WEBVTT - Housing, Return-To-Work, And Travel (Podcast)

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<v Speaker 1>Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside

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<v Speaker 1>my co host Matt Miller. Every business day, we bring

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<v Speaker 1>you interviews from CEOs, market pros, and Bloomberg experts, along

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<v Speaker 1>with essential market moving news. Find the Bloomberg Markets Podcast

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<v Speaker 1>on Apple Podcasts or wherever you listen to podcasts, and

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<v Speaker 1>at Bloomberg dot com slash podcast. I have to say,

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<v Speaker 1>this is a segment. I can't believe we haven't done already. Well,

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<v Speaker 1>we haven't had a MBS analyst at b I. Well

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<v Speaker 1>now we do. Now we do absolutely, Erica Aidelberg. She

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<v Speaker 1>is the mbent strategist for Bloomberg Intelligence. He joins us

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<v Speaker 1>here in our Bloomberg Interactor Broker studio, Adelberger Aidelberg. Is

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<v Speaker 1>there a difference, Well, there's an a So if there

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<v Speaker 1>are two different German words adel and ood li and um,

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<v Speaker 1>but they're both spuilt either a d e L or

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<v Speaker 1>E d e l and they both kind of mean

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<v Speaker 1>noble or royal. So okay, anyway, we are today by

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<v Speaker 1>your President, Yes we are, Eric, We have a federal

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<v Speaker 1>reserve that's going to start selling mortgage backed securities. Is

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<v Speaker 1>that something you're looking for? So? How does that impact

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<v Speaker 1>your market, the mortgage back securities market, It's got to

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<v Speaker 1>be a tectonic shift. Well. Yeah, Traditionally, the FED just

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<v Speaker 1>allowed the portfolio to actually, you know, decrease the size

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<v Speaker 1>of its portfolio, of its FED footprint, by letting the

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<v Speaker 1>principal paydounds run off as prepais came in and as

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<v Speaker 1>scheduled deamorgiztations came in. But they've put in a lot

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<v Speaker 1>of language recently into their speeches that says that they're

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<v Speaker 1>seriously considering selling because the size of the NBAS portfolio

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<v Speaker 1>has gotten so large at two point seven trillion and

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<v Speaker 1>about a third of the mortgage index. So they're actually

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<v Speaker 1>talking about selling. They've said they'll give a lot of

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<v Speaker 1>lead time if they do so, but I think a

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<v Speaker 1>lot of people are now actually taking them at their

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<v Speaker 1>word and saying, even though it will involve some write

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<v Speaker 1>down losses, perhaps that they may actually start selling as

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<v Speaker 1>early as late two thousand or early uh two three.

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<v Speaker 1>So So what is this like for them? I mean

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<v Speaker 1>I imagine this must be like, um, you know, a

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<v Speaker 1>nine pound guerilla gets out of the pool, right, that's

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<v Speaker 1>very accurate. Yeah, there there's gonna be a lot of

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<v Speaker 1>water that has to be absorbed by the rest of

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<v Speaker 1>the market, if you will, or mortgage backed securities in

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<v Speaker 1>this case. So we've already seen a lot of spread widening. UM.

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<v Speaker 1>The mortgage spreads are definitely wider than they were before

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<v Speaker 1>this uh QUE four before this round of quantitative easing.

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<v Speaker 1>So the big question is is that going to be

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<v Speaker 1>enough and who's going to absorb the rest? So, you know,

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<v Speaker 1>it's interesting here. The first quarter was really tough for

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<v Speaker 1>fixing come investors, really tough and return perspective. How's the

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<v Speaker 1>MBS market, how's that been trading? The NBS market is

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<v Speaker 1>definitely on tap for one of its years on record already.

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<v Speaker 1>We're calling for probably the first ever consecutive year of

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<v Speaker 1>negative absolute returns and probably very very likely the third

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<v Speaker 1>ever consecutive year of negative excess returns that has returns

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<v Speaker 1>versus their hedges. So yeah, it's it's not looking like

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<v Speaker 1>a great year from morgas backed securities. UM. On the

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<v Speaker 1>bright side, we've widened so much that we think the

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<v Speaker 1>rest of the year could be a lot better. Uh

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<v Speaker 1>you know, do the Wall Street trading firms have big

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<v Speaker 1>MBS trading operations still on these days? Relatively small. Actually, Um,

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<v Speaker 1>nobody has a big trading operation compared to the FED

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<v Speaker 1>right now. But uh, no that the the they haven't Actually,

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<v Speaker 1>if you will, they're not actually probably going to provide

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<v Speaker 1>that much intermediation unless spreads get really cheap. So uh,

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<v Speaker 1>for better for worse? Did they before the financial crisis? Um,

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<v Speaker 1>they were a little bit more involved, But you know,

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<v Speaker 1>I think I think for years now the bigger holders

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<v Speaker 1>have been banks, the FED into some degree money managers.

