WEBVTT - Could 2023 be worse than 2022? Absolutely 0:00:01.880 --> 0:00:04.480 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.519 --> 0:00:07.360 Bloomberg Quick Takes Tim Stanovik. We're here every day bringing 0:00:07.360 --> 0:00:09.879 you the latest news from the world's of business and finance, 0:00:09.920 --> 0:00:13.680 plus technology, politics, economics, all harnessing the power of Business 0:00:13.720 --> 0:00:17.200 Week reporters and editors, not to mention our journalists and 0:00:17.200 --> 0:00:19.680 analyst in more than one and twenty countries. You can 0:00:19.720 --> 0:00:23.279 download Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot Com. 0:00:23.480 --> 0:00:25.200 You can also listen to our radio show at two 0:00:25.239 --> 0:00:27.920 pm Eastern Time on Bloomberg Radio, or watch us on 0:00:27.960 --> 0:00:31.880 YouTube search Bloomberg Global News. Well, the new issue of 0:00:31.920 --> 0:00:35.239 Bloomberg Business Week is out now. The cover story Shocks 0:00:35.280 --> 0:00:37.879 to the System. Yes, the global economy is in a 0:00:37.960 --> 0:00:41.120 fragile state, but here's a practical way to think about 0:00:41.159 --> 0:00:44.440 the risks. It's all about the new economy as well. 0:00:44.560 --> 0:00:46.760 We got with us this afternoon Christina Lynn Blatch. She's 0:00:46.760 --> 0:00:49.680 Global Economics editor for Bloomberg Business Week. She's with us 0:00:49.720 --> 0:00:53.560 right now in the Bloomberg Interactive Broker's studio. Christina, before 0:00:53.600 --> 0:00:55.920 we get into specific stories, just give us an overview 0:00:55.920 --> 0:00:58.640 of the New Economy issue and you know, of course 0:00:58.720 --> 0:01:01.720 is associated with Bloomberg's New Economy Forum. Um. But what 0:01:01.840 --> 0:01:04.800 was the goal here in putting this together? Well, one 0:01:04.840 --> 0:01:06.840 of the things when we started, we were looking at 0:01:06.880 --> 0:01:09.200 sort of where we were last year when we were 0:01:09.240 --> 0:01:13.320 putting this together, and we were feeling quite hopeful two 0:01:13.400 --> 0:01:17.160 years after COVID that the scars were starting to heal. 0:01:18.520 --> 0:01:22.679 Was not great, a lot better has been kind of brutal, 0:01:22.800 --> 0:01:24.720 and then well, you know, we were in the grips 0:01:24.760 --> 0:01:27.600 of a crazy virus and then all these other things 0:01:27.600 --> 0:01:32.759 started happening. More crazy people. They're back on the horizon 0:01:32.840 --> 0:01:35.760 now on the stage rather um. Yeah. So I think 0:01:35.959 --> 0:01:37.679 part of the story, one of the stories that we 0:01:37.720 --> 0:01:41.119 did is is that now geopolitics are back as as 0:01:41.120 --> 0:01:43.720 a risk you know, which we hadn't. You know, we 0:01:44.160 --> 0:01:47.600 had biological risk for like a year or two write 0:01:48.040 --> 0:01:50.120 um and that, you know, and it's not like the 0:01:50.160 --> 0:01:53.720 pandemic has gone away. So it's basically risk on top 0:01:53.720 --> 0:01:57.200 of risk on top of risk, um and um. And 0:01:57.200 --> 0:02:00.680 then we thought, wow, the world feels so fragile right now. 0:02:01.520 --> 0:02:06.120 It does feel fragile, doesn't it talk about recession and well, 0:02:06.120 --> 0:02:09.720 to your point that we've had biological risks. It feels 0:02:09.720 --> 0:02:12.440 like the pandemic has been so all consuming over the 0:02:12.480 --> 0:02:14.800 past two and a half years. But I like the 0:02:14.800 --> 0:02:17.800 framing of this story because you bring up Brexit, the 0:02:17.880 --> 0:02:20.000 U S. China trade war. Haven't thought about that in 0:02:20.000 --> 0:02:23.760 a while, Russia's invasion of Ukraine. To your point that 0:02:23.840 --> 0:02:27.760 the world is very fragile right now, I mean, what's 0:02:27.800 --> 0:02:32.480 what's next helped me. Well, it's actually hard to feel 0:02:32.880 --> 0:02:36.079 very hopeful right now. By three, I mean, I think 0:02:36.120 --> 0:02:38.440 the best that we can hope for is is that 0:02:38.560 --> 0:02:42.840 you know, there's resilience, uh, that