberg Business Week podcast. Catch us 0:38:40.640 --> 0:38:43.880 live weekday afternoons from two to five pm Eastern Listen 0:38:43.920 --> 0:38:47.000 on Applecarplay and then Broud Auto with a Bloomberg Business 0:38:47.000 --> 0:38:51.000 act or watch us live on YouTube. 0:38:50.120 --> 0:38:52.040 Plenty Ahead in our second hour of the weekend edition 0:38:52.080 --> 0:38:54.880 of Bloomberg Business Week, including lessons from the top of 0:38:54.880 --> 0:38:57.440 the c suite with the author of the new CEO 0:38:57.880 --> 0:39:00.479 on the tips, tricks and mistakes to avoid for first 0:39:00.480 --> 0:39:01.640 time chief execs. 0:39:01.760 --> 0:39:05.439 Plus Hilton's CFO on opening two new properties every day, 0:39:05.880 --> 0:39:09.000 and our Pursuits team on the anti hotel and rise 0:39:09.040 --> 0:39:10.400 of regenerative tourism. 0:39:10.640 --> 0:39:15.000 Also move over, guys, okay, a record number of women 0:39:15.040 --> 0:39:17.799 are now hitting the green Jill Spiegel, president of the 0:39:17.800 --> 0:39:20.839 PGA Tour Superstore, on women taking on the game. 0:39:21.120 --> 0:39:23.759 First up this hour, you might recall that last month 0:39:23.800 --> 0:39:26.799 we got some news in the world of executive transitions, JB. 0:39:26.960 --> 0:39:30.640 Morgan CEO Jamie Diamond saying his succession was quote well 0:39:30.640 --> 0:39:33.400 on the way and could come sooner than five years. 0:39:33.680 --> 0:39:36.600 Morgan's Stanley chairman James Gorman has also announced he will 0:39:36.600 --> 0:39:38.319 seed his role at the end of the year. 0:39:38.600 --> 0:39:42.680 Managing CEO transitions can be a complex challenge for many businesses. 0:39:43.000 --> 0:39:46.280 Sometimes the new leader within their first few months, makes 0:39:46.280 --> 0:39:50.080 support decision or is unsuccessful in connecting with their employees 0:39:50.239 --> 0:39:51.799 or board. Bottom line tip not great. 0:39:52.080 --> 0:39:54.879 Enter ty Wiggins. His job is to guide CEOs through 0:39:54.920 --> 0:39:58.520 their first twelve to eighteen months, often acting part as 0:39:58.520 --> 0:40:01.480 a coach, part as a cheerleader, maybe a venting partner, 0:40:01.800 --> 0:40:03.640 a challenger, and always an advisor. 0:40:03.680 --> 0:40:06.400 I feel like I need one of those people, don't all? 0:40:07.400 --> 0:40:09.320 I mean, I know people who can be your challenger. 0:40:09.920 --> 0:40:13.439 You are I know lots? Actually all right, it's all though. 0:40:13.520 --> 0:40:16.840 In Tie's new book, it's entitled The New CEO Lessons 0:40:16.880 --> 0:40:19.600 from CEOs on how to Start Well and perform Quickly 0:40:19.880 --> 0:40:23.200 Minus the common Mistakes. Ty Wiggins is also Global lead 0:40:23.239 --> 0:40:26.600 of CEO and Executive Transition Practice at Russell Reynolds Associates 0:40:26.640 --> 0:40:27.879 and Executive Search Firm. 0:40:28.000 --> 0:40:30.440 The opportunity in the book here is to understand the 0:40:30.440 --> 0:40:33.960 pressures and the challenges that CEOs go through in their transition. 0:40:34.440 --> 0:40:36.239 And I think if you're a senior leader or an 0:40:36.280 --> 0:40:40.080 executive at an organization that's undergoing the CEO transition, the 0:40:40.120 --> 0:40:43.719 book will give you insight into how to best support 0:40:43.840 --> 0:40:46.880 and also slot in with with the new CEO. 0:40:47.640 --> 0:40:50.640 Well, you know, talk to us about who you talked 0:40:50.680 --> 0:40:54.040 to for this book to get some insight, and you 0:40:54.040 --> 0:40:58.080 know what is so important about maybe those first few days, 0:40:58.080 --> 0:41:01.200 first few weeks, first few months for CEO on the job, 0:41:01.200 --> 0:41:04.040 because I got to say, I feel like CEOs move 0:41:04.080 --> 0:41:07.880 around a lot as of late, and especially if it's 0:41:07.920 --> 0:41:10.800 a publicly held company and the stock isn't doing well, 0:41:11.000 --> 0:41:14.279 Activists are out there or media is all over it, 0:41:14.360 --> 0:41:17.040 and there's a lot of pressure now. 0:41:17.120 --> 0:41:20.440 In terms of the book, interviewed close to forty CEOs 0:41:20.680 --> 0:41:23.799 and then had the opportunity to speak to CEOs such 0:41:23.840 --> 0:41:26.880 as from on the Glider of PepsiCo and Hantzpsburg of Verizon, 0:41:26.960 --> 0:41:29.880 Carol Tomato of UPS and a string of others that 0:41:29.880 --> 0:41:32.600 are so cited in the book. You're right, CEO tenures 0:41:32.640 --> 0:41:36.279 are decreasing, which puts pressure on this early period in 0:41:36.360 --> 0:41:38.279 order to get a good start. And I think some 0:41:38.320 --> 0:41:41.080 of the early actions that CEOs take need to be 0:41:41.120 --> 0:41:44.440 really well thought through. We know that some key factors 0:41:44.480 --> 0:41:46.920 are the state of the business that they inherit, how 0:41:47.000 --> 0:41:50.279 quickly they assemble the right senior leadership team around them, 0:41:50.440 --> 0:41:53.759 and importantly what the former CEO does and how that 0:41:53.840 --> 0:41:55.960 individual leaves the organization. 0:41:55.600 --> 0:41:57.920 Share with us. Though, in some of the conversations that 0:41:57.960 --> 0:42:00.719 you had with CEOs, what did you get from them 0:42:00.880 --> 0:42:01.839 about that first year? 0:42:02.040 --> 0:42:04.439 A lot of humility, which was really good to hear. 0:42:04.520 --> 0:42:06.120 I mean, these are great CEOs, as. 0:42:06.040 --> 0:42:09.120 You've mentioned, and you know, some of them came internally 0:42:09.160 --> 0:42:11.360 within the organization, and I think there was a common 0:42:11.400 --> 0:42:14.359 thread around how difficult the CEO role is, how there's 0:42:14.400 --> 0:42:17.640 no real sandbox for it in terms of getting ready. 0:42:17.800 --> 0:42:19.399 It's a shock. We've talked about the. 0:42:19.360 --> 0:42:22.120 Loneliness a lot across different medias, and it's an actual 0:42:22.120 --> 0:42:23.360 issue for a lot of CEOs. 0:42:23.400 --> 0:42:24.840 And the responsibility. 0:42:24.960 --> 0:42:26.879 You know, when I asked what the best and worst 0:42:26.880 --> 0:42:29.520 part about being a CEO is, often the answers are same. 0:42:29.600 --> 0:42:33.840 The responsibility. You know, these are individuals that want the responsibility. 0:42:33.120 --> 0:42:35.120 That want to lead, They want to have an impact 0:42:35.160 --> 0:42:38.520 on the organization in their community, but they also feel 0:42:38.560 --> 0:42:42.040 the weight of that responsibility in terms of being responsible 0:42:42.080 --> 0:42:44.920 for the financials. But also you know, there are employees, 0:42:44.960 --> 0:42:47.840 their employees, families, et cetera. In terms of the market 0:42:47.880 --> 0:42:49.560 and the communities that they lead. 0:42:49.920 --> 0:42:52.279 What do you think about like those CEOs that are 0:42:52.280 --> 0:42:54.960 at a company leave and then they come back, like 0:42:55.000 --> 0:42:57.799 a Bob Iger, you know, Disney Revere, more like a 0:42:57.840 --> 0:43:01.720 Howard Schultz or a Howard Schultz right come back and 0:43:02.000 --> 0:43:04.480 you know their track record was incredible when they left, 0:43:04.520 --> 0:43:07.200 certainly by byger right and then came back into a 0:43:07.239 --> 0:43:10.080 situation where the company was under some pressure because if 0:43:10.080 --> 0:43:12.600 it's streaming, pivot and so on and so forth, you know, 0:43:13.040 --> 0:43:15.440 is he like kind of starting from scratch again a 0:43:15.440 --> 0:43:18.640 little bit because some of the dynamics have changed. 