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<v Speaker 1>But are we back to um, you know, people wrapping

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<v Speaker 1>mortgages in big collateralized debt instruments. We're not. No, almost

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<v Speaker 1>everything is currently just an agency NBS and again held

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<v Speaker 1>by uh combination of other investors taking up about a

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<v Speaker 1>third of the market, banks holding about a third of

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<v Speaker 1>the market, and the FED holding about a third of

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<v Speaker 1>the market. Just an agency NBS pools. I just asked

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<v Speaker 1>because I went to a dinner. I went to a

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<v Speaker 1>passover sater on Saturday. Good and uh it was great fun. Um.

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<v Speaker 1>But one of the things people were talking about was

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<v Speaker 1>the relentless rise in housing prices and the fact that

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<v Speaker 1>you know, everyone that we we were talking to at

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<v Speaker 1>the table had just sort of stretched as far as

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<v Speaker 1>possible financially to buy a house, and if prices come down,

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<v Speaker 1>it's bad. But I guess what I hear from people

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<v Speaker 1>in in the industry is that nobody's leveraged up the

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<v Speaker 1>way they were in two thousand seven. Right. The big

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<v Speaker 1>difference UM right now is that both household leverage and

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<v Speaker 1>mortgage finance leverage are much much lower than they were

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<v Speaker 1>in two thousand eight. So not only that, but I

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<v Speaker 1>think very few people are actually calling for a housing downturn.

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<v Speaker 1>They weren't in two thousand and eight either, to be fair,

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<v Speaker 1>but they because of the fact that the amount of

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<v Speaker 1>supply currently is so much lower and there's a real

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<v Speaker 1>inventory crunch, so they think that's going to keep. They

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<v Speaker 1>think housing prices will stop going up as as dramatically

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<v Speaker 1>as they've been going up. You can't sustain year, especially

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<v Speaker 1>at five plus mortgage rates. But they do think that, um,

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<v Speaker 1>you know, the housing market probably will just slow. Housing

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<v Speaker 1>starts are picking up to try to alleviate some of

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<v Speaker 1>that supply. UM. Home prices never go down. Never. Yeah,

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<v Speaker 1>we had good housing start numbers out this morning. Erica Aidelberger,

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<v Speaker 1>thank you so much for the bad confidence. But bad confidence.

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<v Speaker 1>Remember yesterday, John Tucker was telling us homebuilder was confidence

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<v Speaker 1>in a seven month low's still it's still pretty good.

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<v Speaker 1>I'm geting more stuff coming ry. Eric Adibor, thank you

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<v Speaker 1>so much for joining us. She's an NBA strategist Bloomberg Intelligence,

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<v Speaker 1>joining us here on our Bloomberg Interactive Broker studio. Alright,

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<v Speaker 1>let's talk markets here and we do that with Mark Smith.

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<v Speaker 1>He's a senior vice president for investments at Wells Fargo Advisors. Mark,

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<v Speaker 1>We've got a FED that's talking about, you know, and

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<v Speaker 1>in a big way, raising interest rates. Yet I've got

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<v Speaker 1>I've got a market that's still feels pretty risk onto me.

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<v Speaker 1>What are you telling your clients? Well, I'm telling my

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<v Speaker 1>clients right now that you've got to be nimble. Well,

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<v Speaker 1>we're in an environment right now where you have a St.

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<v Speaker 1>Louis FED member James Bullard saying that we could possibly

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<v Speaker 1>see a seventy basis point rate hike. Um, you know

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<v Speaker 1>that should cause pause for anybody. Look to anyone looking

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<v Speaker 1>for some stability in the markets, because you know, traditionally,

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<v Speaker 1>you know, we've seen small incremental moves twenty basis points. Um.