countries will get through 0:02:43.000 --> 0:02:47.040 what undoubtedly Europe will soon be in recession. Russia already 0:02:47.120 --> 0:02:51.520 is um. In the US, of course, Bloomberg Economics expects 0:02:51.560 --> 0:02:57.120 ite um. But I think that in a way, some 0:02:57.160 --> 0:02:59.480 of the things we thought were going great, like in 0:02:59.520 --> 0:03:02.000 the last chair, which was the resilience of the labor 0:03:02.080 --> 0:03:04.680 market in the US, has turned to have a huge 0:03:04.720 --> 0:03:08.560 downside right in terms of fighting inflation. So it's like 0:03:08.639 --> 0:03:13.240 you can't even count like you're you know, the your 0:03:13.080 --> 0:03:15.520 you give thanks for some of these things before you 0:03:15.600 --> 0:03:18.640 realize that, oh no, you know, some of these things 0:03:18.639 --> 0:03:22.679 are actually weaknesses. Well, we learned about how intertwined the 0:03:22.720 --> 0:03:25.560 world is when it comes to supply chains, specifically when 0:03:25.560 --> 0:03:28.480 it comes to China. I think two has been about 0:03:28.520 --> 0:03:31.240 our reliance on oil in a different way with Russia's 0:03:31.240 --> 0:03:33.360 invasion of Ukraine. When we think about the country is that. 0:03:33.760 --> 0:03:36.720 I don't want to say calling the shots in two, 0:03:36.800 --> 0:03:40.160 but to look forward to three, what are the countries 0:03:40.200 --> 0:03:45.160 we need to watch? Um? I think US and China 0:03:45.200 --> 0:03:48.920 are still big protagonists. Of course, they're pulling apart from 0:03:48.920 --> 0:03:53.080 each other, and that has consequences for many many countries, 0:03:53.360 --> 0:03:56.160 countries that are going to potentially be forced to choose 0:03:56.680 --> 0:03:59.880 on which side you know they're on, maybe not yet, 0:04:00.040 --> 0:04:04.160 but like in subtle ways right, um, Well, Saudi Arabia 0:04:04.240 --> 0:04:07.720 we saw recently the people you count on as friends 0:04:07.880 --> 0:04:10.200 in the US may not always be there for you 0:04:10.280 --> 0:04:13.240 in terms of you know, what's happening in energy markets. 0:04:13.280 --> 0:04:16.000 I mean, if you think about it now, you know 0:04:16.520 --> 0:04:18.760 countries have to look at their own well being. What 0:04:18.839 --> 0:04:21.080 Saudi Arabia is doing in terms of oil, it's like, 0:04:21.120 --> 0:04:24.720 you know, you're talking about a country that has one 0:04:24.880 --> 0:04:28.480 giant pilot of this commodity and which in twenty years 0:04:28.640 --> 0:04:31.719 may not be in demand much anymore, right, So they're 0:04:31.760 --> 0:04:34.920 maximizing their benefits. So in a way, it's like what 0:04:34.920 --> 0:04:38.039 we're gonna be seeing next year again in our with 0:04:38.120 --> 0:04:41.280 a with a background of our recession, is people are 0:04:41.320 --> 0:04:43.760 going to be looking to maximize their own well being 0:04:44.200 --> 0:04:47.400 and countries are right, and so that is going to 0:04:47.440 --> 0:04:52.160 cause further strains. Um And you have new governments in 0:04:52.200 --> 0:04:56.480 some places, you know, in the UK and Brazil, um 0:04:56.600 --> 0:05:01.279 and and the new government in the yeah, um you 0:05:01.279 --> 0:05:03.400 could or you could say though that he probably knows 0:05:03.440 --> 0:05:06.080 more about the inner working So what's happening in that 0:05:06.120 --> 0:05:09.000 country right now? Um And, And they're going to be 0:05:09.080 --> 0:05:11.920 making choices, I mean, domestic politics are going to be 0:05:12.040 --> 0:05:15.920 you know, foremost, although interestingly in the US there's been 0:05:15.960 --> 0:05:19.200 a tradition that lame duck presidents tend to focus very 0:05:19.279 --> 0:05:22.920 much on international agenda. So we'll see what we see. 0:05:23.200 --> 0:05:25.400 You know, if there's if there's something that Biden he's 0:05:25.440 --> 0:05:28.599 already duck president, we don't know you heard it here first, 0:05:28.720 --> 0:05:35.120 we don't know your right space. I want to talk 0:05:35.200 --> 