WEBVTT - Businessweek Extra - Bloomberg Breakaway CEO Summit 0:00:02.520 --> 0:00:06.400 This is Bloomberg Business Week from Bloomberg Radio. I'm Jason 0:00:06.480 --> 0:00:09.000 Kelly and I'm Carol Masser. Welcome to the Bloomberg Business 0:00:09.039 --> 0:00:12.000 Week Extra. It's our weekly podcast bringing you in depth 0:00:12.039 --> 0:00:14.800 interviews you will not hear anywhere else. So we shipped 0:00:14.800 --> 0:00:18.440 you off to London as if you weren't working hard 0:00:18.600 --> 0:00:21.799 enough for traveling enough, and you were there to participate 0:00:21.840 --> 0:00:24.720 in the Bloomberg Breakaway Conference. Sort of your deal. Do 0:00:24.760 --> 0:00:26.520 you do it in New York, you do it in London. 0:00:26.560 --> 0:00:30.360 You catch up with some incredible CEOs, fast growing companies, 0:00:30.360 --> 0:00:33.199 and it's really a community of CEOs all sort of 0:00:33.280 --> 0:00:35.680 learning from each other. I love the vibe. That's exactly 0:00:35.680 --> 0:00:37.320 what it's all about. And I've got to say the 0:00:37.360 --> 0:00:40.720 conversations we had were incredible. It was a variety of industries, 0:00:40.880 --> 0:00:43.559 including a conversation with the CEO of h G. We're 0:00:43.560 --> 0:00:47.640 talking about Intercontinental Hotel. These guys are enormous, so we 0:00:47.760 --> 0:00:50.280 got a view on the hospitality industry, what they're doing 0:00:50.280 --> 0:00:53.440 and also what's the role of a CEO. We talked 0:00:53.440 --> 0:00:56.040 with Keith Barr, who's the CEO of h G. And 0:00:56.080 --> 0:00:58.000 what's interesting, Jason, something that you and I have been 0:00:58.000 --> 0:01:00.480 talking a lot about is what's the role what's the 0:01:00.600 --> 0:01:03.400 role of a company and a CEO in some of 0:01:03.440 --> 0:01:05.759 those bigger, broader issues that are out there, whether it's 0:01:05.800 --> 0:01:08.960 on trade, whether it's on the Hong Kong protests, whether 0:01:09.000 --> 0:01:11.240 it's women on boards. We talked about a lot of things. 0:01:11.640 --> 0:01:13.480 I want to talk about a bunch of things. But 0:01:13.560 --> 0:01:15.320 I know, burn just in a pole and I know 0:01:15.360 --> 0:01:17.320 we missed it, but let's um, I don't know if 0:01:17.319 --> 0:01:19.760 we can bring that back up. About what percentage are 0:01:19.760 --> 0:01:21.640 you expecting to grow your business over the next year? 0:01:21.640 --> 0:01:24.000 And I was curious what the findings are. This was 0:01:24.040 --> 0:01:26.000 the pole we just did, Keith so flat to down. 0:01:26.319 --> 0:01:31.000 So most people are looking for wow, fifty or higher. 0:01:31.680 --> 0:01:34.440 I'd like to be in those businesses. What kind of 0:01:34.440 --> 0:01:40.160 growth right are you looking for? Are you surprised whether 0:01:40.200 --> 0:01:44.360 I mean these are mid you know, mid cap sized companies. No, 0:01:44.400 --> 0:01:46.480 I mean I think if you have mid cap company 0:01:46.680 --> 0:01:48.920 and you have the right business model and the right 0:01:48.960 --> 0:01:51.800 markets is huge potential. I think one of the challenges 0:01:51.840 --> 0:01:54.840 the big multinational space now in the current economic environment 0:01:54.920 --> 0:01:57.520 is how do you continue to grow at the pace 0:01:57.560 --> 0:01:59.360 when your business as big as it is. I mean 0:01:59.640 --> 0:02:02.520 today where eight hundred and fifty thousand hotel rooms open 0:02:02.560 --> 0:02:06.760 around the world, another two development, and on top of 0:02:06.800 --> 0:02:09.360 that base, we're expected to grow and accelerate growth every 0:02:09.440 --> 0:02:11.440 year in a bigger denominator. Not is it in with 0:02:11.480 --> 0:02:14.240 a needle? What kind of visibility do you feel like 0:02:14.240 --> 0:02:17.240 you have on growth right now around the world? We 0:02:17.320 --> 0:02:20.079 have it market by market, and then when you try 0:02:20.080 --> 0:02:22.720 to aggregate it all up, it's confusing, you know, because 0:02:22.760 --> 0:02:24.880 you can sit there and go half full and half empty, 0:02:24.880 --> 0:02:28.240 because you look at things like record low unemployment in 0:02:28.280 --> 0:02:33.200 many markets, continue to see positive GDP growth rising, middle 0:02:33.240 --> 0:02:36.520 class urbanization rising, all these real positives, and then you 0:02:36.560 --> 0:02:41.440 get your head spinning on you know, brexit US China, trade, 0:02:41.560 --> 0:02:46.480 Hong Kong, Germany going potentially into recession, political uncertainty in Mexico. 