0:43:18.960 --> 0:43:21.759 I think it's you know, to have CEO return, you know, 0:43:21.840 --> 0:43:25.120 depending on the individual and the organization, it can represent 0:43:25.160 --> 0:43:27.680 a number of things in terms of a succession that 0:43:27.719 --> 0:43:32.200 hasn't been successful. It obviously shows a passion and a 0:43:32.280 --> 0:43:34.160 love for the organization to come back. 0:43:34.320 --> 0:43:34.520 You know. 0:43:34.560 --> 0:43:38.080 In many cases it's disruptive depending on the time period, 0:43:38.480 --> 0:43:40.600 you know, because we do expect the new CEO. 0:43:40.440 --> 0:43:44.040 To see the world differently and to take a new 0:43:44.120 --> 0:43:45.600 long term view of the organization. 0:43:45.760 --> 0:43:48.240 So if there are changes that need to be reversed, 0:43:48.239 --> 0:43:49.960 that could be a little bit unsettling. 0:43:50.320 --> 0:43:51.960 But I think for the individuals involved. 0:43:52.160 --> 0:43:54.000 You know, I think if they're leaving at the right 0:43:54.040 --> 0:43:56.640 time in their career, then you know, I think it's 0:43:56.719 --> 0:43:59.520 less than ideal for them to need to return. But 0:44:00.160 --> 0:44:01.800 each individual case will be different. 0:44:02.120 --> 0:44:07.040 Ty, We've heard criticisms about boards being too close to 0:44:07.120 --> 0:44:10.680 their CEOs. Tesla, for example, one of the board members 0:44:10.680 --> 0:44:15.160 there is Kimball Musk Elon Musk's brother. Are boards too 0:44:15.160 --> 0:44:17.839 close to their CEOs? Shouldn't they be more independent from 0:44:17.920 --> 0:44:20.120 one another? They're supposed to keep them honest. 0:44:19.880 --> 0:44:21.080 Right, absolutely? 0:44:21.120 --> 0:44:23.920 I mean the board, the board role is crucial to 0:44:24.200 --> 0:44:27.239 the governance of the organization and they do play a 0:44:27.239 --> 0:44:29.920 specific role in One of those key roles that they 0:44:29.960 --> 0:44:32.920 player is to hire and fire the CEO, And so 0:44:33.040 --> 0:44:36.320 this is any CEO transition lands heavily on the board 0:44:36.320 --> 0:44:40.200 as well as all groups of individuals, and you know, 0:44:40.280 --> 0:44:44.160 within organizations, it can be quite a challenge to continue 0:44:44.160 --> 0:44:49.000 to maintain that independence, especially when you have a very successful, 0:44:49.320 --> 0:44:50.920 very dominant CEO. 0:44:51.360 --> 0:44:55.120 Should CEOs be allowed to serve as chairs of boards 0:44:55.120 --> 0:44:56.040 in your opinion. 0:44:55.920 --> 0:44:58.359 Well, I think it's common practice in a lot of organizations, 0:44:58.480 --> 0:45:01.719 especially in the United States. In other countries it's less 0:45:01.719 --> 0:45:05.959 common I think as long as there is an independent 0:45:06.960 --> 0:45:10.840 senior director to provide that council, that support and that challenge, 0:45:11.160 --> 0:45:14.640 it does allow CEOs to move with greater pace. So 0:45:14.680 --> 0:45:17.759 if the organization is in trouble, then that allows for 0:45:17.920 --> 0:45:21.080 quicker decision making. But I think that if we look 0:45:21.120 --> 0:45:24.520 at the independence that we require, there's argument for the 0:45:24.560 --> 0:45:26.520 CEO to be separate to the chair role. 0:45:26.760 --> 0:45:29.520 Having said that, is there a common mistake in talking 0:45:29.560 --> 0:45:32.360 to CEOs that you find that they all say, this 0:45:32.520 --> 0:45:34.320 is the one I made? Is there a common mistake 0:45:34.360 --> 0:45:34.960 among them? 0:45:35.040 --> 0:45:37.840 The common mistake is generally around something that they say 0:45:38.040 --> 0:45:41.600 in a fairly public environment or an early action that 0:45:41.640 --> 0:45:46.680 they make without enough context and without enough information. And 0:45:46.719 --> 0:45:48.400 this is a question that comes up a lot, and 0:45:48.440 --> 0:45:52.239 the answer is, really it's any mistake that causes the 0:45:52.280 --> 0:45:55.239 board to doubt and to and where you might lose 0:45:55.280 --> 0:45:58.400 the confidence of the board because that obviously significantly impacts 0:45:58.400 --> 0:46:00.800 your tenure and your ability to delay the longer term. 0:46:00.880 --> 0:46:03.480 Hey, you know this kind of spoke to us. There 0:46:03.560 --> 0:46:05.160 is a section of the book about dealing with the 0:46:05.160 --> 0:46:07.880 street and here we are, you know, coming off an 0:46:07.880 --> 0:46:10.080 earning season, but we're always thinking about the next one. 0:46:10.160 --> 0:46:13.640 But you do talk about Mark Klaus, who was CEO 0:46:13.680 --> 0:46:17.440 at Pinnacle before joining Campbell's and just the level of 0:46:17.520 --> 0:46:22.520 engagement and communicating with investors when he got to Campbell. 0:46:22.560 --> 0:46:25.440 I mean, that's that can be a big thing and 0:46:25.560 --> 0:46:28.120 kind of a real eye opener, right for CEOs who 0:46:28.160 --> 0:46:29.399 are early and on the job. 0:46:29.880 --> 0:46:34.400 Absolutely, unless you've been a CIO or a CFO and 0:46:34.440 --> 0:46:38.279 had you know, extensive experience, the the investor relations will 0:46:38.320 --> 0:46:41.680 be fairly new and it's a challenging period of time. 0:46:41.840 --> 0:46:44.759 You know, the people will often underestimate the amount of 0:46:44.760 --> 0:46:48.320 preparation that goes into delivering results and doing the investor 0:46:48.400 --> 0:46:51.440 road shows and you know, trying to form that relationship 0:46:51.440 --> 0:46:55.160 really early to get buy into you know, what you're 0:46:55.200 --> 0:46:57.319 planning to do and what you're thinking about doing, so 0:46:57.680 --> 0:46:59.400 you know, this is where it's really important that you 0:46:59.520 --> 0:47:03.239 surround yourself with good IR people and you know, people. 0:47:03.000 --> 0:47:04.680 To support you in those conversations. 0:47:05.080 --> 0:47:07.560 And you know, if it's early in your tenure that 0:47:07.600 --> 0:47:09.880 you deliver results, then you have a little bit of 0:47:09.880 --> 0:47:12.359 grace and you should take full advantage of that. 0:47:12.520 --> 0:47:14.000 Hey, one of the things that we wanted to get 0:47:14.000 --> 0:47:17.759 into and Tim is and are prepping for this, Tim 0:47:17.840 --> 0:47:21.560 you kind of highlighted this, But executive compensation, CEO compensation. 0:47:21.800 --> 0:47:24.320 I mean, I think about sometimes when there's a company 0:47:24.880 --> 0:47:28.680 in trouble, right Peloton, you know, and you have Barry 0:47:28.719 --> 0:47:31.400 McCarthy comes in. He just stepped down his Peloton. CEO 0:47:31.400 --> 0:47:34.160 had total compensation one hundred and sixty eight million dollars 0:47:34.200 --> 0:47:37.040 in twenty twenty two. To be fair, most of that 0:47:37.160 --> 0:47:41.600 compensation ninety nine point seven was option awards, so tied 0:47:41.600 --> 0:47:43.080 to the company stock price. But it's a lot of 0:47:43.080 --> 0:47:45.560 money for a company that's you know, got a dwindling 0:47:45.640 --> 0:47:48.560 market cap. I think barely over a billion here at 0:47:48.560 --> 0:47:52.040 this point. You know, it's an like, I hear what 0:47:52.040 --> 0:47:54.440 you like. It can be a tough job. I understand 0:47:54.480 --> 0:47:57.719 there's a lot that comes out of CEO today, but 0:47:57.960 --> 0:48:00.719 it does feel like they're taken care of. 0:48:01.239 --> 0:48:04.279 Yeah, compensation is not an area that I get involved in. 0:48:04.880 --> 0:48:07.879 I know that it's a contested issue. I know that 0:48:08.360 --> 0:48:11.400 the CEOs that I work with certainly are really aware 0:48:11.480 --> 0:48:15.359 of that in terms of their role, you know, And 0:48:15.640 --> 0:48:17.719 you know, it's nice to it's nice to think that 0:48:17.719 --> 0:48:20.080 the people that I work with, especially, you know, this 0:48:20.160 --> 0:48:22.880 is not the driving force for what they're doing, why 0:48:22.960 --> 0:48:25.480 they're doing what they're doing. Oh, and it is really 0:48:25.520 --> 0:48:29.440 about the opportunity to have an impact over such a 0:48:29.560 --> 0:48:33.080 large group of individuals and a responsibility and I guess 0:48:33.080 --> 0:48:36.720 a belief that they can do better and make improvements 0:48:36.840 --> 0:48:40.400 and you know, really serve. So you know, again, you know, 0:48:40.400 --> 0:48:42.719 I probably have a privileged group, but that's not the 0:48:42.800 --> 0:48:44.919 key driver for why they're doing what they're doing. 