Speaker 1: Broadcasting live to New York, Bloomberg eleven to Washington, d C,
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Speaker 1: This is taking stock. Do you know what the biggest
Speaker 1: unknown for hotel reads here in the United States is now?
Speaker 1: According to our guests coming up on taking Stock, it's
Speaker 1: inbound international travel implications inbound into the US that is
Speaker 1: following the Brexit vote. I'm Kathleen Hayes, my co host
Speaker 1: Pim Fox on vacation this week, and I'm sure he
Speaker 1: loves travel. He's very sorry. I'm sure that he's missing
Speaker 1: David Loebs, senior hotel industry research channelist from Robert W.
Speaker 1: Baird and Co. In Milwaukee. David was also going to
Speaker 1: talk to us about summer travel what that means for
Speaker 1: some of the big reads and hotel chains. Let's get
Speaker 1: to Catherine Cowdrie now she's in the Bloomberg newsroom with
Speaker 1: a Bloomberg business flash. Thank you, Kathleen and Bloomberg. Taking
Speaker 1: Zoc is brought to you by National realty providers have
Speaker 1: one satisfaction guaranteed New York City Realty Investments see them
Speaker 1: at n r I a dot net. This stock market
Speaker 1: is climbing for the first time since Britain voted to
Speaker 1: withdraw from the European Union. There's speculation that policymakers will
Speaker 1: take steps to limit any economic fallout. Investors are also
Speaker 1: encouraged by some US data. Consumer confidence improved in June.
Speaker 1: Bloomberg's Annydale Jude Ice has the details. The Conference Board's
Speaker 1: Consumer Confidence INEX advanced to this month, the highest since October.
Speaker 1: Americans were more confident about current economic conditions as well
Speaker 1: as the months ahead. Separately, revised government data show GDP
Speaker 1: expanded at a one point one percent annual rate in
Speaker 1: the first quarter, the weakest showing in a year. April
Speaker 1: home prices meantime rose five point four percent year over year.
Speaker 1: According to S and P. K. Schiller at the Bloomberg
Speaker 1: First Word Desk Judici Sploomberg Radio, we check the markets
Speaker 1: every fifteen minutes throughout the trading day. Down industrial averages
Speaker 1: up two hundred twenty points one point three percent. Trading
Speaker 1: at seventeen thousand, three hundred sixty SMP five fundered up
Speaker 1: thirty points one and a half percent, trading at two
Speaker 1: thousand thirty Then as Zack is higher by eighty six
Speaker 1: points one point nine percent, trading at forty six eighty less.
Speaker 1: Texas intermediate crude oil of a dollar fifty five of
Speaker 1: barrel three point three percent to forty seven eighty eight
Speaker 1: spickled down six dollars ninety cents. Again's at thirteen seventeen
Speaker 1: eighty ten year treasury down four thirty seconds with the
Speaker 1: yield of one point four five percent. It's three thirty
Speaker 1: two on Well Street. Let's get an update if some
Speaker 1: of the other stories were following today right here on
Speaker 1: Bloomberg Radio. Thank you, Catherine from the Bloomberg Newsroom. I'm
Speaker 1: Jill Schneider. This news update is brought to you by
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Speaker 1: your local Jeep dealer today. Speaking during a campaign stop
Speaker 1: in Denver today, presumptive Democratic presidential nominee Hillary Clinton commented
Speaker 1: on the House Republican's final report on the two thousand
Speaker 1: twelve Benghazi attacks. No one has thought more about or
Speaker 1: lost more sleep over the lives that we lost the
Speaker 1: four Americans, which was devastating. Clinton also said it's clear
Speaker 1: that it's time to move on. Giving an economic address
Speaker 1: in Moness in Pennsylvania today, likely Republican presidential nominee Donald
Speaker 1: Trump said the American dream will be possible for more
Speaker 1: people once he is in the White House. You to
Speaker 1: imagine a much better life and a life where you
Speaker 1: can believe in the American dream again. Right now, you
Speaker 1: can't do that. Trump also accused Hillary Clinton of killing
Speaker 1: American jobs through deals she made during her time as
Speaker 1: Secretary of State. People who want to apply for the
Speaker 1: t s AS pre check program may soon have an
Speaker 1: easier time of it. The agency is opening three temporary
Speaker 1: enrollment centers at penn Station and at hotels near JFK
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Speaker 1: Global News twenty four hours a day, powered by more
Speaker 1: than twenty d journalists and analysts in more than one
Speaker 1: hundred twenty countries from the Bloomberg Newsroom I'm Jill Schneider
Speaker 1: and this is Bloomberg. Catherine, thank you, and we're getting
Speaker 1: news of two explosions taking place at Istanbul's International Auditurk Airport.