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<v Speaker 1>You know, over you know, a year and a year

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<v Speaker 1>and a half period. If you're talking about moving rates

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<v Speaker 1>of seventy five basis points, of course, that's going to

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<v Speaker 1>affect the market. That's going to affect everything from buying

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<v Speaker 1>a home. You know, I'm already seeing clients of mine

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<v Speaker 1>who are going and putting offers in and the and

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<v Speaker 1>they're getting bit out by all cash buyers. And so

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<v Speaker 1>in that environment, you've got to slow it down. But

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<v Speaker 1>at the same point, that's gonna that's going to definitely

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<v Speaker 1>have an effect on the real estate and you're gonna

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<v Speaker 1>see that prices will have to go down because my

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<v Speaker 1>clients are buying homes based upon their cash in cash

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<v Speaker 1>out every single month, and that's how many Americans buy home.

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<v Speaker 1>It's based upon what they could afford. If you're raising

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<v Speaker 1>rates double what it was a year ago, that's going

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<v Speaker 1>to have to affect the price of real estate. I

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<v Speaker 1>was the only one freaked out by the Bulleard story.

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<v Speaker 1>Everyone's taking it so calmly today, I know, look at

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<v Speaker 1>the market. Uh all right, so, um, Mark, what do

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<v Speaker 1>you think about this housing market? I mean, we were

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<v Speaker 1>talking with an MBS specialist previously. You said nobody's worried

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<v Speaker 1>about a return of two thousand seven, two thousand eight,

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<v Speaker 1>And it's true. I haven't heard a lot of people

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<v Speaker 1>voice concerns about it, but we've had prices go so

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<v Speaker 1>far up so fast. It's it's gotta be people are

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<v Speaker 1>stretching to buy the houses that they are. Yeah. Yeah,

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<v Speaker 1>the housing market right now is going to be a

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<v Speaker 1>conundrum for anyone and for anyone to guess office is

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<v Speaker 1>all going to play out. You know, you really do

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<v Speaker 1>need a crystal ball. Um what what what? What's happening

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<v Speaker 1>right now is you're seeing some of the lowest inventory

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<v Speaker 1>in the last forty years in housing. Um, you're seeing

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<v Speaker 1>rates still historically at all time lows. I mean, people

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<v Speaker 1>are talking about rates going up, but my mom bought

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<v Speaker 1>a more had a house in her rate was nine

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<v Speaker 1>and a half. So when you're you're talking about right now,

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<v Speaker 1>if you've got an the asset to the bank, you're

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<v Speaker 1>looking at still right now four percent rates still not

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<v Speaker 1>horrible complaints and historical averages. And so you've got a

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<v Speaker 1>lot of demanders, more cash in Americans pockets than ever

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<v Speaker 1>in American history. Ever, that's an underlying that's not a

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<v Speaker 1>ten year, twenty years than ever, and that's because a

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<v Speaker 1>lot of people were locked down for two years, stays

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<v Speaker 1>up a ton of money, UM, didn't lose their jobs,

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<v Speaker 1>stayed at home. You know, watch Netflix, And now they're

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<v Speaker 1>coming out and they're saying, Okay, we want to buy

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<v Speaker 1>a home because we were a flush. And so that

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<v Speaker 1>is the environment. You're seeing low inventory, folks that have

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<v Speaker 1>a ton of cash and so right now, that's keeping

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<v Speaker 1>the markets up. But I do think that if rates

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<v Speaker 1>start to be effected and you're seeing a race right

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<v Speaker 1>now five plus on a thirty year fixed mortgage, Okay,

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<v Speaker 1>if that continues to go up into the sixes and sevens,

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<v Speaker 1>you've got a completely different UH consumer was going out

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<v Speaker 1>there and saying, wait, maybe I can't afford is three

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<v Speaker 1>million dollar home UM when rates are double what they

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<v Speaker 1>were a year ago. Good stuff, Hey, Mark, thanks so

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<v Speaker 1>much for joining us. Always appreciate getting your perspective. Mark Smith,

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<v Speaker 1>he's a seen your vice president for investments at Wells

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<v Speaker 1>Fargo Advisers. Before that, he spent fourteen years at UBS

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<v Speaker 1>UH in a similar role, so lots of experience. They're

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<v Speaker 1>giving us his thoughts on UH investments and financial markets. Right.