0:05:38.719 more about China though, because the idea that the US 0:05:38.760 --> 0:05:42.760 and China are pulling apart, what falls in the void 0:05:42.800 --> 0:05:46.800 and who you know which countries go along with either side. 0:05:47.320 --> 0:05:50.400 If the U S And China are pulling apart, is 0:05:50.400 --> 0:05:58.920 that inherently inflationary? That's a good question, thank you. Um, 0:05:59.000 --> 0:06:01.680 because you think about bobalization, I mean, the thing you 0:06:01.720 --> 0:06:05.080 always hear is that it's been deflationary. You've gotten lower 0:06:05.240 --> 0:06:11.040 prices as technology and trade just continues to flow. So 0:06:11.480 --> 0:06:14.479 I don't know, is the is the complete opposite of 0:06:14.520 --> 0:06:17.359 that a globalization? Is that that? I don't know, what 0:06:17.440 --> 0:06:19.880 does the logic follow that that's inflationary? Well, I mean, 0:06:20.040 --> 0:06:23.080 one of the reasons we are seeing some manufacturing coming 0:06:23.120 --> 0:06:26.200 back to the US isn't because you know, American policymakers 0:06:26.200 --> 0:06:29.279 have been standing on the shores, you know, calling companies 0:06:29.320 --> 0:06:32.440 to come back. Uh, it's because shipping costs got to 0:06:32.440 --> 0:06:36.120 be so high, you know, and and supply chains headaches, 0:06:36.200 --> 0:06:39.960 you know. So some companies believe they can actually manufacture 0:06:40.040 --> 0:06:43.480 closer to their main market at at a low cost. 0:06:44.000 --> 0:06:47.040 So if that is the case, then it shouldn't necessarily 0:06:47.200 --> 0:06:50.920 be inflationary that these you know, that these countries are 0:06:50.920 --> 0:06:53.800 pulling apart. The thing about this what we're seeing right now, though, 0:06:54.040 --> 0:06:57.640 is there's so many different factors also involved. In those calculations, right, 0:06:58.080 --> 0:07:02.640 because the strength of the dollar. You know, people have said, oh, 0:07:02.680 --> 0:07:06.960 the US is exporting inflation to other countries through that conduit. 0:07:07.040 --> 0:07:09.120 And if you think about, for example, the fact that 0:07:09.120 --> 0:07:12.320 global commodities tend to be prized in dollars, what it 0:07:12.400 --> 0:07:15.120 is like for a country that is a net import 0:07:15.200 --> 0:07:18.000 or of oil uh to be having to you know, 0:07:18.320 --> 0:07:22.200 to to to pay for that commodity now in like 0:07:22.280 --> 0:07:25.440 you know, and and which is much more expensive, then 0:07:25.480 --> 0:07:29.320 you can understand that we've seen all sorts of traditional 0:07:29.400 --> 0:07:33.480 kind of that that that that those calculus is not 0:07:33.640 --> 0:07:36.760 a good word, are constantly shifting, and they've been shifting 0:07:36.800 --> 0:07:40.520 in the last year. UM. I mean from a from 0:07:40.520 --> 0:07:44.440 a business perspective. UM. I think people companies have seen 0:07:44.560 --> 0:07:48.360 the downside of of how heavily they came to rely 0:07:48.640 --> 0:07:53.240 on one country for manufacturing uh. And I think that, 0:07:53.440 --> 0:07:55.920 you know, on the margin, when a company thinks, now, 0:07:56.560 --> 0:07:58.480 maybe not where am I going to move that plant 0:07:58.560 --> 0:08:00.040 out of China, but where am I going to with 0:08:00.200 --> 0:08:02.680 the second or third plant? Uh? And those are good 0:08:02.680 --> 0:08:05.280 conversations to be having. Okay, twenty seconds left. There are 0:08:05.280 --> 0:08:06.480 a lot of stories in here that I want to 0:08:06.520 --> 0:08:08.760 get to we have time for one more birth control 0:08:09.080 --> 0:08:12.600 in developing countries. Um, why do we need to focus 0:08:12.640 --> 0:08:14.800 on sort of an old school method? Twenty seconds? Well, 0:08:14.840 --> 0:08:18.240 I think it's Africa in particular, because there's this thing 0:08:18.280 --> 0:08:21.440 called the demographic transition, and if you mismanage it, you 0:08:21.520 --> 0:08:25.680 get poorer before you know, you miss out on prosperity. 