0:02:46.560 --> 0:02:50.000 And so literally any given week I go, things should 0:02:50.040 --> 0:02:52.000 be either really good or really bad, depending upon which 0:02:52.040 --> 0:02:54.880 news I look at. It really is that voltal in 0:02:54.880 --> 0:02:56.880 this current day and age, and so I think, well, 0:02:56.919 --> 0:02:59.000 you have to think about what your long term growth 0:02:59.040 --> 0:03:02.560 strategy to grow in an ever more increasingly volatile environment. 0:03:03.040 --> 0:03:06.119 I wanted to take us back um two years ago 0:03:06.200 --> 0:03:09.040 when you first became CEO, and you had mentioned to 0:03:09.080 --> 0:03:11.560 me on our prep phone call that your industry was 0:03:11.600 --> 0:03:15.679 bifurcating big getting bigger and the smaller companies struggling, and 0:03:15.720 --> 0:03:17.480 you had to make some decisions fast. Tell us little 0:03:17.480 --> 0:03:19.760 bit about what what you had to go through. Yeah, 0:03:19.760 --> 0:03:22.040 I mean, we have been one of the most successful 0:03:22.520 --> 0:03:25.639 um lodging companies in the hotel industry. So phenomenal total 0:03:25.639 --> 0:03:28.720 shareholder return over a decade. Uh, you know, were on 0:03:28.760 --> 0:03:31.480 public thirteen years fourteen years ago four pounds fifty Today 0:03:31.480 --> 0:03:34.359 we're trading at forty seven pounds. Returned thirteen point six 0:03:34.360 --> 0:03:36.720 billion dollars in cash to shareholders along the way, so 0:03:37.120 --> 0:03:41.280 great returns um. The challenges is the industry is splitting. 0:03:42.160 --> 0:03:45.680 The top five hotel companies today have twenty five percent 0:03:45.920 --> 0:03:49.040 of existing room supply but fifty eight percent of the pipeline. 0:03:49.160 --> 0:03:51.920 So the industry is clearly moving to consolidate amongst the 0:03:51.920 --> 0:03:55.600 biggest players, and we don't want to get left behind, 0:03:56.160 --> 0:03:58.680 and so how do we effectively double our pace of 0:03:58.720 --> 0:04:01.480 growth over on the mid term. And it was really 0:04:01.480 --> 0:04:04.480 coming into saying we've been incredibly successful. We've created a 0:04:04.480 --> 0:04:07.800 lot of shareholder value. The biggest players are moving at 0:04:07.800 --> 0:04:10.240 pace to grow faster. What do we need to do 0:04:10.320 --> 0:04:12.480 to grow at that pace going forward? And we had 0:04:12.520 --> 0:04:14.600 to really transform the company of the last two years 0:04:14.600 --> 0:04:15.960 to be able to do that well. And I want 0:04:15.960 --> 0:04:17.719 to get into what you did, because you really challenged 0:04:17.760 --> 0:04:20.240 your team, right, Yeah, what did you say? Like? Because 0:04:20.279 --> 0:04:22.400 what you guys have to figure out what it was 0:04:22.480 --> 0:04:25.640 really And it was a difficult one because again, the 0:04:25.760 --> 0:04:29.159 narrative had been rightfully so we've been incredibly successful, but 0:04:29.600 --> 0:04:32.240 things had changed, uh, And so effectively, I took my 0:04:32.240 --> 0:04:34.880 senior team and they didn't know about it, but I 0:04:34.960 --> 0:04:38.760 walked them into a room with board after board after 0:04:38.800 --> 0:04:41.920 board of content about what analysts were saying about us, 0:04:41.960 --> 0:04:44.359 what are people were saying about us, what was happening 0:04:44.360 --> 0:04:47.880 with the competition? And it was a stark wake up call, 0:04:48.400 --> 0:04:51.920 which was good company, great potential. What are they gonna 0:04:51.920 --> 0:04:54.760 be able to compete going forward? Can we be agile enough? 