0:48:45.080 --> 0:48:46.480 Hey, one of the things they do want to go 0:48:46.520 --> 0:48:48.399 to is chapter eleven, if I could do it all 0:48:48.440 --> 0:48:53.040 over again, and you share a collection of pieces of 0:48:53.040 --> 0:48:57.000 advice from some of the CEOs you talk to. 0:48:57.880 --> 0:49:01.200 Yeah, when when people reflect on their their time early 0:49:01.280 --> 0:49:03.319 in their CEO role, there's a couple of things that 0:49:03.360 --> 0:49:06.080 come up, you know, most often, the most popular is 0:49:06.520 --> 0:49:09.640 that they would move faster on their executive leadership team. 0:49:09.800 --> 0:49:12.840 You know, being CEO is a role you can't do 0:49:12.920 --> 0:49:13.439 on your own. 0:49:13.640 --> 0:49:16.480 You must have the right people around and for a 0:49:16.480 --> 0:49:19.319 bunch of reasons, you know, we don't move as. 0:49:19.239 --> 0:49:20.360 Quickly as necessarily. 0:49:20.360 --> 0:49:22.440 Our gut is telling us to move, and there are 0:49:22.480 --> 0:49:24.040 other restrictions in terms of momentum. 0:49:24.120 --> 0:49:26.280 So the first is that they would move faster. 0:49:26.760 --> 0:49:29.319 The second is that they would engage the board more 0:49:29.360 --> 0:49:32.880 effectively and earlier, so similar to dealing with the street. 0:49:33.040 --> 0:49:35.080 You know, working with a board for the first time 0:49:35.440 --> 0:49:38.839 as CEO, not as an a senior executive is quite 0:49:38.880 --> 0:49:42.520 a ship and it usually spend more time on board 0:49:42.520 --> 0:49:45.000 and board related activities in your first year than you expect, 0:49:45.280 --> 0:49:46.640 so you really need to factor that in. 0:49:46.800 --> 0:49:47.919 And the third is that they. 0:49:47.840 --> 0:49:50.719 Would flex their leadership style more so they hang on 0:49:50.920 --> 0:49:53.040 to some of the things that served them well before 0:49:53.440 --> 0:49:56.319 without really accepting and stepping into the full gamut of 0:49:56.360 --> 0:49:59.480 the CEO role, accepting the good and the bad parts 0:49:59.480 --> 0:50:02.640 of it. In terms of driving the outcomes that they 0:50:02.960 --> 0:50:04.759 that they know they need to deliver based on what 0:50:04.840 --> 0:50:08.080 they've promised the organization and the board and the market. 0:50:08.400 --> 0:50:09.960 This is one of the things that you see second 0:50:10.000 --> 0:50:12.759 time CEO is doing much better than first time CEOs. 0:50:12.800 --> 0:50:16.560 Is this pre contracting with the board is outlining, you know, 0:50:16.640 --> 0:50:19.399 this conversation of when not if I want to make 0:50:19.400 --> 0:50:22.800 a significant change or point the organization in a different direction, 0:50:22.840 --> 0:50:25.200 how are you going to respond and enhance this case, 0:50:25.239 --> 0:50:27.480 he was really keen to make sure he didn't get 0:50:27.480 --> 0:50:29.080 six or twelve months down the track and have the 0:50:29.120 --> 0:50:30.960 board say I didn't know you were going to do 0:50:31.000 --> 0:50:32.360 this or I didn't know you were going to do that, 0:50:33.120 --> 0:50:35.880 and it was really key to him moving fast exactly. 0:50:36.080 --> 0:50:38.799 Hey, is Elon one of the new CEOs? 0:50:38.840 --> 0:50:39.439 In your view? 0:50:40.120 --> 0:50:41.240 I think he's a different CEO? 0:50:41.640 --> 0:50:43.839 Well, I think there's you know, there are very few 0:50:43.840 --> 0:50:48.440 individuals like him, and you know, in many ways the 0:50:48.480 --> 0:50:52.960 impact and influence has had in his space. Yeah, I 0:50:52.960 --> 0:50:55.440 would say he's definitely in that new category. 0:50:55.800 --> 0:50:58.800 That was Ty Wiggins, Global Lead of CEO and Executive 0:50:58.800 --> 0:51:02.640 Transition Practice at Russell Reynolds Associates his book The New 0:51:02.719 --> 0:51:05.920 CEO Lessons from CEOs on how to Start well and 0:51:06.000 --> 0:51:06.800 perform Quickly. 0:51:06.960 --> 0:51:09.960 You're listening to Bloomberg Business Week coming up Revenge Travel? 0:51:10.400 --> 0:51:13.319 Is it losing its appeal? Are travelers still booking that 0:51:13.320 --> 0:51:17.399 wellness trip to Dubai? Are you Tim Nope? Okay, Well, 0:51:17.400 --> 0:51:20.080 we'll see what the Hilton CFO Kevin Jacobs has to 0:51:20.080 --> 0:51:20.640 say about all. 0:51:20.640 --> 0:51:24.320 Of this, plus golf's growing interests from women since the pandemic. 0:51:24.640 --> 0:51:27.080 A member of the PGA team shares more. On the 0:51:27.120 --> 0:51:29.080 other side, this is Bloomberg. 0:51:35.600 --> 0:51:39.439 You're listening to the Bloomberg Business Week Podcast. Listen live 0:51:39.560 --> 0:51:42.760 each weekday starting at two pm Eastern on applecar Play 0:51:42.760 --> 0:51:45.640 and Android Auto with the Bloomberg Business App. You can 0:51:45.680 --> 0:51:48.920 also listen live on Amazon Alexa from our flagship New 0:51:48.960 --> 0:51:54.440 York station, Just Say Alexa, Play Bloomberg eleven thirty Bloomberg Opinions. 0:51:54.480 --> 0:51:57.000 Andrea Fels did writing this past week that after three 0:51:57.080 --> 0:51:59.000 years of rushing to book trips in the week of 0:51:59.120 --> 0:52:04.719 pandemic era strictions sharply hire fares, protests against tourism, fatigue 0:52:04.719 --> 0:52:07.920 from endless hours spent at airports, and income squeeze by 0:52:07.920 --> 0:52:10.000 inflation are all taking their toll. 0:52:10.280 --> 0:52:12.680 That was top of mind when Kevin Jacobs joined US. 0:52:12.840 --> 0:52:16.120 He's president and CFO over at Hilton at Worldwide Holdings 0:52:16.480 --> 0:52:19.200 home of course, to twenty three brands, including Hilton Hotels 0:52:19.200 --> 0:52:23.279 and Resorts, Waldorf Astoria, Hampton, Double Tree, Embassy Suites, and 0:52:23.360 --> 0:52:26.560 new brands like Spark by Hilton and Live Smart Studios 0:52:26.600 --> 0:52:27.080 by Hilton. 0:52:27.280 --> 0:52:30.719 I think leisure travel has been normalizing off of kind 0:52:30.760 --> 0:52:33.120 of the boom that it had during COVID, but we're 0:52:33.160 --> 0:52:35.759 still seeing growing demand for travel, and in fact, most 0:52:35.800 --> 0:52:39.240 people expect the summer travel season to be quite strong, 0:52:39.760 --> 0:52:42.560 and you know, business travel is coming back and Group 0:52:42.680 --> 0:52:46.040 actually is leading the way, which wasn't the case during COVID, 0:52:46.120 --> 0:52:47.680 But you now have a lot of pent up demand 0:52:47.760 --> 0:52:50.520 for meetings and events that is fueling growth in our 0:52:50.520 --> 0:52:51.160 business as well. 0:52:51.200 --> 0:52:53.000 So we're still seeing trends. 0:52:53.040 --> 0:52:55.239 You know, certainly same store sales growth is not going 0:52:55.280 --> 0:52:56.799 to be what it was last year, but it's still 0:52:56.840 --> 0:52:59.600 going to be quite strong for this year going forward. 0:53:00.360 --> 0:53:02.800 Where are you seeing the best growth, the biggest growth, 0:53:02.800 --> 0:53:06.040 like which portion of the hotel properties or which brands 0:53:06.040 --> 0:53:07.080 are seeing the best growth. 