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<v Speaker 1>Matt Miller and I are in the office every day

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<v Speaker 1>because that's how it works in radio and TV here

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<v Speaker 1>at Bloomberg. But we are certainly the exception here and

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<v Speaker 1>I think companies across the border globally are thinking about

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<v Speaker 1>what the new work environment means. Are we coming back

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<v Speaker 1>five days a week? Mark Dixon, founder and CEO of

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<v Speaker 1>i w G formerly Regius. So those are the folks

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<v Speaker 1>that rent out office space. Presumably these guys are great

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<v Speaker 1>position to kind of meet the changing needs of business. Mark,

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<v Speaker 1>thanks so much for joining us here. Um, give us

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<v Speaker 1>a sense of what you're hearing from your clients, your

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<v Speaker 1>customers about the new work environment. Yeah, we'll look. Essentially,

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<v Speaker 1>we are the market leader globally and providing for this

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<v Speaker 1>new way of companies working, which is not much less

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<v Speaker 1>space on a fixed basis I long term leases and

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<v Speaker 1>companies that want to use space in a much more

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<v Speaker 1>fluid way. They want to take it when they need

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<v Speaker 1>it and take it more importantly where they need it.

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<v Speaker 1>So we're seeing a lot of companies changing. We're seeing

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<v Speaker 1>a huge uptick in in particularly larger corporations that are

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<v Speaker 1>moving to hybrid work and becoming our customers and using

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<v Speaker 1>space across the country rather than having space sort of

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<v Speaker 1>concentrated in individual cities. So I mean, as more people

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<v Speaker 1>work from home, I would expect companies to need less space.

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<v Speaker 1>On the other hand, just anecdotally when we talked to managers,

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<v Speaker 1>it seems like for some reason they're getting there, They're

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<v Speaker 1>they're leasing more space. Why is it? What's what's a

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<v Speaker 1>hybrid workspace look like? Well, a hybrid workspaces then we

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<v Speaker 1>answer that question personally, I come to the sort of

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<v Speaker 1>misinformation that's out there in a in a in a second,

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<v Speaker 1>but hyprid workspaces space that's already set up, ready to work.

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<v Speaker 1>It's officers that all built, all the services are there.

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<v Speaker 1>They're already staffed with support staff. You can use them

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<v Speaker 1>for an hour a day, a month, a week. And

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<v Speaker 1>they're all over the country. We're in in the United States,

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<v Speaker 1>were in about eleven hundred over eleven hundred locations throughout

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<v Speaker 1>the country. UM, and we're opening lots more because this

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<v Speaker 1>huge demand for this work locally. Mantra. It's not necessarily

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<v Speaker 1>people working from home. It's people that don't want to

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<v Speaker 1>waste an hour two hours a day commuting. They want

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<v Speaker 1>to work down the road. Some of them work from home.

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<v Speaker 1>A lot of them will want to work locally. So

0:13:00.320 --> 0:13:04.559
<v Speaker 1>UM when you know there's a lot of common commentators

0:13:04.559 --> 0:13:08.920
<v Speaker 1>talking about, yes, there's a lot of space being leased up,

0:13:09.600 --> 0:13:14.480
<v Speaker 1>that's not true. UM research out by Jones Lane this

0:13:14.559 --> 0:13:19.440
<v Speaker 1>week that talked about the Great Leak lease resignation, where

0:13:20.080 --> 0:13:24.000
<v Speaker 1>you've got people giving up leases on an unprecedented basis

0:13:24.760 --> 0:13:28.360
<v Speaker 1>and and this is long term leases they're giving up

0:13:28.920 --> 0:13:32.040
<v Speaker 1>in order to either have people work from home or

0:13:32.120 --> 0:13:35.200
<v Speaker 1>have people work locally. They are finding it difficult to

0:13:35.240 --> 0:13:40.199
<v Speaker 1>persuade people to spend time and money commuting when it's

0:13:40.280 --> 0:13:44.600
<v Speaker 1>unnecessary in a digital world. But it could be homework,

0:13:44.880 --> 0:13:47.760
<v Speaker 1>but for most it is local work that is what

0:13:47.800 --> 0:13:52.520
<v Speaker 1>they're looking for. Mark, are you sensing UM regional differences

0:13:52.600 --> 0:13:55.480
<v Speaker 1>for examples? Is the United States more of a hybrid

0:13:55.480 --> 0:14:00.280
<v Speaker 1>model than say Europe or the UK? Well, i'd the

0:14:00.400 --> 0:14:03.240
<v Speaker 1>US is much more. It's much more of a higher

0:14:03.240 --> 0:14:07.600
<v Speaker 1>adoption model. And what we know, we've been in business

0:14:07.600 --> 0:14:11.800
<v Speaker 1>in those states for thirty years. The US is really

0:14:11.840 --> 0:14:16.280
<v Speaker 1>at the forefront of adopting new practices. If something works,

0:14:17.040 --> 0:14:20.600
<v Speaker 1>US companies adopt it, and this one is one that works.