0:04:54.839 --> 0:04:57.800 Can we move fast enough? Our colleagues saying, you know, 0:04:57.920 --> 0:05:00.120 can we really compete? What's it going to take? And 0:05:00.160 --> 0:05:03.000 so it was that kind of in your face wake 0:05:03.080 --> 0:05:04.880 up call because it's quite easy for me to sit 0:05:04.880 --> 0:05:07.440 there and say, hey, we've been successful and keep doing 0:05:07.520 --> 0:05:10.000 what we're doing. And yeah, we'll keep growing margin and 0:05:10.040 --> 0:05:12.440 we'll keep growing cash and we're gonna be a good company, right, 0:05:12.640 --> 0:05:14.719 But really to be competitive, we were going to have 0:05:14.800 --> 0:05:16.080 to change. And I had to wake him up to that. 0:05:16.480 --> 0:05:17.599 M and A was a part of it. And I 0:05:17.640 --> 0:05:19.240 want to talk to you about that. I want to 0:05:19.279 --> 0:05:21.760 ask our breakaway members. Pull out your phone once again, 0:05:21.960 --> 0:05:25.839 got a pulling what you believe is the best way 0:05:26.080 --> 0:05:29.120 to grow your company, and your choices are by my 0:05:29.240 --> 0:05:34.800 way there, organic, all the way, investments, technology, and as 0:05:34.800 --> 0:05:37.599 that pole comes in, um, I want to ask you, Keith, 0:05:37.600 --> 0:05:39.440 because I know M and A was a big part 0:05:39.760 --> 0:05:52.120 of your strategy. Technology, organic, Okay, interesting, M and A 0:05:52.320 --> 0:05:55.600 was the way for you guys, and organic it was yeah, both. 0:05:55.640 --> 0:05:57.960 And so I came out two years ago to our 0:05:57.960 --> 0:06:00.520 shareholders and said, I'm going to restructure the company. I'm 0:06:00.520 --> 0:06:02.480 gonna take a bunch of costs out of this business, 0:06:02.520 --> 0:06:05.080 about a hundred and twenty five million dollars of costs down. 0:06:05.279 --> 0:06:06.560 I'm not going to give any of it back to 0:06:06.600 --> 0:06:09.240 my shareholders and invest at all for growth. And that 0:06:09.320 --> 0:06:11.800 growth is going to underpin effectively our ability to acquire 0:06:11.839 --> 0:06:15.320 a couple of companies and then launch three brands organically 0:06:15.520 --> 0:06:19.880 because um, you know, in our business model, organic launches 0:06:20.240 --> 0:06:23.160 phenomenal returns on capital right, almost infinite because we don't 0:06:23.160 --> 0:06:25.760 have to spend that much, and so those are incredibly creative. 0:06:26.080 --> 0:06:29.400 But we can't do everything organically, and so we recognize 0:06:29.440 --> 0:06:31.760 in the luxury space in particular, we were going to 0:06:31.839 --> 0:06:33.600 have to do M and A, and so we had 0:06:33.600 --> 0:06:36.600 acquired Kimpton Hotels and Restaurants in the US, the leading 0:06:36.600 --> 0:06:39.160 boutique company. We then went out inquired Regent, and then 0:06:39.160 --> 0:06:43.080 we went out inquired Six Senses. So again uber luxury brands, 0:06:43.120 --> 0:06:47.000 luxury brands, lifestyle boutique ones that have taken decades to build, 0:06:47.960 --> 0:06:49.840 and so I was acquiring that I P. I was 0:06:49.880 --> 0:06:52.840 acquiring that brand equity, um, because it would take me 0:06:52.880 --> 0:06:54.400 a long time to build in a lot of capital. 0:06:54.640 --> 0:06:56.400 But then I went out and launched a few brands 0:06:56.560 --> 0:06:58.960 where I could build those quickly, get them out there, 0:06:59.040 --> 0:07:02.440 and again sell those and just grow the business accelerated 0:07:02.480 --> 0:07:05.120 that way. So a combination of the two. Growth also 0:07:05.200 --> 0:07:10.440 sometimes means taking the underperforming, non performing assets out as well. Right, 0:07:10.520 --> 0:07:14.360 you were shutting properties as well. Yeah, it's that's probably 0:07:14.360 --> 0:07:17.520 one of the hardest things in this job. Why because 0:07:17.960 --> 0:07:22.880 you can really convince yourself to keep bad hotels because 0:07:22.920 --> 0:07:26.160 they're paying you money. And when you're under pressure to perform, 0:07:26.320 --> 0:07:29.960 to show growth, to show revenue cash generation, to think 0:07:30.560 --> 0:07:33.600 should I really take these hotels out? But you have 0:07:33.640 --> 