0:08:25.720 --> 0:08:28.960 All right, Christina Lyndblad, Global Economics editor for Bloomberg Business Week, 0:08:29.000 --> 0:08:31.080 with us in the Bloomberg Interactive Broker Studio. Check out 0:08:31.120 --> 0:08:34.000 the current issue of Bloomberg Business Week. It's online, It's 0:08:34.040 --> 0:08:36.480 on newsstands now and of course it's also on the 0:08:36.520 --> 0:08:40.040 Bloomberg terminal. It's the new Economy issue of Bloomberg Business Week. 0:08:40.360 --> 0:08:44.400 This is Bloomberg Business Week with Carol Messer and Bloomberg 0:08:44.480 --> 0:08:48.800 Quick Takes Tim Stinovic on Bloomberg Radio. Very pleased right 0:08:48.840 --> 0:08:51.319 now to be joined by Dr Tom Inglesby, Director for 0:08:51.360 --> 0:08:54.080 the Center for Health Security, the JOHNS Hopkins Bloomberg School 0:08:54.080 --> 0:08:56.400 of Public Health. It is supported by Michael R. Bloomberg, 0:08:56.440 --> 0:09:00.439 the founder of Bloomberg LP and Bloomberg Philanthropies. Doctor Inglesby 0:09:00.520 --> 0:09:02.760 joined us on the phone from Baltimore. Dr good to 0:09:02.800 --> 0:09:05.240 have you back with us. As I mentioned just a 0:09:05.320 --> 0:09:08.440 few moments ago, Katie and I both moderated panels from 0:09:08.440 --> 0:09:11.880 the Bloomberg Growth Summit Bloomberg Live event here, and I 0:09:11.960 --> 0:09:13.640 gotta tell you, it feels like we are back to 0:09:14.160 --> 0:09:19.360 totally normal, pre pandemic uh activities, full full room, a 0:09:19.440 --> 0:09:21.959 couple of masks, but you know, not by the majority 0:09:22.040 --> 0:09:24.040 or anything. And you know there was you were able 0:09:24.040 --> 0:09:26.600 to join virtually, but there are people here in person. 0:09:27.120 --> 0:09:31.640 Uh are we out of this pandemic? Well, Hi, Tim 0:09:31.760 --> 0:09:34.040 and Katie, thanks so much for having me. We are 0:09:34.160 --> 0:09:37.440 not out of the pandemic. Uh that things are obviously 0:09:37.640 --> 0:09:40.880 much better than they were a year ago or even 0:09:41.040 --> 0:09:43.840 six months ago. But if you look at the numbers 0:09:43.960 --> 0:09:47.720 every day, there still are fifty people on average dying 0:09:47.840 --> 0:09:51.079 from COVID every day in the United States. And you 0:09:51.160 --> 0:09:54.800 know that this the majority of people who are getting 0:09:54.920 --> 0:09:59.319 serious CODED infection are unvaccinated or have some kind of 0:09:59.440 --> 0:10:03.119 underlying immune suppression. But there are people who are vaccinated 0:10:03.200 --> 0:10:06.240 and are still getting very serious COVID infections, And so 0:10:06.559 --> 0:10:09.760 it's importable to know. It's it's far far better than 0:10:09.800 --> 0:10:12.920 it was, but it's fairly steady. We are still in 0:10:13.000 --> 0:10:17.080 a pretty steady state of people having a fatal infection 0:10:17.120 --> 0:10:19.040 from COVID every day. If you look at the the 0:10:19.160 --> 0:10:22.719 stats across the country, it's still for adults something like 0:10:22.880 --> 0:10:24.760 the sixth or seventh leading cause of death in the 0:10:24.880 --> 0:10:28.040 United States. So it's nothing to be kind of trifled with. 0:10:28.200 --> 0:10:31.679 It's still a very serious illness. And so I mean, 0:10:31.880 --> 0:10:34.240 is that just going to be sort of the new 0:10:34.559 --> 0:10:37.320 normal going forward? And to your point that they're still 0:10:37.400 --> 0:10:40.439 unvaccinated people in this country at this point, is it 0:10:40.520 --> 0:10:42.720 safe to say if you haven't gotten a vaccine by now, 0:10:42.800 --> 0:10:46.880 you're probably not going to go get the job. Well, 0:10:47.000 --> 0:10:48.520 I hope that's not the case. I think, you know, 0:10:48.600 --> 0:10:51.800 the more that we learn about the vaccine and more 0:10:51.840 --> 0:10:53.839 than information is published about it, the more the doctors 0:10:53.880 --> 0:10:56.559 and nurses who take care of people and communities keep 0:10:56.679 --> 0:10:59.400 talking about the value of vaccine. I am hopeful that 0:10:59.520 --> 0:11:03.000 more people will get vaccinated. You're right, only