0:14:20.840 --> 0:14:25.680
<v Speaker 1>It saves companies money, it's what their workers want, and

0:14:25.880 --> 0:14:28.560
<v Speaker 1>it's good for the environment. It takes those three boxes

0:14:29.240 --> 0:14:33.400
<v Speaker 1>um and and and therefore companies are adopting it on

0:14:33.600 --> 0:14:37.920
<v Speaker 1>mass um. In the United States, they're much quicker to move.

0:14:38.720 --> 0:14:43.880
<v Speaker 1>In Europe you get more traditional. Some countries that are

0:14:43.960 --> 0:14:47.360
<v Speaker 1>much more traditional much less likely to move. And clearly

0:14:47.840 --> 0:14:51.360
<v Speaker 1>countries like the UK you mentioned, leases are much longer

0:14:51.400 --> 0:14:54.280
<v Speaker 1>in the UK. Therefore, companies, you know, in order to

0:14:54.320 --> 0:14:56.080
<v Speaker 1>move to hybrid, they've got to be able to give

0:14:56.200 --> 0:14:58.760
<v Speaker 1>up the space they already have. They need a lease

0:14:59.400 --> 0:15:03.120
<v Speaker 1>end at least termination that they can do. Um and

0:15:03.480 --> 0:15:06.360
<v Speaker 1>So the movie is slower in the UK, faster in Europe,

0:15:06.840 --> 0:15:10.560
<v Speaker 1>very fast in the US. What about mark the technology.

0:15:10.640 --> 0:15:15.480
<v Speaker 1>I've noticed that since we started this whole journey about

0:15:15.520 --> 0:15:18.400
<v Speaker 1>two and a half years ago, we have used very

0:15:18.400 --> 0:15:22.680
<v Speaker 1>different technology or there's been at least one big change

0:15:22.760 --> 0:15:26.000
<v Speaker 1>in terms of our providers at this company. Are are

0:15:26.080 --> 0:15:30.080
<v Speaker 1>you do you see technology is changing rapidly? Do companies

0:15:30.160 --> 0:15:32.880
<v Speaker 1>need to quickly adapt to keep up and spend to

0:15:32.960 --> 0:15:36.440
<v Speaker 1>keep up with new technologies? The answer to that is

0:15:36.480 --> 0:15:39.800
<v Speaker 1>absolutely they do and they are. I mean, this is

0:15:40.240 --> 0:15:45.080
<v Speaker 1>relatively cheap technology. It's mostly streaming technology. So look, you

0:15:45.280 --> 0:15:49.120
<v Speaker 1>just look at the two most commonly used platforms Microsoft

0:15:49.120 --> 0:15:54.040
<v Speaker 1>Teams and Zoom. They have hugely improved. They're offer the

0:15:54.120 --> 0:15:59.000
<v Speaker 1>quality of service that's available today and the functionality available

0:15:59.040 --> 0:16:02.120
<v Speaker 1>today is nothing like you would have found even six

0:16:02.200 --> 0:16:05.160
<v Speaker 1>months ago. UM and that, and there's lots of other

0:16:05.520 --> 0:16:10.080
<v Speaker 1>software platforms that allow better management of people that are

0:16:10.120 --> 0:16:13.280
<v Speaker 1>working in a decentralized way. So you know, your people

0:16:13.280 --> 0:16:15.360
<v Speaker 1>could be all over the country, all over the world,

0:16:15.800 --> 0:16:19.840
<v Speaker 1>you can manage their output's better with new technology basically

0:16:19.880 --> 0:16:24.160
<v Speaker 1>new software. All of that's coming together to make this

0:16:24.280 --> 0:16:29.200
<v Speaker 1>hybrid way of working something that's absolutely mainstream and prime

0:16:29.320 --> 0:16:33.120
<v Speaker 1>for adoption. Yep, but it certainly appears to be the

0:16:33.160 --> 0:16:36.000
<v Speaker 1>new trend here. Mark Dixon, founder and CEO of i

0:16:36.440 --> 0:16:40.600
<v Speaker 1>W GPSC that's formerly Regius. You'll see those Regious offices

0:16:40.920 --> 0:16:48.800
<v Speaker 1>all over the US and the world. Travel stories that

0:16:48.920 --> 0:16:53.040
<v Speaker 1>perfect Seguius Tunking would say into our next guest, Alicia Kapor,