0:07:35.760 to remind yourself and these rules in particular, you are 0:07:35.800 --> 0:07:38.320 the stewards of this business for the long term. And 0:07:38.360 --> 0:07:40.520 it takes a long time to screw up a brand, 0:07:40.880 --> 0:07:42.600 but once you've done it, it takes a long time 0:07:42.640 --> 0:07:46.160 to fix it. And so we're consciously taking out about 0:07:46.280 --> 0:07:49.240 two and a half percent of our system globally every 0:07:49.240 --> 0:07:53.200 single year and just culling out poor quality reevaluating every year. 0:07:53.360 --> 0:07:55.120 Every year, we're taking out about two to three percent 0:07:55.200 --> 0:07:57.400 of our hotels, and that's just saying, you know what, 0:07:57.560 --> 0:08:01.200 it's a poor quality asset, wrong location. And to keep 0:08:01.240 --> 0:08:03.800 moving quality up and moving customer perception up, you have 0:08:03.880 --> 0:08:08.040 to do it. And when companies don't, they're more profitable 0:08:08.040 --> 0:08:10.200 in the short term, they pay for it in the 0:08:10.240 --> 0:08:12.720 long term because effectively, customers begin to lose faith and 0:08:12.720 --> 0:08:15.200 trust in you. What about an investment that you make 0:08:15.200 --> 0:08:17.880 our new property you open up, how much time is 0:08:17.920 --> 0:08:20.640 a fair amount of time to give it to make 0:08:20.720 --> 0:08:23.560 to give it a go, and are you willing to say, wait, 0:08:23.600 --> 0:08:27.880 I made a mistake, this isn't working. It varies by brand, 0:08:28.120 --> 0:08:29.800 you know, and things like that. I mean, most of 0:08:29.800 --> 0:08:31.440 our deals are long term deals. So you've got ten 0:08:32.440 --> 0:08:35.959 year deals, so most of the removals are happening at 0:08:36.000 --> 0:08:38.360 the latter portion of the life cycle of a hotel. 0:08:38.559 --> 0:08:41.160 And read the question there is do we renew it 0:08:41.600 --> 0:08:44.080 for another ten years, another twenty years, or do we 0:08:44.120 --> 0:08:46.280 take it out? Or if we have a hotel that's 0:08:46.320 --> 0:08:48.720 coming near the end but isn't performing well, do we 0:08:48.760 --> 0:08:50.400 take a legal route and say, you know what, you're 0:08:50.440 --> 0:08:53.000 not meeting our standards and and it's time to take 0:08:53.040 --> 0:08:55.240 you out of the system. We always try to work 0:08:55.240 --> 0:08:58.280 with our owners, because again we're UM an eleven billion, 0:08:58.360 --> 0:09:01.200 almost told billion market cap company where asset light though, 0:09:01.240 --> 0:09:03.920 so out of five thousand, seven hundred hotels around the 0:09:03.920 --> 0:09:06.720 world today, we only have an owned and least stake 0:09:06.720 --> 0:09:10.079 in twenty one hotels. Now that's changed dramatically of the 0:09:10.160 --> 0:09:12.640 last decade. We used to own hundreds and hundreds of hotels. 0:09:12.880 --> 0:09:15.200 The last hotel we sold was the Intercontinental in Hong 0:09:15.280 --> 0:09:18.160 Kong for ninety five million dollars to give you context, 0:09:18.240 --> 0:09:20.920 So we had lots of big boxes, lots of real estate. 0:09:21.280 --> 0:09:23.480 We're now down to where we say we grow with 0:09:23.520 --> 0:09:26.959 other people's money because we partner with real estate investors 0:09:26.960 --> 0:09:29.400 around the world to open hotels, and so I always 0:09:29.400 --> 0:09:30.760 want to work with them to make sure we're a 0:09:30.800 --> 0:09:32.880 good business partner. But if they're not going to be 0:09:32.920 --> 0:09:34.800 good stewards of our brands, fund a man that I 0:09:34.840 --> 0:09:38.600 have taken out makes sense. Where are you seeing growth 0:09:38.600 --> 0:09:40.120 the most? When you look around the world, what are 0:09:40.120 --> 0:09:42.560 some of the markets that you find? Things are just 0:09:42.640 --> 0:09:44.680 kind of falling into place and there's a lot of demand. 0:09:45.280 --> 0:09:47.720 So I am I'm originally from the States, been been 0:09:47.760 --> 0:09:50.880 overseas for the the last fourteen years, lived in Australia, China 0:09:51.000 --> 0:09:53.360 and the UK for the last seven. I built our 0:09:53.440 --> 0:09:55.560 China strategy and that is a third of our company's growth. 