Speaker 1: That's according to Turkey's Interior Ministry. The ministry says a
Speaker 1: number of people were injured. They're still not sure what
Speaker 1: cause the explosions. That's not immediately clear. And I witness
Speaker 1: told CNN Turk Television that the blast took place shortly
Speaker 1: after gunfire between police officers and unknown people near the
Speaker 1: airports car park. And we will have more details as
Speaker 1: they become available. That's a Bloomberg Business flash. This is
Speaker 1: taking stock with pin Box and Katholeenks on Bloomberg Radio.
Speaker 1: It's far too earlier, earlier to talk about the dust
Speaker 1: settling after the political earthquake caused by the UK's vote
Speaker 1: to leave the European Union, but already people are saying
Speaker 1: that there are important industries and companies that will be affected.
Speaker 1: David loebe joins US now. He's senior hotel industry research
Speaker 1: analyst at Robert W. Baard and Co. In Milwaukee. He
Speaker 1: covers hotel rates and he says there could be some
Speaker 1: very powerful effects fallout on these rates after this big
Speaker 1: Brexit vote. David, welcome to the show. Thank you glad
Speaker 1: to be here. So hotel rates are going to suffer.
Speaker 1: Why because there will be too many people working on
Speaker 1: the Brexit and what it's going to mean. Because the
Speaker 1: city of London will be hurt, and the kind of
Speaker 1: people with the money in their could just hop in
Speaker 1: a plane and go on a business trip or even
Speaker 1: a vacation are not going to be doing it. I
Speaker 1: think the biggest impact on the hotel industry, both on
Speaker 1: the hotel brands and on the hotel roots, will be
Speaker 1: because of the changes in the value of currency. So
Speaker 1: if you look at the drop in the pound for
Speaker 1: UK travelers looking to vacation in New York or come
Speaker 1: on a business trip to anywhere in the US, it's
Speaker 1: much more expensive today than it was last Thursday. That
Speaker 1: I think is the biggest direct impact. I think we
Speaker 1: will also see secondary impacts with businesses cutting back on
Speaker 1: on what are essentially the easiest variable expense to cut,
Speaker 1: which is business travel, until they understand the economic implications
Speaker 1: of this boat, what the timeline is likely to be,
Speaker 1: and how it may directly impact their business. So give
Speaker 1: us give us even you know, hold that thumb up
Speaker 1: screen your eye, just even some rough sense of how
Speaker 1: much travel from Europe or even more broadly around the world.
Speaker 1: Because again, if I'm a business I could have an
Speaker 1: office in Shanghai, same thing. I could still feel like,
Speaker 1: I gotta wonder what's going to happen with the Brexit,
Speaker 1: what it's going to do in my company? How much?
Speaker 1: How much is that a part of how the reds
Speaker 1: and the hotels that are in those reds are are
Speaker 1: doing business with these important parts of the world. Well,
Speaker 1: I think you're you're absolutely onto something here. We live
Speaker 1: in a global world, and there's a lot of travel
Speaker 1: from all regions of the world to all other regions
Speaker 1: of the world in the in the US, it's not
Speaker 1: just inbound travel from the UK or from the EU.