0:53:07.280 --> 0:53:09.279 Well, if you think, I mean really all of the 0:53:09.320 --> 0:53:11.359 brands are seeing the best growth, the higher segments are 0:53:11.800 --> 0:53:14.520 growing better than the really lower segments at the moment, 0:53:14.680 --> 0:53:17.560 and our same store sales outlook as two to four 0:53:17.560 --> 0:53:19.319 percent for the year, and we think the US will 0:53:19.320 --> 0:53:21.200 be sort of at the lower end of that range 0:53:21.520 --> 0:53:23.680 and everywhere else outside of the US will kind of 0:53:23.719 --> 0:53:26.360 be at the higher end of that range. So international 0:53:26.400 --> 0:53:29.000 growth is still a bit stronger than the US, but 0:53:29.080 --> 0:53:31.759 still growing, you know, reasonably well, like kind of low 0:53:31.840 --> 0:53:33.280 single digit same store sales. 0:53:33.120 --> 0:53:35.000 Growth, So you're seeing sort of the same growth, whether 0:53:35.040 --> 0:53:37.600 we're talking sort of the budget lower end brands in 0:53:37.640 --> 0:53:40.799 the portfolio versus the high end brands in the portfolio. 0:53:41.000 --> 0:53:43.160 Well, in our portfolio, we don't have a lot of budget. 0:53:43.160 --> 0:53:45.920 We have a premium economy brand that you mentioned called Spark, 0:53:46.000 --> 0:53:48.840 and we're really not as distributed at the really low segments, 0:53:48.880 --> 0:53:50.360 which you know, they've been. 0:53:50.239 --> 0:53:52.280 A little bit weaker, but that's a lot of that has. 0:53:52.160 --> 0:53:55.560 To do with more difficult comparables to last year because 0:53:55.560 --> 0:53:57.920 they were quite strong, and there's a little bit of 0:53:57.960 --> 0:54:01.120 an effect of that consumer sort of slowing down a 0:54:01.200 --> 0:54:05.240 little bit, but mostly across our growth is pretty consistent 0:54:05.280 --> 0:54:06.680 across the segments that we operate. 0:54:06.800 --> 0:54:09.640 Any signs of softness are folks trading down at all. 0:54:10.040 --> 0:54:12.279 We're not seeing trade down and we're not. 0:54:12.239 --> 0:54:15.400 Really again, other than the really low end of the business, 0:54:15.440 --> 0:54:17.400 which is a little bit lower than where we operate, 0:54:17.440 --> 0:54:21.360 we're really not seeing the consumer pullback. The consumer still feels, 0:54:21.800 --> 0:54:22.760 you know, really solid. 0:54:23.400 --> 0:54:23.759 All right. 0:54:23.920 --> 0:54:25.799 We know you guys have a ton of properties, about 0:54:25.800 --> 0:54:28.400 seventy five hundred properties including time shares. I think that 0:54:28.480 --> 0:54:30.000 was at the end of last year. I think when 0:54:30.000 --> 0:54:32.040 I was checking some of the data points, you own 0:54:32.040 --> 0:54:34.319 a small amount, you manage a bunch the bulk though, 0:54:34.360 --> 0:54:37.440 is franchise ease. What's top of mind for your franchies 0:54:37.800 --> 0:54:40.680 French cheese. They're not franchiese. That's like a grilled cheese sandwich. 0:54:40.920 --> 0:54:45.320 Franchisee owners, I'm a little hungry. What are their stress points? 0:54:45.400 --> 0:54:47.880 And again, does the growth cut of mirror or the 0:54:47.920 --> 0:54:50.680 upside mirror what you are telling us that you've already 0:54:50.719 --> 0:54:51.560 kind of shared with us. 0:54:51.920 --> 0:54:53.600 Yeah, I mean, like you said, you know, upwards of 0:54:53.600 --> 0:54:56.359 eighty percent of our hotels now, our franchises are are 0:54:56.480 --> 0:54:58.200 you know, we manage a bunch of hotels and our 0:54:58.239 --> 0:55:00.120 ownership segment is quite small, but you know, they're Our 0:55:00.160 --> 0:55:02.880 outlook is quite good. Our you know, our construction starts, 0:55:03.000 --> 0:55:04.640 you know, so new development. First of all, we think 0:55:04.640 --> 0:55:07.399 we're going to open will open nearly two hotels per 0:55:07.480 --> 0:55:10.279 day this year, right, So our prospects for growth are 0:55:10.360 --> 0:55:14.239 quite strong. Most of our franchisees are seeing the same 0:55:14.280 --> 0:55:17.000 thing we're seeing. The prospects for development are quite good. 0:55:17.320 --> 0:55:21.239 Our construction starts, so new hotels going under development was 0:55:21.280 --> 0:55:23.719 up forty five percent in the first quarter. We think 0:55:23.760 --> 0:55:25.520 that will continue to be up this year, and we 0:55:25.560 --> 0:55:27.759 actually we think we'll start more rooms under construction this 0:55:27.880 --> 0:55:30.279 year than we did pre pandemic. 0:55:30.400 --> 0:55:32.640 So I think, you know, look, it's not it's not 0:55:33.120 --> 0:55:34.279 equal everywhere. 0:55:34.320 --> 0:55:36.840 And you know, our franchises are looking at prospects for 0:55:36.960 --> 0:55:39.920 revenue growth. They're thinking about their cost profile, right because 0:55:40.320 --> 0:55:42.960 with this great inflation that has fueled the revenue in 0:55:43.000 --> 0:55:45.640 our business, you know, there's cost inflation. So we're working 0:55:45.640 --> 0:55:48.279 with them to think about how to drive incrementals cost 0:55:48.320 --> 0:55:51.160 savings in the hotels. But generally speaking, our owners and 0:55:51.200 --> 0:55:52.759 franchises are quite fullish as well. 0:55:52.800 --> 0:55:54.360 We want to talk a bit more about the cost equation, 0:55:54.400 --> 0:55:55.600 but I want to go back to that, you know, 0:55:55.960 --> 0:55:58.920 two new hotels every day. You guys did come out 0:55:58.920 --> 0:56:03.279 with some news about expanding your lifestyle portfolio, doubling it 0:56:03.320 --> 0:56:06.480 to seven hundred hotels within the next four years. How come? 0:56:06.680 --> 0:56:09.200 How and where? Like, where are you doubling? Where are 0:56:09.280 --> 0:56:11.600 you opening two new hotels every day? 0:56:12.000 --> 0:56:14.080 Well, it's really across the globe, and so yeah, we 0:56:14.080 --> 0:56:16.440 put out a press release about our growth and lifestyle 0:56:16.480 --> 0:56:19.880 we're celebrating our tenth anniversary in the lifestyle space. The 0:56:19.920 --> 0:56:22.799 lifestyle segment broadly has grown fifty percent over the last 0:56:22.840 --> 0:56:26.560 five years, and it's been double. The addition the additional 0:56:26.640 --> 0:56:29.000 hotel count and lifestyle hotels has been double out of 0:56:29.040 --> 0:56:31.760 the broader industry. So these are very popular type brands. 0:56:32.040 --> 0:56:34.200 We've been in the space for a while. We recently 0:56:34.320 --> 0:56:37.399 acquired the Graduate brand, and we entered into a joint 0:56:37.480 --> 0:56:40.160 venture with another group to bring the Nomad brand, which 0:56:40.200 --> 0:56:42.520 is a luxury lifestyle brand, into our portfolio. So we 0:56:42.560 --> 0:56:46.040 now have six great lifestyle brands. And yeah, we think 0:56:46.080 --> 0:56:47.880 we can go from what we have three hundred and 0:56:47.880 --> 0:56:50.440 fifty lifestyle hotels today. We think we'll have seven hundred 0:56:50.480 --> 0:56:52.759 within the next four years and the growth will really 0:56:52.760 --> 0:56:53.480 be around the world. 0:56:53.840 --> 0:56:56.319 So, Kevin, how do you make sure that the new 0:56:56.360 --> 0:56:58.640 properties that you add, as you mentioned two new hotels 0:56:58.680 --> 0:57:00.680 per day around the world, how do you make sure 0:57:00.680 --> 0:57:05.440 that the franchisees are geographically protected from competing with Hilton 0:57:05.880 --> 0:57:07.799 and other owners of Hilton when they're out there. 0:57:07.880 --> 0:57:09.880 Well, yeah, I mean we're pretty careful. 0:57:09.920 --> 0:57:12.400 Look where the interests are aligned, right, one hundred nearly 0:57:12.560 --> 0:57:14.400 virtually one hundred percent of the capital. 0:57:14.120 --> 0:57:16.080 For our growth comes from other. 0:57:15.960 --> 0:57:19.480 From hotel and people investing in hotels, either building new 0:57:19.480 --> 0:57:22.480 hotels or buying hotels and affiliating with them in our brands, 0:57:22.720 --> 0:57:25.400 and we're invested in their success because if they're successful, 0:57:25.440 --> 0:57:27.280 then they will choose us for their next deals, and 0:57:27.320 --> 0:57:30.400 that that obviously enhances our growth rate. And so the 0:57:30.440 --> 0:57:31.960 way you do it is you're you know, you're just 0:57:32.120 --> 0:57:34.200 very careful. We work with each and on each and 0:57:34.240 --> 0:57:37.240 every new hotel deal, we work with our partners to 0:57:37.320 --> 0:57:39.960 find the right locations for the right brands, and and 0:57:40.000 --> 0:57:42.480 we we want and need each of our hotels to 0:57:42.520 --> 0:57:43.200 be successful. 