0:09:55.559 --> 0:09:58.040 You're in China for a while, yeah, almost five years, Uh, 0:09:58.080 --> 0:10:01.600 and it's an extraordinary market and so uh today it's 0:10:01.600 --> 0:10:03.800 about a third of our company's growth and growing kind 0:10:03.800 --> 0:10:06.720 of probably three x four x the rest of the 0:10:06.760 --> 0:10:10.080 world on big numbers too, and So when you think 0:10:10.080 --> 0:10:14.040 about on a global basis, lets US, for example, supply 0:10:14.120 --> 0:10:17.400 growth in the US is around two percent. The supply 0:10:17.440 --> 0:10:20.319 growth in China excluding the economy segment will be between 0:10:20.320 --> 0:10:24.360 eight and ten percent. So it's it's growing massively and 0:10:24.400 --> 0:10:27.520 it's the level of infrastructure investment. So China is huge 0:10:27.559 --> 0:10:30.160 for US from a growth perspective. We're accelerate our growth 0:10:30.200 --> 0:10:32.280 in the US, but it's our biggest market. But then 0:10:32.320 --> 0:10:35.840 you've got other exciting markets like Japan is continuing accelerating growth, 0:10:36.360 --> 0:10:39.959 Vietnam is continuing to accelerate growth, and you've got pockets 0:10:39.960 --> 0:10:41.719 also in Europe. Now coming out of that kind of 0:10:41.720 --> 0:10:44.160 the duldrooms after the fential crisis are beginning to see 0:10:44.200 --> 0:10:46.839 growth as well. Where aren't you seeing growth? Where aren't 0:10:46.840 --> 0:10:50.040 we seeing growth? Where seeing kind of the weakness you 0:10:50.080 --> 0:10:52.560 know what I mean? Places that we think that should 0:10:52.559 --> 0:10:55.360 grow that aren't. Like Mexico is a good example. Mexico 0:10:55.440 --> 0:10:58.800 has great potential, but with the political instability there, you're 0:10:58.800 --> 0:11:01.040 not seeing You're seeing growth, but not the growth to 0:11:01.160 --> 0:11:04.440 the potential of that market. Overall, UH and you are 0:11:04.520 --> 0:11:07.280 seeing some slowing and some of the more with tool markets. Now, 0:11:07.600 --> 0:11:10.400 UK is a good example where there's not a lot 0:11:10.440 --> 0:11:13.080 of new growth happening here. London is doing fantastic, but 0:11:13.120 --> 0:11:15.480 the provinces are struggling here in the UK because of 0:11:15.520 --> 0:11:19.200 the impact of brexit. UM Germany is beginning to slow 0:11:19.240 --> 0:11:21.319 down a bit too, getting close to being in intercession 0:11:21.360 --> 0:11:23.720 as well. The nice thing about our model though, is 0:11:23.720 --> 0:11:26.360 we're in a hundred countries around the world, so you 0:11:26.360 --> 0:11:28.560 know it's a bit of Some markets are down, some 0:11:28.600 --> 0:11:31.439 markets are up, and we continue to grow you over year. 0:11:31.840 --> 0:11:34.240 I want to ask everybody, since you mentioned brexit, UM, 0:11:34.480 --> 0:11:37.200 got another question for you, what external factor is hindering 0:11:37.240 --> 0:11:40.280 your company's growth the most? And our choices are Brexit, 0:11:40.360 --> 0:11:45.600 trade tensions, that's all one, disruptive technology, lack of qualified talent, 0:11:46.120 --> 0:11:50.400 access to capital, over regulation, and others. So as those 0:11:50.440 --> 0:11:53.040 come in, we'll pull them into our conversation. But I'm 0:11:53.040 --> 0:11:56.200 curious what external factor is hindering your company's growth the most. 0:11:56.720 --> 0:11:58.800 I'll think what frustrates me the most because we're growing 0:11:59.080 --> 0:12:01.040 quite well. We're actually doubling our pace of growth right now, 0:12:01.040 --> 0:12:03.560 so it's hard for me to say is governments don't 0:12:03.679 --> 0:12:07.520 really understand the value value of tourism and hospitality. On 0:12:07.559 --> 0:12:10.440 the economic cycle of the world. Um so when in 0:12:10.480 --> 0:12:13.560 ten jobs today it exists as related to travel, on 0:12:13.600 --> 0:12:16.720 hospitality and tourism about to inten close to is that 0:12:16.800 --> 0:12:19.880 what's being created. It's