Speaker 1: It's traveled from everywhere and within the US. So I
Speaker 1: think businesses that are are focused on global markets are
Speaker 1: reassessing or pulling back, are stalling their decisions. That doesn't
Speaker 1: mean I'm calling for a downturn in demand. We've already
Speaker 1: seen a slowdown in demand for hotels, but I think
Speaker 1: it will take a while before we see exactly how
Speaker 1: this how this plays out. But I think there will
Speaker 1: be there will be domestic implications as as companies look
Speaker 1: what this means to their business, and as they slow
Speaker 1: down and reassess, they will send fewer people on the road,
Speaker 1: whether that's going from Cleveland to Washington, d C. Or
Speaker 1: from Paris to New York, and those those cuts will
Speaker 1: have some impact on the industry. I just have to
Speaker 1: ask you slow down in demand. Uh the shutting down
Speaker 1: the Waldorf Historia and I'll granted an older hotel, but uh,
Speaker 1: you know, gosh, just one of those look at books,
Speaker 1: look at movies. The Waldor is such a big part
Speaker 1: of New York City, Manhattan a condo rebuild? Uh is this?
Speaker 1: Are they a hotel that was out of step with
Speaker 1: the times? Or why didn't somebody step up to say no, no, no,
Speaker 1: I'll buy it. Maybe I get a better deal. I mean,
Speaker 1: I get it a little bit cheap and and fix
Speaker 1: it up and restore to its gloria and make a
Speaker 1: lot of money. The Waldorf is an iconic hotel, There's
Speaker 1: no question. It also sits on a full square block
Speaker 1: on Park Avenue right near Grand Central Station, a fantastic location,
Speaker 1: and I think the opportunity for the owner to put
Speaker 1: condominiums into that building is just so much that it
Speaker 1: offsets the fact that that it's such an iconic hotel.
Speaker 1: It will come back as a hotel just as a
Speaker 1: much smaller hotel, perhaps five or six hundred rooms, less
Speaker 1: than half of what it was before. So uh, it's interesting.
Speaker 1: That's that's the supply side of the equation, and New
Speaker 1: York has seen a lot of new rooms and taking
Speaker 1: some rooms out for three years and then permanently for
Speaker 1: more than half of those rooms will certainly have a
Speaker 1: slight positive impact on that market. But I think the
Speaker 1: remaining rooms will be more representative of the iconic stature
Speaker 1: of that hotel than a lot of the rooms that
Speaker 1: are exist today in that building. Okay, in a nutshell,
Speaker 1: final question, summer travel, what are you seeing? What's important
Speaker 1: of you? Already seen a bit of a slowdown on demand.
Speaker 1: What's gonna happen this summer? Well, leisure travel is a
Speaker 1: real bright spot, and the second bright spot has been grouped,
Speaker 1: although even group is showing some signs of of corporate cutback.
Speaker 1: So I think your your news broadcast mentioned this crushed
Speaker 1: to join the t s A pre check program. Airports
Speaker 1: are busies, busy, airlines are busy. I think hotels that
Speaker 1: cater to leisure travelers will be very busy this summer.
Speaker 1: Group activity is looking actually very strong this summer. The
Speaker 1: big wild card that on that is corporate transient travel,
Speaker 1: and I think that will be a little bit slower.
Speaker 1: So net and now we may be flatish or slightly
Speaker 1: up this summer in terms of hotel occupancy, but I
Speaker 1: think particularly at national parks and tourist sites. All right,
Speaker 1: thanks so much to David Loeb, but senior hotel industry
Speaker 1: research analyst at Robert W. Baird and Co. He's based
Speaker 1: in Milwaukee. He says that there could be a reduction
Speaker 1: in inbound foreign travel to the United States a lot,
Speaker 1: because you know what your currency tanks. That makes it
Speaker 1: a lot more expensive to buy a plane ticket. I'm
Speaker 1: Caffeine Hayes, and this is taking Stock on Blum Radio.
Speaker 1: Coming up on taking Stock Peter Cheer from Brain Capital.
Speaker 1: He's going to tell us why he thinks maybe the
Speaker 1: worst outcome from the Brexit vote is what could be
Speaker 1: facing the stock market.