0:16:53.360 --> 0:16:57.400
<v Speaker 1>Senior industry manager for Similar Web, Alicia, we just heard

0:16:57.640 --> 0:17:00.960
<v Speaker 1>from a report about business travel still not back. So

0:17:01.240 --> 0:17:04.320
<v Speaker 1>I guess my understanding of the global travel business right

0:17:04.359 --> 0:17:08.440
<v Speaker 1>now is that leisure travel is close to being back

0:17:08.480 --> 0:17:11.199
<v Speaker 1>to pre pandemic levels. Maybe we'll get there this summer,

0:17:11.520 --> 0:17:14.760
<v Speaker 1>but business is not. What's your takeaway, how do you

0:17:14.800 --> 0:17:18.240
<v Speaker 1>think this is going to develop? Yes, the great analysis,

0:17:18.359 --> 0:17:21.720
<v Speaker 1>major travel is definitely picked up, and consumer demand is

0:17:21.920 --> 0:17:25.440
<v Speaker 1>very very high, especially given that we have so much

0:17:25.480 --> 0:17:28.800
<v Speaker 1>tense of demand. So many restrictions are lifting across the

0:17:28.880 --> 0:17:32.359
<v Speaker 1>board UM just recently the mass mandate being listed on

0:17:32.520 --> 0:17:37.480
<v Speaker 1>planes and public transportation. UM. With business travel, I think

0:17:37.680 --> 0:17:40.959
<v Speaker 1>many experts in the industry expected that there would be

0:17:41.040 --> 0:17:44.880
<v Speaker 1>a slower rebound, so the numbers that were mentioned earlier

0:17:44.960 --> 0:17:48.000
<v Speaker 1>don't surprise me. That being said, when you look at

0:17:48.040 --> 0:17:52.159
<v Speaker 1>traffic to the top business travel sites, so ex some

0:17:52.359 --> 0:17:55.719
<v Speaker 1>sites like concur and then just actual sites to facilitate

0:17:55.800 --> 0:18:00.960
<v Speaker 1>bookings for corporations, we're seeing a steady increase, especially over

0:18:01.160 --> 0:18:03.920
<v Speaker 1>the past few months. We're seeing that businesses are dipping

0:18:03.920 --> 0:18:08.520
<v Speaker 1>their toes back in UM. Anecdotally, I've been to a

0:18:08.520 --> 0:18:11.760
<v Speaker 1>few conferences. I know a bunch of my colleagues are

0:18:11.800 --> 0:18:15.240
<v Speaker 1>preparing to go to conferences both within the US and

0:18:15.280 --> 0:18:18.359
<v Speaker 1>outside as well. So I think that there is a

0:18:18.359 --> 0:18:21.800
<v Speaker 1>positive trajectory and when we get into three I do

0:18:21.960 --> 0:18:26.520
<v Speaker 1>expect to see recovery UM, hopefully full fred pledged recovery

0:18:26.560 --> 0:18:29.280
<v Speaker 1>for corporate travel, But at this point, I think we

0:18:29.359 --> 0:18:32.040
<v Speaker 1>just still need a little bit of time, especially with

0:18:32.080 --> 0:18:35.120
<v Speaker 1>the return to office. I think as that process comes

0:18:35.160 --> 0:18:40.000
<v Speaker 1>into play, and as most businesses bring people back to offices,

0:18:40.080 --> 0:18:43.639
<v Speaker 1>will see the return of corporate travel will probably seamlessly

0:18:43.680 --> 0:18:46.560
<v Speaker 1>follow that. But so you expect us to get back

0:18:46.600 --> 0:18:50.639
<v Speaker 1>to pre pandemic levels because my understanding was, you know,

0:18:50.640 --> 0:18:53.119
<v Speaker 1>a lot of business practices have changed for good. You

0:18:53.160 --> 0:18:55.840
<v Speaker 1>don't really need to travel as much as we had

0:18:55.960 --> 0:18:58.680
<v Speaker 1>been in the past. Yeah. I think that's been the

0:18:58.760 --> 0:19:01.720
<v Speaker 1>huge debate across the industry. I do expect us to

0:19:01.760 --> 0:19:05.159
<v Speaker 1>get back to pre pandemic levels. That being said, I

0:19:05.240 --> 0:19:07.840
<v Speaker 1>don't expect the nature of business travel to be the