it's a huge part of the 0:12:19.880 --> 0:12:23.120 global economy. It's a huge part of giving people skills 0:12:23.120 --> 0:12:25.120 where they can start entry level and work their way up. 0:12:25.480 --> 0:12:27.520 And it's a huge part of value creation and cross 0:12:27.559 --> 0:12:31.280 real estate. Most governments really take this industry for granted 0:12:31.600 --> 0:12:34.160 and just assume it's going to happen, and so governments 0:12:34.200 --> 0:12:37.720 that really understand the value of tourism and infrastructure benefit 0:12:37.760 --> 0:12:40.200 from it. But I'll give you an example one country 0:12:40.240 --> 0:12:43.560 I used to live in where the tourism portfolio got 0:12:43.640 --> 0:12:48.000 lumped with the resources portfolio Australia. Imagine how much how 0:12:48.080 --> 0:12:50.760 much focused tourism got when the minister was also worrying 0:12:50.800 --> 0:12:52.920 about resources, which is the single biggest thing drive in 0:12:52.920 --> 0:12:56.360 the Australian economy. Yeah, and so, and it's sitting down 0:12:56.360 --> 0:12:59.120 with with people think about labor. You know, immigration policy. 0:12:59.160 --> 0:13:02.560 You know, I've been pushed aggressively. I've had multiple meetings 0:13:02.600 --> 0:13:04.959 here in number ten. You're saying you've got to rethink 0:13:05.000 --> 0:13:08.320 your immigration policy because you don't understand what the impact 0:13:08.400 --> 0:13:11.520 of what you're suggesting are you know, and and and 0:13:11.559 --> 0:13:13.880 that that's what frustrates me when governments really take for 0:13:13.920 --> 0:13:16.959 granted an industry and don't understand that how much value 0:13:17.000 --> 0:13:20.240 can do about accelerating growth and driving prosperity for for 0:13:20.280 --> 0:13:22.800 countries and creating jobs. Do you find it interesting? I 0:13:22.880 --> 0:13:24.840 just want to look at their responses, what what external 0:13:24.840 --> 0:13:27.400 factor is hindering your growth? And most they say access 0:13:27.440 --> 0:13:30.360 to capital? And I think if you're a startup, I 0:13:30.360 --> 0:13:32.800 could you know and understand? I can understand it. Um, 0:13:32.840 --> 0:13:35.400 what's strange? In my kind of an easy money environment? 0:13:35.440 --> 0:13:37.400 There's so much such a way to capital. I mean 0:13:37.480 --> 0:13:39.680 right now, I mean we're in an environment where we 0:13:39.720 --> 0:13:43.679 have never seen more access to capital private, public market, 0:13:43.720 --> 0:13:47.320 especially private markets incredible amounts. I mean, yeah, does that 0:13:47.360 --> 0:13:50.720 surprise you? Did? It did surprise me in that, you know, 0:13:50.720 --> 0:13:52.640 because I mean even like I was, I was, I 0:13:52.720 --> 0:13:54.000 was just in a meeting now in a real estate 0:13:54.040 --> 0:13:56.920 development group, and you know, people are constantly saying, I've 0:13:56.960 --> 0:13:59.959 got two billion dollars of capital to deploy. Where can 0:14:00.000 --> 0:14:04.920 I put this? Because Johan's somebody wants to that. Anybody 0:14:04.920 --> 0:14:08.600 needs some some hotel real estate, and there's I mean, 0:14:08.600 --> 0:14:10.480 that's one of the real challenges in today's age. Right, 0:14:10.640 --> 0:14:14.640 You've got historically low cost of debt, huge amount of 0:14:14.679 --> 0:14:17.040 capital sitting on the sideline need to be put to work. 0:14:17.559 --> 0:14:19.720 Where does it find the right returns? And that's driven 0:14:19.800 --> 0:14:23.440 some interesting behaviors in the public markets. Have you've seen recently, Absolutely, 0:14:23.600 --> 0:14:30.160 we work anyone. Yeah. Um, future growth. I do wonder about, 0:14:30.280 --> 0:14:32.120 like you talked about China. I want to dig a 0:14:32.120 --> 0:14:35.920 little bit deeper into that because I have this little 0:14:36.120 --> 0:14:40.480 tricky times and strange bedfellows growth into a politics, and 0:14:40.520 --> 0:14:42.960 I think about China specifically Hong Kong. There was some 0:14:43.040 --> 0:14:46.000 impact on your earnings. Others in the hospitality industry, in 