0:57:43.480 --> 0:57:45.640 So it's sort of it's it's pretty self regulating. 0:57:45.680 --> 0:57:48.200 Interests are aligned, and none of us want to put 0:57:48.200 --> 0:57:50.920 a hotel, you know, on top of another hotel where 0:57:50.920 --> 0:57:51.360 they're going to. 0:57:51.360 --> 0:57:52.200 Compete too much. 0:57:52.240 --> 0:57:54.400 And the reality is is we it's up to us 0:57:54.440 --> 0:57:58.040 to keep growing our customer base, having our brands be 0:57:58.120 --> 0:58:00.600 strong and driving that premium for fom rmans so that 0:58:00.640 --> 0:58:02.560 our owners make more money when they invest with us, 0:58:02.600 --> 0:58:04.360 And if they make more money when they invest with us, 0:58:04.360 --> 0:58:06.800 then they'll choose us for our next deals for their 0:58:06.840 --> 0:58:09.720 next deals, excuse me, which which enhances our growth rate. 0:58:09.840 --> 0:58:12.880 Hey, Kevin, our Bloomberg intelligence team of analysts, noting that 0:58:12.920 --> 0:58:16.360 you guys cleared your debt maturity schedule before twenty twenty five, 0:58:16.360 --> 0:58:19.120 the majority now do in twenty twenty eight and beyond 0:58:19.200 --> 0:58:23.000 cushioning it against sector headwind So it sounds like it 0:58:23.080 --> 0:58:27.000 really gives you, guys, really some you know, freedom to 0:58:27.120 --> 0:58:31.440 move around no matter what might happen in the economic environment, 0:58:31.440 --> 0:58:32.960 at least for a couple of years. 0:58:33.080 --> 0:58:33.600 Is that fair. 0:58:34.000 --> 0:58:37.080 We've always been focused on financial flexibility, right, So it's 0:58:37.080 --> 0:58:39.480 not just the ultimate quantum of our debt or the 0:58:39.480 --> 0:58:41.280 cost of our debt, which of course we care about 0:58:41.320 --> 0:58:44.320 a lot, but we're always looking for opportunities to push maturity. 0:58:44.320 --> 0:58:46.560 We have one small maturity in twenty twenty five, and 0:58:46.640 --> 0:58:49.360 then and then we don't have maturities for a while, 0:58:49.440 --> 0:58:51.600 and that served us well in COVID, you know, and 0:58:51.760 --> 0:58:54.520 COVID when our revenues went to year zero, we didn't 0:58:54.560 --> 0:58:56.600 need to amend our credit facility because we didn't have 0:58:56.600 --> 0:58:59.560 any near term maturities. We didn't breach any covenants and 0:59:00.160 --> 0:59:03.000 always been leally focused on financial flexibilities. 0:59:03.120 --> 0:59:06.800 That's Kevin Jacobs, President and CFO at Hilton Worldwide Holdings. 0:59:06.880 --> 0:59:09.480 So Hilton is home to golf properties in case you 0:59:09.480 --> 0:59:12.800 didn't know, and increasingly you may find more women playing 0:59:12.800 --> 0:59:16.200 on those properties. Thanks to the pandemic, more women are 0:59:16.480 --> 0:59:17.440 engaging in the sport. 0:59:17.560 --> 0:59:20.360 The National Golf Federation reported last year that one of 0:59:20.440 --> 0:59:23.040 the most notable aspects of the pandemic driven rise in 0:59:23.120 --> 0:59:26.760 participation over the previous three years was the influx of 0:59:26.800 --> 0:59:29.360 women and girls. It noted that there are about six 0:59:29.400 --> 0:59:32.800 point four million female golfers. That's up from five point 0:59:32.840 --> 0:59:35.880 six million in twenty nineteen, with the female golfer pool 0:59:35.960 --> 0:59:39.360 jumping fifteen percent compared to a two percent lift among 0:59:39.400 --> 0:59:40.120 male golfers. 0:59:40.240 --> 0:59:42.439 All right, so that brings us to the Women's US Open, 0:59:42.480 --> 0:59:45.240 which wrapped up last Sunday at the Lancaster Country Club 0:59:45.240 --> 0:59:48.320 in Pennsylvania. We talked with Jill Spiegel, president of the 0:59:48.360 --> 0:59:51.040 PGA Tour Superstore, ahead of the final round. 0:59:51.160 --> 0:59:54.240 Really fun to watch twenty six percent of all golfers 0:59:54.560 --> 0:59:57.200 or women, and sixty percent a lot of new people 0:59:57.200 --> 1:00:00.000 came into the game, and sixty percent of new golf 1:00:00.240 --> 1:00:02.160 that came into the game over the last few years 1:00:02.160 --> 1:00:05.479 have been women. So we we anticipate that twenty six 1:00:05.560 --> 1:00:08.680 percent climbing over thirty here in the new future. And 1:00:09.080 --> 1:00:12.840 what's really exciting as well is, you know, over forty 1:00:12.880 --> 1:00:16.800 percent of eighteen and under golfers or girls, which is great. 1:00:16.840 --> 1:00:19.400 So that trend is going to continue, and it's really 1:00:19.440 --> 1:00:21.600 exciting to see not only in women's golf, but in 1:00:21.640 --> 1:00:24.040 women's sports in general. You know, if you look back 1:00:24.200 --> 1:00:27.000 just a couple of months ago with the craziness around 1:00:27.040 --> 1:00:30.760 Caitlin Clark and how that's translated into the w MBA, 1:00:30.960 --> 1:00:34.560 it's it's really exciting. And you know, viewership is much 1:00:34.640 --> 1:00:37.720 much higher on the LPGA and twelve. You know, the 1:00:38.080 --> 1:00:41.320 media consumption is twelve million viewers a week versus just 1:00:41.760 --> 1:00:43.680 what was just four million a few years ago, So 1:00:44.080 --> 1:00:47.160 it's really fun to watch. We are very supportive of 1:00:47.200 --> 1:00:50.080 the female customer in our stores. In several of our 1:00:50.120 --> 1:00:53.920 locations we lead with women's apparel, and our resort locations 1:00:53.920 --> 1:00:56.400 we actually saw more women's apparel and men's apparel. So 1:00:56.800 --> 1:00:59.960 it's always been an important business for us, but we're 1:01:00.080 --> 1:01:03.200 continuing to really focus on it and continue to grow it. 1:01:03.280 --> 1:01:05.920 And you know, if it's twenty six percent of the business, 1:01:05.920 --> 1:01:08.760 we want it to be thirty five forty percent of ownership. 1:01:08.840 --> 1:01:10.240 I wanted to take a step back. Why do you 1:01:10.280 --> 1:01:14.040 think more women, more girls in particular, are engaged. What 1:01:14.160 --> 1:01:17.200 is it particularly, is there a player? Is it like, 1:01:17.280 --> 1:01:18.040 what's going on? 1:01:18.440 --> 1:01:20.560 Well, you do have that, I mean you have you know, 1:01:20.720 --> 1:01:23.200 you have Nelly Corda, which has been amazing to watch. 1:01:23.280 --> 1:01:25.760 You know, she's won six of our last seven tournaments. 1:01:25.960 --> 1:01:28.520 And I think, you know, I think COVID was really 1:01:28.600 --> 1:01:31.280 good to the golf industry in general, and I think 1:01:31.320 --> 1:01:34.720 it attracted more women at the time. You know, people people, 1:01:34.760 --> 1:01:37.600 you know, adults who were working from home, had more flexibility. 1:01:37.640 --> 1:01:40.120 And we're getting out on the course and you're seeing 1:01:40.120 --> 1:01:42.400 the demographs changing a lot, which is nice. You know, 1:01:42.440 --> 1:01:45.080 it used to be middle aged white men, and you're 1:01:45.200 --> 1:01:46.960 you're seeing not only are you seeing more women, but 1:01:47.000 --> 1:01:50.000 you're seeing more people of color and a lot more youth. 