0:19:07.920 --> 0:19:12.320
<v Speaker 1>same right the pre pandemic. For example, I was traveling

0:19:12.359 --> 0:19:15.000
<v Speaker 1>for almost every client meeting I had, right, I'd go

0:19:15.040 --> 0:19:19.680
<v Speaker 1>to Data Florida, Data Vegas, etcetera, etcetera. Now Zoom has

0:19:19.720 --> 0:19:23.320
<v Speaker 1>made that so much easier that in exchange, I think

0:19:23.359 --> 0:19:26.320
<v Speaker 1>what we're seeing is that corporations are putting a lot

0:19:26.359 --> 0:19:30.840
<v Speaker 1>more money into conferences, um to bringing maybe remote employees

0:19:30.920 --> 0:19:34.760
<v Speaker 1>to the office for a week span or a month span. Uh,

0:19:34.880 --> 0:19:37.600
<v Speaker 1>team retreats are going to be huge, So I think

0:19:37.640 --> 0:19:41.240
<v Speaker 1>that corporate travel itself will recover, but the nature of

0:19:41.280 --> 0:19:44.679
<v Speaker 1>corporate travel will be very different post pandemic than it

0:19:44.840 --> 0:19:47.840
<v Speaker 1>was pre pandemic. You know, at Licia, when we talked

0:19:47.880 --> 0:19:51.639
<v Speaker 1>to the you know, big hotel operators, maybe even the

0:19:51.680 --> 0:19:54.560
<v Speaker 1>hotel casino operators in Las Vegas, for example, one of

0:19:54.600 --> 0:19:57.280
<v Speaker 1>the areas that is key for their corporate business is

0:19:57.320 --> 0:20:00.119
<v Speaker 1>the conference business. I mean, you think about some big

0:20:00.160 --> 0:20:03.040
<v Speaker 1>hotel cousinos in Vegas. They have such huge conference space

0:20:03.080 --> 0:20:06.439
<v Speaker 1>out there, and I guess the question is, will that

0:20:06.560 --> 0:20:09.199
<v Speaker 1>conference business continue to be a driver for some of

0:20:09.200 --> 0:20:14.000
<v Speaker 1>these big destination markets. Yeah, I believe it will. I

0:20:14.040 --> 0:20:17.119
<v Speaker 1>think that conferences are going to be to have a

0:20:17.200 --> 0:20:19.800
<v Speaker 1>huge resurgence this year into next year. I mean we're

0:20:19.800 --> 0:20:22.680
<v Speaker 1>already seeing it across many different industries. I think people

0:20:22.720 --> 0:20:28.160
<v Speaker 1>are really dying for that in person um kind of networking, right.

0:20:28.200 --> 0:20:31.760
<v Speaker 1>So I think the more that we're able to convinced

0:20:31.800 --> 0:20:35.320
<v Speaker 1>consumers or convinced corporations that that is the safe bet

0:20:35.440 --> 0:20:38.080
<v Speaker 1>and that they can kind of send their employees to

0:20:38.119 --> 0:20:41.520
<v Speaker 1>a conference without worrying about other risks um, the better

0:20:41.520 --> 0:20:43.640
<v Speaker 1>off the industry will be. And I do believe that

0:20:44.000 --> 0:20:46.879
<v Speaker 1>a lot of those large conferences or large scale conferences

0:20:46.880 --> 0:20:49.919
<v Speaker 1>that we saw pre pandemic will return, UM, but that

0:20:50.000 --> 0:20:52.720
<v Speaker 1>timeline is just a little bit more uncertain with some

0:20:52.840 --> 0:20:57.080
<v Speaker 1>of the headwinds facing the industry. I'm excited for flying

0:20:57.119 --> 0:21:00.800
<v Speaker 1>to get more enjoyable. It's I mean, it's never been

0:21:01.359 --> 0:21:06.119
<v Speaker 1>an incredibly fantastic experience, certainly not if you're flying you know,

0:21:06.119 --> 0:21:13.080
<v Speaker 1>economy class. But recently I feel like, uh, it's it

0:21:13.200 --> 0:21:17.320
<v Speaker 1>seems like a lot of the airline personnel UM are

0:21:17.359 --> 0:21:21.240
<v Speaker 1>in a police role, right, always reminding you to put

0:21:21.280 --> 0:21:25.040
<v Speaker 1>your mask back on between SIPs and um, you know,

0:21:25.520 --> 0:21:30.240
<v Speaker 1>getting very defensive about any kind of criticism like anger management.