only about 0:11:03.080 --> 0:11:05.560 two thirds of the country or have gotten the first 0:11:05.600 --> 0:11:08.640 two shots of vaccine, and so the other third of 0:11:08.679 --> 0:11:12.600 the country is walking around pretty vulnerable, were very vulnerable 0:11:12.760 --> 0:11:16.280 to a COVID infection and maybe a very serious one 0:11:16.400 --> 0:11:19.120 or even a fatal one. So hopefully with time, as 0:11:19.160 --> 0:11:22.839 people see that the vaccine has been really well tolerated, 0:11:23.240 --> 0:11:26.480 that major side effects have not occurred, that more people 0:11:26.600 --> 0:11:28.920 will decide to get vaccinated. It is not too late. 0:11:29.040 --> 0:11:31.040 Some people may think I've missed the window. You haven't 0:11:31.080 --> 0:11:33.480 missed the window. You could get vaccinated today. It's free, 0:11:34.120 --> 0:11:36.079 uh in places around the country. And so I really 0:11:36.080 --> 0:11:38.280 would encourage people to do that. Okay, So in the 0:11:38.360 --> 0:11:39.679 last minute and a half that we have with you, 0:11:39.840 --> 0:11:41.959 Dr Englesby, give us, give us some lessons that we've 0:11:42.040 --> 0:11:43.679 learned over the past two and a half years that 0:11:43.679 --> 0:11:46.400 could help us deal with future viral outbreaks. And I 0:11:46.440 --> 0:11:47.880 got to tell you there are the virus I mean, 0:11:48.160 --> 0:11:50.439 you know, my son had RSV last week. We know 0:11:50.800 --> 0:11:53.839 kids in the hospital with RSV. There's ten foot mouth 0:11:53.920 --> 0:11:58.360 going around at daycare, like there are other viruses out there. Oh, 0:11:58.480 --> 0:12:01.400 you're absolutely right. I think we're entering a wintertime where 0:12:01.480 --> 0:12:04.040 we're gonna have continued covid infection. We're gonna have a 0:12:04.240 --> 0:12:07.480 probably pretty serious flu season and a lot of RSB 0:12:07.760 --> 0:12:09.920 like like your son. I think, you know, one of 0:12:09.960 --> 0:12:13.360 the lessons is that we have tools to fight these viruses. 0:12:13.760 --> 0:12:16.079 For many of them, I think rs V. Unfortunately, we 0:12:16.120 --> 0:12:17.839 don't have the same tools we have for flu and 0:12:18.000 --> 0:12:21.920 for COVID, but research and development in America matters a lot. 0:12:22.120 --> 0:12:24.280 We can actually still make a lot of progress against 0:12:24.320 --> 0:12:27.480 these viruses. Wearing a mask makes a big difference. That 0:12:27.559 --> 0:12:29.720 lowers your chance of getting infected. So if you're if 0:12:29.720 --> 0:12:32.160 you're vulnerable to one of these infections, then then that 0:12:32.280 --> 0:12:35.719 kind of intervention or UM that that kind of like 0:12:35.840 --> 0:12:40.360 removing yourself from infection is important. And um getting tested 0:12:40.440 --> 0:12:44.679 also is really useful because it then leads to the 0:12:44.760 --> 0:12:47.840 potential for treatment. So we have now rapid tests available 0:12:47.880 --> 0:12:50.800 around the country for COVID, really easy to get flu 0:12:50.920 --> 0:12:54.439 tests as well, and getting those tests helps make a 0:12:54.640 --> 0:12:57.439 diagnosis and then can lead to rapid treatment and that 0:12:57.520 --> 0:12:59.840 can make a big difference for people. Dr Tom Angles, 0:13:00.240 --> 0:13:02.320 director of the Center Frail Security at the Johns Hopkins 0:13:02.360 --> 0:13:04.439 Bloomberg School of Public Health. Dr Engels, be good to 0:13:04.480 --> 0:13:06.880 have you with us here on a Bloomberg Business Week Radio. 0:13:07.000 --> 0:13:10.520 You're listening to Bloomberg Business Week with Carol Messer and 0:13:10.640 --> 0:13:15.199 Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Well, the 0:13:15.240 --> 0:13:18.480 hotel search platform Tree Vago reported earnings earlier this week. 0:13:18.600 --> 0:13:20.640 Revenue for the third quarter beat, but it was a 0:13:20.720 --> 0:13:22.560 miss when it came to the bottom line. The company 0:13:22.600 --> 0:13:25.720 reported a lost per share of nineteen euro cents versus 0:13:25.760 --> 0:13:29.160 an estimate of actually an earnings of four euro cents. 