1:01:50.680 --> 1:01:54.760 So it feels more accessible, more fun. It's you know, 1:01:54.800 --> 1:01:57.680 I think golf can be very intimidating if you're new 1:01:57.720 --> 1:01:59.960 to it, and I think some of those barriers are 1:02:00.040 --> 1:02:03.000 getting broken down, and I think it's a little more 1:02:03.040 --> 1:02:04.080 casual than it was. 1:02:05.160 --> 1:02:09.200 I'm wondering about how much that growth from the COVID 1:02:09.240 --> 1:02:11.920 era has continued. I think of I'm a cyclist, and 1:02:11.960 --> 1:02:15.320 I think the cycling industry got a huge boon during COVID, 1:02:15.480 --> 1:02:18.800 but it is just getting crushed right now. Some sports 1:02:18.800 --> 1:02:20.840 are not seeing that bump continue. What can you tell 1:02:20.880 --> 1:02:21.560 us about golf? 1:02:22.240 --> 1:02:24.120 Well, it's a really good question, and you know, we 1:02:24.320 --> 1:02:26.600 you quote us some stats from the NGNGF and we 1:02:26.640 --> 1:02:30.200 look at it closely too. And twenty twenty three, you know, 1:02:30.240 --> 1:02:32.960 twenty twenty and twenty twenty one were record years, and 1:02:33.040 --> 1:02:35.640 the last four years rounds of golf have been at 1:02:35.680 --> 1:02:37.760 an all time high, with twenty three at a peak. 1:02:37.800 --> 1:02:40.440 Over it, five hundred and thirty million people. Rounds of 1:02:40.480 --> 1:02:45.120 golf were played and participation was almost twenty seven million, 1:02:45.320 --> 1:02:48.240 and twenty twenty four rounds of golf are up over 1:02:48.280 --> 1:02:51.400 twenty twenty three. So we were all holding our breath. 1:02:51.440 --> 1:02:54.840 You know, our business doubled during COVID, which is tremendous, 1:02:54.880 --> 1:02:57.320 and we were thinking, you know, when is the air 1:02:57.360 --> 1:02:59.040 going to come out of this balloon? And it really 1:02:59.120 --> 1:03:03.160 hasn't happened. Industry has never been healthier. And what's exciting 1:03:03.200 --> 1:03:06.640 to see too is not only are people playing golf 1:03:06.680 --> 1:03:09.640 on the golf course, more people are actually playing off 1:03:09.680 --> 1:03:11.560 course golf. And when I talk about off course, what 1:03:11.600 --> 1:03:13.880 I mean is simulate our golf. They're either going into 1:03:13.920 --> 1:03:16.800 a five iron or a top golf and ten percent 1:03:16.800 --> 1:03:19.960 of those people are converting to green grass golf. So 1:03:20.520 --> 1:03:23.080 it's the growth continues in your right. There's a lot 1:03:23.080 --> 1:03:26.280 of sports that saw a huge fightering COVID and they're 1:03:26.320 --> 1:03:30.720 regressing down. In golf, recreational golf has never never been happier, 1:03:30.760 --> 1:03:34.000 you know, healthier. One in nine people are playing golf, 1:03:34.120 --> 1:03:37.000 and the beauty of it is all ages can play, 1:03:37.080 --> 1:03:39.880 all abilities can play, and you can play together regardless 1:03:39.880 --> 1:03:42.080 of your skill level. Now it's you know, people are 1:03:42.080 --> 1:03:45.280 sparking an interest and we're seeing in our business. You know, 1:03:45.320 --> 1:03:48.920 the technology business is really really healthy, and the simulator 1:03:48.960 --> 1:03:52.120 business is healthy. And you know there's a launch of 1:03:52.200 --> 1:03:56.640 an interactive league this starting this January with professional golfers 1:03:56.680 --> 1:04:00.200 called TGL, and it's you're going to see that the 1:04:00.480 --> 1:04:02.640 you know, twenty four of the top players on tour 1:04:02.920 --> 1:04:05.520 playing simulator golf down in Florida on Monday nights. 1:04:05.560 --> 1:04:06.160 That's really cool. 1:04:06.240 --> 1:04:09.000 There's a former surgeence of different ways you can take 1:04:09.000 --> 1:04:11.560 in the sport and simulator golf doesn't take four hours, 1:04:11.600 --> 1:04:13.439 and you know, you can play it in a couple 1:04:13.560 --> 1:04:16.200 hours or an hour. Even so, it's opening it up 1:04:16.280 --> 1:04:19.440 for and making it more welcoming, you know, without the 1:04:19.480 --> 1:04:20.600 time commitment. 1:04:20.720 --> 1:04:24.320 That was Jill Spiegel, president of the PGA Tourist Superstore. 1:04:23.840 --> 1:04:26.280 Still ahead on Bloomberg Business Week. The hotel ya that 1:04:26.360 --> 1:04:29.600 says it's time to stop putting guest needs first. And 1:04:29.640 --> 1:04:32.840 on the flip side, the hotels that are finally prioritizing 1:04:32.880 --> 1:04:34.640 one significant group of travelers. 1:04:35.000 --> 1:04:37.880 It's coming up in pursuits. This is Bloomberg. 1:04:38.640 --> 1:04:42.200 You're listening to the Bloomberg Business Week podcast. Catch us 1:04:42.240 --> 1:04:45.480 live weekday afternoons from two to five pm Eastern. Listen 1:04:45.520 --> 1:04:47.680 on Apple car Play and and brout Auto with a 1:04:47.680 --> 1:04:51.360 Bloomberg Business apt or watch us live on YouTube. 1:04:51.800 --> 1:04:54.439 The hotel with no front desk, no keys, no set 1:04:54.520 --> 1:04:56.880 check in and if you get hungry, well the local 1:04:56.960 --> 1:04:59.720 villagers will cook for you. Sorry, guests, your needs are 1:04:59.800 --> 1:05:03.240 not really top priority. Contrast that Tim props with hotels 1:05:03.320 --> 1:05:06.400 definitely and finally putting one group of travelers first. 1:05:06.640 --> 1:05:08.760 And once you get to a hotel in New York City, 1:05:08.880 --> 1:05:11.720 how about the best shows to see? You know, it's 1:05:11.760 --> 1:05:15.320 time for Bloomberg Pursuits with us. The editor of Bloomberg 1:05:15.360 --> 1:05:19.959 pursuits Chris Rouser and at Bloomberg News, travel reporter Lily Germa. Chris, 1:05:20.120 --> 1:05:22.600 I want to start with this great story that Lily 1:05:22.640 --> 1:05:27.480 wrote about hotels finally catering to neurodivergent travelers. First, I 1:05:27.560 --> 1:05:32.400 think the term neurodivergence is not on everyone's radar, So 1:05:32.480 --> 1:05:33.400 talk a little bit about that. 1:05:33.960 --> 1:05:36.520 Yeah, I think, I mean that's that's a great point actually, 1:05:36.560 --> 1:05:38.120 and I think if you know, sometimes you can put 1:05:38.200 --> 1:05:39.880 us something like that in a headline, people say, oh, 1:05:39.920 --> 1:05:41.400 I don't know what that means, So that you know 1:05:41.440 --> 1:05:44.640 that that means it's a whole spectrum of things, you know, 1:05:44.800 --> 1:05:50.400 from people experience autism to other disorders, and it means 1:05:50.440 --> 1:05:54.120 that going through the world can be quite different. And 1:05:54.800 --> 1:05:59.320 in Lily's story, we talk about how seventy eight percent 1:05:59.400 --> 1:06:05.600 of individual or families who experienced neurodiversity don't travel. They 1:06:05.640 --> 1:06:10.640 just don't bother. This is specifically aesism actually, and that 1:06:10.720 --> 1:06:15.000 means because loud noises can be a problem, textures can 1:06:15.040 --> 1:06:16.840 be a problem, lots of people can be a problem, 1:06:16.840 --> 1:06:19.160 and it can be such a headache that you know, 1:06:19.200 --> 1:06:21.120 families just stay home because it feels safer and it 1:06:21.120 --> 1:06:25.320 feels easier, and finally, some hotels are figuring out how 1:06:25.320 --> 1:06:27.800 to make travel easier so that families who want to 1:06:27.840 --> 1:06:29.720 try it and want to see the world can actually 1:06:29.720 --> 1:06:30.000 do it. 1:06:30.080 --> 1:06:32.840 I love it because for kids it's so important, whoever 1:06:32.880 --> 1:06:36.160 they are, whatever their background, whatever you know they are 1:06:36.160 --> 1:06:39.280 dealing with, it's really good to experience life in some way. So, Lily, 1:06:39.320 --> 1:06:41.200 I'm curious how this story came up on your radar, 1:06:41.200 --> 1:06:42.800 and then talk to us a little bit about what 1:06:42.840 --> 1:06:43.720 hotels are doing. 