0:14:46.000 --> 0:14:48.640 the luxury industry are certainly feeling the result of those 0:14:48.680 --> 0:14:51.400 Hong Kong protests. Um. I think about the n b 0:14:51.560 --> 0:14:55.320 A getting whips ode after one of their coaches made 0:14:55.360 --> 0:14:58.720 some comments in support of the protesters, and then quickly 0:14:58.760 --> 0:15:01.160 the NBA saying wait, wait, wait, wait, you know we 0:15:01.280 --> 0:15:04.120 love you China. I do wonder about, you know, what 0:15:04.320 --> 0:15:08.480 is your responsibility and role as the head of a 0:15:08.480 --> 0:15:11.040 publicly health company, as a leader that has looked to 0:15:11.640 --> 0:15:15.040 when there are injustices around the world, and yet you 0:15:15.080 --> 0:15:17.000 still want to make sure the door is open for business. 0:15:17.120 --> 0:15:19.360 How do you how do you reconcile this? Yeah, it's one. 0:15:19.400 --> 0:15:21.480 It's one of the tensions in leading global companies of 0:15:21.600 --> 0:15:24.960 understanding what level of drive for change and advocacy do 0:15:25.040 --> 0:15:28.440 you have to take and what's your role in society overall? 0:15:29.200 --> 0:15:32.120 I think in this day and age um there is 0:15:32.160 --> 0:15:35.280 more of an expectations of global chief executives state more 0:15:35.280 --> 0:15:38.000 of a leadership role on big issues, whether that's you 0:15:38.040 --> 0:15:40.240 know I talked about like sustainability is a big thing 0:15:40.240 --> 0:15:43.120 that we're focused on. We come back to diversing inclusions 0:15:43.160 --> 0:15:45.800 nothing because in general, people see governments failing in those 0:15:45.800 --> 0:15:48.360 spaces and customers and colleagues look to us as saying, 0:15:48.480 --> 0:15:50.520 what are you going to do about it? Right now? 0:15:50.520 --> 0:15:52.040 When it comes to some of the broader issues of 0:15:52.080 --> 0:15:54.920 where you're gonna work, you know, we've been in place. 0:15:54.920 --> 0:15:56.760 We've been in China for thirty five years. We're at 0:15:56.760 --> 0:15:59.560 the foundation of that industry and so you know we're 0:15:59.600 --> 0:16:02.560 we're can closely across China. Thing. How do we work 0:16:02.600 --> 0:16:05.360 with universities and schools to develop talent and help people 0:16:05.640 --> 0:16:08.840 to come into centery and build, build prosperity, and build careers. 0:16:08.880 --> 0:16:11.160 And so, you know, we talked about our core purposes 0:16:11.200 --> 0:16:14.160 true hospitality for everyone, and that means in the communities 0:16:14.160 --> 0:16:16.320 who work, and so we helped build schools in China. 0:16:16.680 --> 0:16:19.320 We partner with universities, we train and develop. We have 0:16:19.480 --> 0:16:22.600 thousands of students in our academies UM because we really 0:16:22.600 --> 0:16:25.360 fundamentally believe that as people travel the world more and 0:16:25.440 --> 0:16:28.160 stay connected, that the world is a better place. And 0:16:28.160 --> 0:16:30.640 that makes me see the results of that in terms 0:16:30.720 --> 0:16:32.760 of being involved in a place. And you have said, no, 0:16:32.920 --> 0:16:35.160 I know, we talked about a Russian deal and you 0:16:35.200 --> 0:16:37.160 guys were like, Nope, they're not going to get involved. 0:16:37.600 --> 0:16:40.240 But during China for a long time, you're in Saudi Arabia, 0:16:40.520 --> 0:16:42.920 you're in the Middle East. Yeah, you know, it's being 0:16:42.960 --> 0:16:46.120 an advocacy for changing and we talked about for example, 0:16:46.600 --> 0:16:48.520 UH in Australia last year, the team came to me 0:16:48.560 --> 0:16:50.960 and said, we want to publicly come out and support 0:16:51.520 --> 0:16:54.840 UM gay marriage, and I said, absolutely, We'll get behind it. 0:16:54.960 --> 0:16:57.720 Change your logo, we change our logo for pride UH 0:16:57.760 --> 0:17:00.360 and now we can do that there. Now in some markets, 0:17:00.400 --> 0:17:02.560 I wouldn't do that because effectively, I know that it 0:17:02.600 --> 0:17:04.919 goes against government policy or the laws, But how can 0:17:04.960 --> 0:17:07.040 we advocate for other change trying to make things better? 