0:13:29.600 --> 0:13:31.600 We're gonna get more right now with Axel Heafer, he's 0:13:31.600 --> 0:13:33.840 the CEO of Tree Vago. He joins his via zoom 0:13:33.920 --> 0:13:36.800 right now from Dusseldorf, Germany. Axel, good to have you 0:13:36.920 --> 0:13:40.280 back with us. How are you. I'm very well. How 0:13:40.320 --> 0:13:42.520 are you? We're doing well? Thanks? Hey, um, let's start 0:13:42.520 --> 0:13:43.599 with earnings and then I want to get to what 0:13:43.640 --> 0:13:45.840 you're seeing when it comes to travel demand in Europe 0:13:45.880 --> 0:13:47.679 and around the world. What happened when it came to 0:13:47.720 --> 0:13:51.920 the bottom line just expenses rose, No, not at all. 0:13:52.000 --> 0:13:55.040 I mean we had the highest adjustity but of all times, 0:13:55.200 --> 0:13:59.199 so I record. What happened is that we have have 0:13:59.480 --> 0:14:01.720 quite a lot of goodwill on our balance sheet, which 0:14:01.800 --> 0:14:05.480 is coming from an acquisition ideal years back, and with 0:14:05.600 --> 0:14:08.640 a rising interest rate environment, you basically need to do 0:14:08.760 --> 0:14:12.240 impairment tests every quarter, and the impairment has basically brought 0:14:12.280 --> 0:14:16.040 down the net income and what was there any impact 0:14:16.120 --> 0:14:18.480 at all from the strong dollar. I feel like when 0:14:18.520 --> 0:14:22.520 you look over the third quarter earnings reporting season so far, 0:14:22.640 --> 0:14:25.480 that has been a consistent theme. Was that a factor 0:14:25.600 --> 0:14:29.720 for Triviago as well? Not really. I mean, we are 0:14:29.800 --> 0:14:32.600 a global business, so we operated pretty much everywhere other 0:14:32.680 --> 0:14:37.160 than in China, and so um currencies have an impact, 0:14:37.240 --> 0:14:40.160 but but not a material impact on our numbers. Okay, well, 0:14:40.200 --> 0:14:43.560 let's move out and talk about broader travel environment right now, 0:14:44.000 --> 0:14:47.440 as I've been talking about this throughout the program. Today 0:14:47.640 --> 0:14:49.760 I did a panel for Bloomberg Live at the Bloomberg 0:14:49.800 --> 0:14:52.520 Growth Summit. Katie did as well, and I started off. 0:14:52.600 --> 0:14:56.320 I asked the CMO in chief Digital officer of Virgin Atlantic, 0:14:56.720 --> 0:14:59.480 the airliner based in the UK part of Virgin Group 0:14:59.640 --> 0:15:02.080 also ready nine percent owned by Delta, about demanding what 0:15:02.240 --> 0:15:05.640 she's seeing, Chavonne pitz Fitzpatrick, and she told me that 0:15:06.040 --> 0:15:09.160 they are still seeing robust demand. They're not seeing any 0:15:09.240 --> 0:15:12.400 sort of slow down when it comes to what people 0:15:12.840 --> 0:15:15.880 want to purchase in terms of flights and traveling. And 0:15:15.960 --> 0:15:18.160 it kind of runs counter to what we've been hearing 0:15:18.200 --> 0:15:21.400 about concerns about a recession globally. ACXL. What are you 0:15:21.440 --> 0:15:25.200 seeing on your platform. Yes, so the if you just 0:15:25.320 --> 0:15:27.640 look at the third quarter, the summer was very very 0:15:27.680 --> 0:15:30.600 strong for sure. Um, if you now look look at 0:15:30.640 --> 0:15:34.640 the fourth quarter and really at an automate winter, the 0:15:35.160 --> 0:15:38.240 the demand is very strong. So and what But on 0:15:38.320 --> 0:15:40.560 the other hand, what we are seeing is that they 0:15:40.600 --> 0:15:46.040 are very very first signs, tiny signs of changing consumer 0:15:46.080 --> 0:15:49.520 behavior in Europe, and we believe that Europe will be 0:15:49.600 --> 0:15:53.320 actually hit harder than than the US. What are those tines? 