1:06:44.640 --> 1:06:49.520 Sure, so, I noticed that hotels were increasingly getting their 1:06:49.560 --> 1:06:53.840 staff certified to you know, understand how to handle and 1:06:53.920 --> 1:06:56.640 how to serve nearro divergent families. And there were a 1:06:56.640 --> 1:07:01.800 couple of surveys that came out in April from Hyatt Hotels, 1:07:01.880 --> 1:07:04.240 and I thought, well, this is interesting. It seemed like 1:07:04.320 --> 1:07:09.280 to be a bigger push. And that's pretty much what's 1:07:09.320 --> 1:07:12.920 been happening with some of the larger hotel brands, including 1:07:13.000 --> 1:07:16.920 Virgin Hotels, Hyatt Hotels, some of the resort brands in 1:07:16.960 --> 1:07:21.240 the Caribbean, such as Charisma Hotels, and they are going 1:07:21.320 --> 1:07:25.400 to a couple of different certification bodies to train their 1:07:25.440 --> 1:07:29.520 staff and know how to handle, you know, any situations 1:07:29.520 --> 1:07:32.280 that come up at the hotel or understand what the 1:07:32.360 --> 1:07:35.720 need might be for NewYork virgen families. So I thought, well, 1:07:35.720 --> 1:07:38.880 this is interesting. It seems to be gaining traction, and 1:07:39.680 --> 1:07:43.120 I learned quite a bit as the research unfolded. 1:07:43.880 --> 1:07:48.440 Yeah, so, Lily, I'm really interested in not just the hotels, 1:07:48.520 --> 1:07:51.640 but the travel agencies that have sprung up around this. 1:07:51.680 --> 1:07:53.680 Tell us about Magical Storybook Travels. 1:07:54.040 --> 1:07:58.800 Yeah, so, Magical Storybook Travels is led by this lady 1:07:58.800 --> 1:08:03.400 who early on discovered that her son had ad adhd 1:08:03.720 --> 1:08:06.640 and didn't really know, you know, how she would continue 1:08:06.680 --> 1:08:09.560 to travel. And when she asked her peers, they were 1:08:09.600 --> 1:08:12.120 all like, well, we just don't go anywhere. And she 1:08:12.120 --> 1:08:14.400 didn't want that to be her story for her family, 1:08:14.480 --> 1:08:17.639 and so she set up this agency and she trains 1:08:18.120 --> 1:08:21.400 basically families to be ready to handle their first vacation. 1:08:22.479 --> 1:08:26.120 And that includes several meetings you know what she calls 1:08:26.400 --> 1:08:30.160 you know, pre travel counseling, where they sit together and 1:08:30.360 --> 1:08:33.080 she goes over what works for them day to day 1:08:33.320 --> 1:08:36.400 in their you know, regular routine, what doesn't work, what's 1:08:36.439 --> 1:08:40.040 a trigger And once they go all over all of 1:08:40.080 --> 1:08:42.519 that and she starts getting ideas together for them of 1:08:42.640 --> 1:08:47.920 where they could go, and she usually recommends certified hotels 1:08:48.120 --> 1:08:51.679 or destinations that she thinks they could handle. But sometimes 1:08:51.720 --> 1:08:55.560 they want to go to Disney World, so that definitely requires, 1:08:55.680 --> 1:08:59.240 you know, ideas on how they could handle a whole 1:08:59.280 --> 1:09:02.240 vacation there. And what she does is she tells them 1:09:02.280 --> 1:09:05.160 to go and spend the night at Grandma's for example, 1:09:06.520 --> 1:09:09.280 you know, get used to doing something different away from home. 1:09:10.280 --> 1:09:12.000 I think it really is a long process. 1:09:12.040 --> 1:09:15.920 Yeah, and she knows, you know, for the hotels that 1:09:16.000 --> 1:09:18.920 she recommends, right Lily, is she that she can provide 1:09:19.000 --> 1:09:22.679 video tours or show them video tours. She knows four plans. 1:09:23.040 --> 1:09:25.519 You know, she knows about sensory triggers that she can 1:09:26.200 --> 1:09:29.599 tell people about and she you know that really helps. 1:09:30.000 --> 1:09:32.040 All that prep really is means everything. 1:09:33.360 --> 1:09:35.880 Yes, absolutely, she did mention that was a big part 1:09:35.880 --> 1:09:38.920 of her work was the video tours for the kid 1:09:39.000 --> 1:09:43.240 to be able to visualize himself or herself in its place, 1:09:43.640 --> 1:09:46.479 you know, so that's a part of her job as well. 1:09:47.280 --> 1:09:49.000 You know what's interesting too, I was thinking, like what 1:09:49.120 --> 1:09:52.040 about things like a Disneyland or a Universal park where 1:09:52.120 --> 1:09:54.719 I think you know, any of us who've got kids 1:09:54.720 --> 1:09:56.519 like one of the best things is taking her kids 1:09:56.520 --> 1:09:59.280 to like experience at Lego Land. You know, I know 1:09:59.439 --> 1:10:01.760 Tim went are with this on like I just think 1:10:01.800 --> 1:10:05.800 how magical that is. Are they those types of institutions, 1:10:05.800 --> 1:10:10.320 those companies, those types of experiences. Are they warming up 1:10:10.320 --> 1:10:12.639 to this and providing opportunities for kids? 1:10:12.760 --> 1:10:17.559 So what I understand Legoland is one of them. Disney World, 1:10:17.560 --> 1:10:20.720 that's from what I from what the travel agent told me. 1:10:21.040 --> 1:10:24.760 Their hotels are not doing so well in this in 1:10:24.760 --> 1:10:29.560 this area, but the actual parks are. So that's an interesting, 1:10:30.520 --> 1:10:34.200 you know, a differentiating factor. But yes, some of them 1:10:34.200 --> 1:10:36.960 are warming up to it. I will say that, you know, 1:10:37.439 --> 1:10:40.120 I could say about two hundred of them have been 1:10:40.160 --> 1:10:42.919 certified with IBCCS, which is one of the main bodies. 1:10:44.000 --> 1:10:47.080 Maybe one hundred more with another one. But it's generally 1:10:47.120 --> 1:10:49.720 it's you know, it's it's not enough, and I think 1:10:49.720 --> 1:10:51.400 that it should really speed up. 1:10:51.720 --> 1:10:53.439 I think what's interesting too is when you write about 1:10:53.439 --> 1:10:56.439 it in the story about employees really becoming sensitive to 1:10:56.479 --> 1:11:00.080 families and their needs so that they can help parents 1:11:01.240 --> 1:11:03.559 when their kids need assistance, you know, whether there's a 1:11:03.560 --> 1:11:06.800 meltdown or something, and helping with other people you know 1:11:06.840 --> 1:11:08.880 in the general public who always think they know better 1:11:09.400 --> 1:11:10.840 and they really don't necessarily. 1:11:12.280 --> 1:11:14.599 Yeah, that was really eye opening for me as well, 1:11:14.640 --> 1:11:16.840 because a lot of times you might see, you know, 1:11:17.360 --> 1:11:21.160 a kid having what we call it tantrum, but really 1:11:21.200 --> 1:11:27.880 it's not behaviorally right cause it's a neurosensitive condition, all right, So. 1:11:27.840 --> 1:11:29.720 We want to go from finally meeting the needs of 1:11:29.720 --> 1:11:33.519 an underserved group to another approach and hospitality about stopping 1:11:33.560 --> 1:11:36.200 putting guests needs first. I love this story. It's kind 1:11:36.200 --> 1:11:37.360 of a place I want to go, although I don't 1:11:37.360 --> 1:11:40.599 think I can afford it. Chris tell us though about 1:11:40.600 --> 1:11:43.639 this story, and I don't know the pitch or how 1:11:43.680 --> 1:11:43.880 it can. 1:11:44.080 --> 1:11:44.280 Yeah. 1:11:44.400 --> 1:11:46.599 So, first of all, you know, Lily, as you may 1:11:46.640 --> 1:11:49.960 have noticed, is an expert on sensitive travel, and she 1:11:50.120 --> 1:11:52.439 has a column that we've recently started with Pursuits called 1:11:52.439 --> 1:11:56.000 the Better Travel Bureau, where we talk about the business 1:11:56.000 --> 1:11:59.120 of making tourism more equitable, more inclusive, and less harmful 1:11:59.160 --> 1:12:01.960 to the environment. And we talk about the people, you know, 1:12:02.000 --> 1:12:05.240 sort of transforming the industry and figuring out ways to 1:12:05.240 --> 1:12:10.160 make travel not only less harmful, but actually a positive 1:12:10.160 --> 1:12:13.200 influence on the world. Yeah, because we really believe in 1:12:13.240 --> 1:12:15.760 travel you know, sometimes sometimes people are like, oh, if 1:12:15.800 --> 1:12:18.240 you really care about climate change, don't travel at all, 1:12:18.240 --> 1:12:20.080 And we just don't see the world that way. And 1:12:20.280 --> 1:12:23.240 travel can be everything from taking the train to something 1:12:23.880 --> 1:12:26.360 that's in your city's backyard to going around the world 1:12:26.439 --> 1:12:28.600 and doing some eco tourism and learning about communities that 1:12:28.640 --> 1:12:29.360 you never would. 