0:17:07.080 --> 0:17:09.920 And so you know, you mentioned Saudi is an example 0:17:09.960 --> 0:17:13.600 of where there's been transformational change for for for in 0:17:13.640 --> 0:17:16.679 the positive in terms of the Saudi ization of the workforce, 0:17:17.080 --> 0:17:20.080 the role of women um in the workforce. Now the 0:17:20.160 --> 0:17:24.320 opening up of Saudi too now fifty one countries, visa 0:17:24.359 --> 0:17:27.240 and arrivals. So lots of positive there now that without question. 0:17:27.280 --> 0:17:28.760 They've been challenges in the past though, and things that 0:17:28.760 --> 0:17:31.600 aren't right right and so but if you're in there, 0:17:31.600 --> 0:17:34.320 you're in the dialogue. You can help shape things for 0:17:34.440 --> 0:17:36.400 the better, for the future and help continue to build 0:17:36.400 --> 0:17:38.520 out that industry. And the more that you know, more 0:17:38.600 --> 0:17:41.920 the country's open up, we believe it's better for the world. 0:17:42.400 --> 0:17:44.680 And you do see the fruture effort. I'm going to 0:17:44.720 --> 0:17:47.080 purse a little bit because I do think after Jamals, 0:17:47.960 --> 0:17:52.040 I think we just the world couldn't believe it right, 0:17:52.119 --> 0:17:54.080 and I think everyone thought okay, and the world did 0:17:54.119 --> 0:17:58.000 take a step back um roughly a year later or so. 0:17:58.440 --> 0:18:02.280 Saudia Ramco certainly see the financial community everybody wants a piece. 0:18:02.880 --> 0:18:04.760 I'm not making a judgment call, but I do wonder 0:18:05.040 --> 0:18:07.440 when is it that you know companies have to put 0:18:07.440 --> 0:18:09.880 their foot down and say this is not okay. Yeah, 0:18:09.920 --> 0:18:12.199 I mean, and again I understand there's cultural differences, but 0:18:12.200 --> 0:18:14.640 then there's something that was horrible and it was wrong. 0:18:15.440 --> 0:18:17.720 What happened? You have a choice. They saying this is 0:18:17.720 --> 0:18:19.760 a country that is going to continue to open up, 0:18:20.280 --> 0:18:23.480 wants to drive for international tourism, wants to be more 0:18:23.640 --> 0:18:25.760 open to business, wants to open up to more cultures. 0:18:26.200 --> 0:18:28.919 Do you participate in that and help that happen or 0:18:28.920 --> 0:18:30.440 do you sit back and say, no, we don't want 0:18:30.440 --> 0:18:33.200 that to happen at all. And so, you know, generally 0:18:33.400 --> 0:18:35.680 are like I think when I go back to China, 0:18:35.760 --> 0:18:38.240 go the positive influence we've had in shape in their 0:18:38.320 --> 0:18:40.919 telustry in China is great, and we can do that 0:18:40.920 --> 0:18:42.520 in so many different countries in the world. You see 0:18:42.560 --> 0:18:45.000 an impact by being there, Well, I see it in 0:18:45.040 --> 0:18:47.119 the people that we've helped in their careers. So I 0:18:47.119 --> 0:18:51.639 look at so my team when I moved to China 0:18:52.000 --> 0:18:55.359 was in the general managers. There were principally foreigners. I 0:18:55.359 --> 0:18:58.359 would go into room like this and running my Chinese business. 0:18:58.440 --> 0:19:02.280 We're basically expats, and we made a commitment when I 0:19:02.280 --> 0:19:03.879 was there eleven years ago saying, you know, we have 0:19:03.960 --> 0:19:06.359 to localize our workforce because that's the right thing for 0:19:06.400 --> 0:19:08.760 to do this industry long term. And today I walk 0:19:08.840 --> 0:19:12.640 into our our leadership team meeting there like Chinese now, 0:19:13.520 --> 0:19:15.560 these teams have worked for us sometimes for ten and 0:19:15.640 --> 0:19:19.680 fifteen years, and so we've given We've enabled their careers 0:19:19.720 --> 0:19:22.240 to develop and grow. And so that's the good that 0:19:22.320 --> 0:19:24.800 we can do is as an industry to help grow 0:19:24.840 --> 0:19:26.800 people's careers and give them access and then help people 0:19:26.840 --> 0:19:29.320 work internationally as well too. So so when you think 0:19:29.320 --> 0:19:31.280