0:15:53.400 --> 0:15:56.240 What are those tiny signs? So what we are seeing, 0:15:56.280 --> 0:15:58.680 I mean, what what you would expect in in in 0:15:58.880 --> 0:16:02.600 a more difficult time that people will try to mitigate 0:16:02.760 --> 0:16:06.680 the increase in in prices by somehow trading down. And 0:16:06.720 --> 0:16:09.440 there are three ways how you can trade down. One 0:16:09.560 --> 0:16:11.560 is you just reduce the length of your trip, and 0:16:11.680 --> 0:16:14.520 we've seen some very early signs of a reduction in 0:16:14.640 --> 0:16:17.640 the length of stay in Europe. The second one is 0:16:17.720 --> 0:16:21.080 that you are taking a cheaper destination. And the destination 0:16:21.160 --> 0:16:23.600 can be cheaper either because it's cheaper to get there 0:16:23.720 --> 0:16:25.520 you can drive there rather and have to fly there, 0:16:26.240 --> 0:16:29.480 or the destination is as such cheaper, and again we've 0:16:29.520 --> 0:16:32.760 seen some very early signs there in Europe and the 0:16:32.880 --> 0:16:35.040 third one is that you just compare more, which is 0:16:35.040 --> 0:16:37.720 obviously for US great because that's what we offer. We 0:16:38.160 --> 0:16:40.800 help users to compare hotel prices. So so actually just 0:16:41.040 --> 0:16:43.720 sticking with this because this is really interesting, interesting data 0:16:43.760 --> 0:16:45.560 that you guys have. Are you talking about this just 0:16:45.720 --> 0:16:49.920 for European customers or is this globally? We can't see 0:16:49.920 --> 0:16:52.400 it in America's yet. And and that that also makes 0:16:52.440 --> 0:16:55.600 sense because the impact of the current crisis is much 0:16:55.640 --> 0:16:59.920 more severe in in Europe. Inflation obviously has hit the 0:17:00.000 --> 0:17:03.640 Western world everywhere, but in Europe you have you have 0:17:03.720 --> 0:17:06.680 a lot more visibility and you have real shortage. So 0:17:06.920 --> 0:17:10.879 there there is concerned that you will run out of 0:17:11.320 --> 0:17:15.119 certain basic goods over winter because they are supply shortages. 0:17:15.280 --> 0:17:19.840 And in addition you have rapidly increasing prices. So the 0:17:19.960 --> 0:17:22.800 sentiment is much worse than than in the US. And 0:17:22.880 --> 0:17:25.359 that's why I would also expect for next year the 0:17:26.000 --> 0:17:28.480 recession or the cool down of the economy to be 0:17:28.600 --> 0:17:31.920 worse in Europe versus the US. Actually you mentioned that 0:17:32.000 --> 0:17:35.119 in Europe, what you're seeing is that people are not 0:17:35.400 --> 0:17:39.280 staying for as long. Uh, their stays have been shortening up. 0:17:39.320 --> 0:17:41.840 And it's interesting, I mean comparing and contrasting that with 0:17:41.960 --> 0:17:45.760 what we heard from Airbnb, who reported earlier this week 0:17:45.800 --> 0:17:48.920 as well. They give a week forecast. There was weakness 0:17:49.000 --> 0:17:52.239 in high end rentals, maybe people not using rentals as 0:17:52.280 --> 0:17:55.760 a place to work from home. Is it a similar 0:17:55.840 --> 0:17:58.600 read and what's going on in Europe with people shortening 0:17:58.640 --> 0:18:02.000 their stays. I think it's very different. I mean, the 0:18:03.240 --> 0:18:06.119 the mix of all the travel companies is obviously very different, 0:18:06.160 --> 0:18:08.760 and geographic makes Europe versus the US, but also the 0:18:08.800 --> 0:18:12.240 business makes and I think Whateverbnb is referring to is 0:18:12.359 --> 0:18:16.800 really this this remote working which is um in a way, 0:18:16.840 --> 0:18:20.879 an upper class phenomenon, and so we we don't have 0:18:21.000 --> 0:18:23.520 the same exposure, not as strong asposure as they have. 0:18:24.160 --> 0:18:26.600 But that that again makes sense because they you have 0:18:26.760 --> 0:18:29.440 more and more companies that moved to a hybrid model 0:18:29.600 --> 0:18:32.400 or some even returned fully to the office. So that's 0:18:32.440 --> 0:18:34.840 not a surprise to me that that you have a 0:18:35.040 --> 0:18:37.840 less demand for fully flexible housing. A lot of people 0:18:37.880 --> 0:18:39.840 think about Triviago as a hotel search platform, but what 0:18:39.920 --> 0:18:41.480 kind of visibility do you have when it comes to 0:18:41.600 --> 0:18:45.920 flights and when it comes to car rentals? Zero it's it, 0:18:46.040 --> 0:18:50.480 but you can book those services on Trivago. No, not really. 