1:12:29.120 --> 1:12:29.759 Have known about. 1:12:29.920 --> 1:12:33.519 And so Lily has found a very interesting hospitality project 1:12:35.040 --> 1:12:39.360 that really involves a community and it's actually much more 1:12:39.400 --> 1:12:42.200 about the community than it really sort of is about 1:12:42.200 --> 1:12:44.960 you travelers. So, Lily, why don't you want to tell. 1:12:44.920 --> 1:12:45.360 Us about it? 1:12:45.720 --> 1:12:48.960 Sure? So I have to credit our incredible travel star 1:12:49.120 --> 1:12:52.880 Nikia Texting, who's actually tipped me off on this. On 1:12:53.040 --> 1:12:56.920 Tierry Tetier, who's really avant garde hotelier and started this 1:12:57.640 --> 1:13:01.120 new concept, you know that's called seven hundred thousand hours 1:13:01.120 --> 1:13:04.200 Impact and he's been in the industry for a really 1:13:04.240 --> 1:13:07.559 long time, but he says that it took him just 1:13:07.640 --> 1:13:11.120 about as much time to realize that hospitality really should 1:13:11.160 --> 1:13:15.360 be about elevating and empowering communities and not so much 1:13:15.400 --> 1:13:20.599 about catering to guest whims. So that's really interesting because 1:13:20.600 --> 1:13:23.120 he's on a very you know, he's on a luxury bracket. 1:13:23.439 --> 1:13:26.679 He does his hotels in a very unusual way where 1:13:26.680 --> 1:13:30.000 you don't have a typical restaurant or you know, check 1:13:30.080 --> 1:13:32.160 in out or you're basically free the vacation the way 1:13:32.200 --> 1:13:35.720 you'd like. And he has these pop up surprise dinners 1:13:35.800 --> 1:13:39.000 and lunches and different locations on the property. But now 1:13:39.040 --> 1:13:42.360 he's you know, he did this every six months and 1:13:42.400 --> 1:13:45.479 a different location, and he had a very huge following 1:13:45.560 --> 1:13:48.200 you know, that would go wherever he was. But he 1:13:48.280 --> 1:13:50.640 realized that the six months pop ups were harmful to 1:13:50.880 --> 1:13:53.840 communities because they've become dependent on the revenue, and then 1:13:53.880 --> 1:13:56.200 he would just disappear again for another six months. So 1:13:57.040 --> 1:14:00.680 he decided to you know, change the model. Partnered up 1:14:00.720 --> 1:14:04.519 with an expert international development who's worked on you know, 1:14:04.560 --> 1:14:07.960 different projects in the global South for many years at 1:14:07.960 --> 1:14:11.960 the World Bank and other institutions, and together they've come 1:14:12.040 --> 1:14:15.760 up with this really unique model where it's still a 1:14:15.920 --> 1:14:19.559 small you know, what they call micro hospitality. So they 1:14:19.600 --> 1:14:22.360 only have a certain number of guests per year, per season, 1:14:22.479 --> 1:14:26.439 about fifty and it's about thousand, two thousand dollars a night. 1:14:26.520 --> 1:14:27.080 But before you. 1:14:27.040 --> 1:14:30.320 Can even book, you have to donate, so it's like 1:14:30.360 --> 1:14:32.000 a membership fee, and. 1:14:33.880 --> 1:14:36.120 If you don't right, there might not be a room available. 1:14:36.160 --> 1:14:39.519 Basically, yeah, if you get five hundred euros, you might 1:14:39.560 --> 1:14:42.360 not it just might not be able to go. But 1:14:42.479 --> 1:14:46.080 once you donate, then you book and while you're there 1:14:46.160 --> 1:14:49.240 you get to experience, you know, a whole range of 1:14:50.280 --> 1:14:55.000 locally owned cooperative for cooperatives that are providing the activities 1:14:55.040 --> 1:14:58.960 but also building businesses. So you automatically know that your 1:14:59.080 --> 1:15:02.280 funds are going towards setting up these cooperatives and the 1:15:02.360 --> 1:15:05.599 idea is for these communities to become independent long term. 1:15:05.840 --> 1:15:08.000 I have to say, this looks fascinating. I love the trend. 1:15:08.240 --> 1:15:09.680 We didn't get to it, but I'm just going to 1:15:09.720 --> 1:15:12.479 give Chris thirty seconds. Best show in New York City. 1:15:12.479 --> 1:15:13.280 There's a lot going on. 1:15:13.520 --> 1:15:15.920 Yeah, So there are tons of shows opened this spring, 1:15:16.080 --> 1:15:19.160 like a dozens literally in New York dance shows, Broadway, 1:15:19.200 --> 1:15:22.000 blah blah blah. And so we did a recommendation list 1:15:22.000 --> 1:15:24.800 of what to see this summer and my my top 1:15:24.800 --> 1:15:28.960 two picks are Oh Mary, which is a hilarious sketch 1:15:29.200 --> 1:15:31.719 from the comedian Cola Scola was Downtown has a brief 1:15:31.760 --> 1:15:34.519 Broadway transfer you'll laugh until you Mary Todd Lincoln, right, 1:15:34.680 --> 1:15:38.400 Mary Todd Lincoln as an alcoholic cabaret star. Nothing like it. 1:15:38.400 --> 1:15:43.160 It's completely idiotic and totally brilliant. And then there's Cats 1:15:43.160 --> 1:15:46.640 at the new Pearlman Performing Arts Center, Yeah, which you know, 1:15:47.200 --> 1:15:50.000 Mayor Weber was a big sponsor of Yeah, Cats, and 1:15:50.080 --> 1:15:51.120 it's but this is not. 1:15:51.439 --> 1:15:52.400 Do you have Nine Lives? 1:15:52.400 --> 1:15:52.600 You know? 1:15:53.840 --> 1:15:57.400 Sorry, it's not cats with ears and tails. It's reinterpreted. 1:15:57.439 --> 1:16:01.160 The cats are actually in ball room culture. So like 1:16:01.320 --> 1:16:05.720 voguing down the runway. I think the show pose and 1:16:06.000 --> 1:16:09.320 it's weird. A story on the costumes. All the costumes 1:16:09.320 --> 1:16:11.280 are tear away. It's a really it's going to be 1:16:11.360 --> 1:16:13.640 wild and crazy and everyone's. 1:16:13.240 --> 1:16:14.000 Going to be talking about it. 1:16:14.080 --> 1:16:15.880 The Outsider is also on the list, which I've heard 1:16:16.000 --> 1:16:17.880 is just fantastic. Yes say yes, good one. 1:16:17.920 --> 1:16:20.479 It's very original and people really like it. 1:16:20.600 --> 1:16:21.960 Cat sounds perfect. 1:16:22.960 --> 1:16:24.760 I guess we got to go. Hey, j Big thank 1:16:24.800 --> 1:16:28.000 you to Bloomberg News travel reporter Billy Germa, also the 1:16:28.040 --> 1:16:31.000 writer of the Better Travel Bureau column in newsletters, so 1:16:31.040 --> 1:16:33.320 do check that out on the Bloomberg terminal and at 1:16:33.360 --> 1:16:37.080 Bloomberg dot com, and also the editor of Bloomberg Pursuits 1:16:37.360 --> 1:16:38.400 Chris Rouser. 1:16:38.080 --> 1:16:41.599 The Amazing Chris Rouser. All right, everybody, that wraps up 1:16:41.680 --> 1:16:44.000 the weekend edition of Bloomberg Business Week from Bloomberg Radio. 1:16:44.000 --> 1:16:45.120 Thank you so much for joining us. 1:16:45.200 --> 1:16:47.599 Be sure to tune into Bloomberg Business Week Monday through Friday, 1:16:47.640 --> 1:16:49.840 starting at two pm Wall Street Time, on Bloomberg TV, 1:16:50.000 --> 1:16:53.160 Bloomberg Radio, and on Serious XM Channel one twenty one. 1:16:53.479 --> 1:16:55.799 You can also listen to us on Applecarplay and Android 1:16:55.840 --> 1:16:58.599 Auto Free in the Apple app Store or on Google Play. 1:16:58.640 --> 1:17:00.600 You can also watch our daily broadcast on YouTube. Just 1:17:00.640 --> 1:17:03.639 search Bloomberg Global News for Simulcast two on Bloomberg Originals. 1:17:03.720 --> 1:17:06.200 Get our podcast at Bloomberg dot com, Apple, or wherever 1:17:06.240 --> 1:17:08.160 you get your podcasts. In the latest edition of the 1:17:08.200 --> 1:17:11.000 magazine always available on newstands at Bloomberg dot com and 1:17:11.160 --> 1:17:12.160 on the Bloomberg Terminal. 1:17:12.160 --> 1:17:14.320 I'm Tim Stenovieck and I'm Carol Masser. Have a good 1:17:14.320 --> 1:17:15.120 and safe weekend.