0:21:30.240 --> 0:21:33.800
<v Speaker 1>But in real life, is that going to change? You think?

0:21:33.880 --> 0:21:36.840
<v Speaker 1>Is our airline is gonna have to make flying an

0:21:36.920 --> 0:21:41.600
<v Speaker 1>enjoyable experience for us again. You know, that's a good question.

0:21:41.760 --> 0:21:44.760
<v Speaker 1>I think there's opinions on either side of the aisle

0:21:44.840 --> 0:21:48.040
<v Speaker 1>with regards to this topic as well. UM. I think

0:21:48.240 --> 0:21:52.360
<v Speaker 1>on one hand, especially as mass mandates are being listed,

0:21:52.920 --> 0:21:56.240
<v Speaker 1>as consumers are flying again, UM, and as airlines are

0:21:56.280 --> 0:22:00.600
<v Speaker 1>really kind of pushing for that business from the leisure sector, UM,

0:22:00.800 --> 0:22:04.160
<v Speaker 1>there will be considerations that certain airlines will most definitely

0:22:04.200 --> 0:22:07.439
<v Speaker 1>take to make sure that their consumers are happy. On

0:22:07.480 --> 0:22:10.720
<v Speaker 1>the flip side, I think that some airlines have kind

0:22:10.720 --> 0:22:14.720
<v Speaker 1>of used this time to maybe condense their operations. UM.

0:22:14.760 --> 0:22:18.280
<v Speaker 1>We are seeing some mergers across the industry, and I

0:22:18.320 --> 0:22:21.920
<v Speaker 1>think that at the end of the day, UM, I

0:22:21.960 --> 0:22:24.080
<v Speaker 1>don't necessarily know if I have that crystal ball that

0:22:24.160 --> 0:22:25.840
<v Speaker 1>can tell you what flying will look like in the

0:22:25.880 --> 0:22:28.600
<v Speaker 1>next five to ten years. I think that flying will

0:22:28.640 --> 0:22:30.879
<v Speaker 1>be a lot more sustainable. You we've already seen a

0:22:30.880 --> 0:22:34.000
<v Speaker 1>lot of efforts from major airlines to really put a

0:22:34.080 --> 0:22:37.680
<v Speaker 1>lot of kind of thought and work into their sustainability pages. UM.

0:22:37.880 --> 0:22:40.800
<v Speaker 1>And then we're seeing, for example, on Google Flights there's

0:22:40.880 --> 0:22:44.320
<v Speaker 1>the carbon emissions feature which shows you, Okay, this Ryanair

0:22:44.400 --> 0:22:48.000
<v Speaker 1>flight for example, might have less or more carbon emissions,

0:22:48.040 --> 0:22:50.480
<v Speaker 1>and this easy Jet flight UM if you're in Europe.

0:22:50.840 --> 0:22:53.200
<v Speaker 1>But at the end of the day, I think the

0:22:53.200 --> 0:22:57.000
<v Speaker 1>the industry itself UM is really just focused on recovery

0:22:57.000 --> 0:22:59.600
<v Speaker 1>at the moment, and some of those some of those

0:22:59.640 --> 0:23:02.719
<v Speaker 1>perks that may come from for consumers UM or that

0:23:02.760 --> 0:23:05.480
<v Speaker 1>may have happened during the pandemic may not be as

0:23:05.480 --> 0:23:08.640
<v Speaker 1>common UM as we go forward. All right, Alicia, thank

0:23:08.640 --> 0:23:10.880
<v Speaker 1>you so much. For sharing your thoughts. Alicia Kapoor, Senior

0:23:10.880 --> 0:23:15.639
<v Speaker 1>industry manager for Similar Web joining us. Thanks for listening

0:23:15.680 --> 0:23:19.200
<v Speaker 1>to the Bloomberg Markets podcast. You can subscribe and listen

0:23:19.200 --> 0:23:23.480
<v Speaker 1>to interviews with Apple Podcasts or whatever podcast platform you prefer.

0:23:23.880 --> 0:23:27.840
<v Speaker 1>I'm Matt Miller. I'm on Twitter at Matt Miller three.

0:23:28.240 --> 0:23:30.760
<v Speaker 1>Put on false Sweeney I'm on Twitter at pt Sweeney

0:23:30.800 --> 0:23:33.439
<v Speaker 1>before the podcast. You can always catch us worldwide at

0:23:33.480 --> 0:23:34.240
<v Speaker 1>Bloomberg Radio