0:18:50.560 --> 0:18:52.879 I mean so, so we've run some tests where we 0:18:53.000 --> 0:18:55.920 have actually used wide labeled solutions of other partners. But 0:18:57.240 --> 0:19:00.199 but we we are ourselves. We only operate as an 0:19:00.240 --> 0:19:03.600 accommodation search class. It's interesting and find what I'm seeing 0:19:03.640 --> 0:19:05.600 the problem what we see here see here in the 0:19:05.680 --> 0:19:07.560 US must be a white label version because we can 0:19:07.600 --> 0:19:09.840 go ahead and book those here in the US. We 0:19:09.920 --> 0:19:12.720 were talking earlier about the signs of trouble that you're 0:19:12.720 --> 0:19:15.400 starting to see in Europe. You said you're not seeing 0:19:15.440 --> 0:19:17.639 it here in the US yet. But what do you 0:19:17.760 --> 0:19:19.879 expect to see as a as a person running a 0:19:19.920 --> 0:19:22.320 company that operates in what pretty much every country except 0:19:22.359 --> 0:19:27.080 for China, How are you planning for? So we think 0:19:27.119 --> 0:19:29.439 that actually the absolute spend on travel will be up 0:19:29.520 --> 0:19:33.320 next year, and and why is that the prices will 0:19:33.359 --> 0:19:37.120 continue to rise. You have inflation on pretty much everything 0:19:37.680 --> 0:19:39.440 in the Western world, and we do think that that 0:19:39.520 --> 0:19:42.840 will continue um, but consumers will and that's to a 0:19:42.880 --> 0:19:45.560 different degree in Europe and the US will try to 0:19:46.400 --> 0:19:49.399 counter that that increase in prices. But that that we 0:19:49.520 --> 0:19:52.200 do expect that the overall spending will be up in 0:19:52.240 --> 0:19:55.960 absolute terms. Well, Okay, overall spending, you expect to see 0:19:55.960 --> 0:19:58.760 it up. But tell us about how inflation is impacting 0:19:58.840 --> 0:20:02.520 the business now and pacting travelers. Now, do you see 0:20:02.560 --> 0:20:07.520 an effect? I mean that right now, you see very 0:20:07.560 --> 0:20:10.960 little effect, to be perfectly honest, and in a way 0:20:11.000 --> 0:20:13.320 with that's that's more or less what we've expected. I mean, 0:20:13.640 --> 0:20:16.320 we expected the very very strong summer as we've seen 0:20:16.480 --> 0:20:18.920 the last two years as well, even during the pandemic, 0:20:19.320 --> 0:20:21.960 because in summer is really the time to travel where 0:20:22.000 --> 0:20:24.760 you really want to get a break, um, and where 0:20:24.800 --> 0:20:26.639 you want to see friends and family, et cetera. And 0:20:26.720 --> 0:20:30.760 we've seen that to a very very strong degree. The 0:20:30.800 --> 0:20:33.200 other thing that helped the summer is obviously that the 0:20:33.280 --> 0:20:36.479 savings rate has been very high and in a lot 0:20:36.560 --> 0:20:39.480 of countries, in most countries actually through the pandemic, So 0:20:39.560 --> 0:20:42.440 people have saved money that they could spend on expensive 0:20:42.480 --> 0:20:46.280 travel this year. Um and uh. And they were just 0:20:46.400 --> 0:20:48.440 a lot of a lot of things that were promised 0:20:48.480 --> 0:20:51.040 that were they were pushed out, that that you needed 0:20:51.080 --> 0:20:54.200 to needed to do. I don't know, Disneyland was one 0:20:54.240 --> 0:20:57.159 of our top destinations and you can really imagine how 0:20:57.280 --> 0:20:59.920 many kids were promised that they would they would be 0:21:00.000 --> 0:21:02.080 taken to Disneyland in the last two years, and at 0:21:02.160 --> 0:21:06.119 some point in time you need to honor your promise. Um. So, 0:21:06.640 --> 0:21:09.280 so that's why you can't really see it right now 0:21:09.760 --> 0:21:12.920 other than the very first signs of it. But if 0:21:12.960 --> 0:21:15.560 you look at the world around us and the world 0:21:15.600 --> 0:21:18.720 we are currently living on, everything is getting very expensive 0:21:18.920 --> 0:21:21.720 and the the real wages in a lot of our 0:21:21.840 --> 0:21:25.440 core markets are under pressure, which means that people have 0:21:25.600 --> 0:21:28.919