WEBVTT - Bloomberg Businessweek Weekend-June 27th, 2020 0:00:02.520 --> 0:00:06.560 This is Bloomberg Business Week from Bloomberg Radio. Hi, I'm 0:00:06.640 --> 0:00:09.120 Jason Kelly and I'm Carol Masser. Welcome to the weekend 0:00:09.200 --> 0:00:11.920 edition of Bloomberg Business Week. Over the next couple of hours, 0:00:12.200 --> 0:00:13.920 we're going to bring you some of the most important 0:00:13.960 --> 0:00:16.720 highlights from our daily radio show this week. And Jason, 0:00:16.760 --> 0:00:20.120 it was week fifteen. We welcomed officially the first day 0:00:20.120 --> 0:00:21.840 of summer to kick off our week, and then once 0:00:21.880 --> 0:00:24.840 again some very familiar themes weighing on the minds of 0:00:24.840 --> 0:00:27.480 investors and on the stock market this week, the virus, 0:00:27.640 --> 0:00:30.240 trade tensions, and we continue to talk with our guests 0:00:30.240 --> 0:00:32.920 about racism in the United States, how to stop just 0:00:33.000 --> 0:00:36.199 talking about it and to actually take action. Well, and 0:00:36.320 --> 0:00:39.120 when you think of the people you want to hear from, 0:00:39.159 --> 0:00:42.080 I dare say we had the top of the list 0:00:42.200 --> 0:00:46.040 this week. Lebron James my conversation, it's the cover story 0:00:46.120 --> 0:00:48.920 in this week's Business Week, how he and his longtime 0:00:48.960 --> 0:00:51.800 business partner Maverick Carter have been managing a moment in 0:00:51.960 --> 0:00:56.520 history like no other. We've always been in this position, 0:00:56.600 --> 0:01:00.400 We've always strived that we've always had to plan for 0:01:00.480 --> 0:01:04.399 this moment um is something that I've always Um had 0:01:04.440 --> 0:01:08.200 a passion about and that's you know, letting people know, 0:01:08.520 --> 0:01:12.120 having people to understand how important we are as um 0:01:12.280 --> 0:01:16.360 Black America, you know, and the powers and the creativity 0:01:16.880 --> 0:01:20.000 and the language and everything in the struggle that we've 0:01:20.000 --> 0:01:22.960 had for so long. And for me to have the 0:01:23.000 --> 0:01:26.720 brands that I have and having spring Hill and having 0:01:26.800 --> 0:01:30.720 Uninterrupted and now today having a nonprofit organization and we 0:01:30.800 --> 0:01:34.480 are more than a vote. It's allowing people to now 0:01:34.560 --> 0:01:37.480 really sense what we've been striving to do from the 0:01:37.600 --> 0:01:40.479 very beginning. So Um it's coming. You know. You always 0:01:40.480 --> 0:01:43.560 talk about timing, and I guess, I guess the timing 0:01:43.920 --> 0:01:46.640 is perfect for what we've always wanted people to understand 0:01:46.680 --> 0:01:48.200 what we're all about as a company and as a 0:01:48.240 --> 0:01:50.640 brand and as an individual. And Jason, We're gonna hear 0:01:50.680 --> 0:01:52.800 a lot more from Lebron a little bit later on 0:01:52.880 --> 0:01:56.320 in our broadcast. We'll also here from the president of 0:01:56.360 --> 0:02:00.320 the Center for Talent Innovation, Lenia Irvin. She is someone 0:02:00.320 --> 0:02:02.720 who has been such an advocate for diversity and inclusion, 0:02:02.760 --> 0:02:04.640 spent a long time on Wall Street as well, so 0:02:04.840 --> 0:02:08.480 another thoughtful chat with her. First up, Though we love 0:02:08.600 --> 0:02:11.000 tom Orlick, He's got a new book out. He's the 0:02:11.040 --> 0:02:15.600 chief economist for Bloomberg Economics and talk about timely. Oh 0:02:15.600 --> 0:02:18.440 my god, so timely Jason, And as an excerpt of 0:02:18.480 --> 0:02:21.200 that book in the magazine this week. His book it's 0:02:21.320 --> 0:02:24.720 entitled China, The Bubble That Never Pops. I spent eleven 0:02:24.800 --> 0:02:27.680 years in China, Carol. I moved there in two thousand 0:02:27.760 --> 0:02:31.560 and seven. I left in the summer eighteen when the 0:02:31.600 --> 0:02:34.640 trade war was heating up, and the sort of the 0:02:34.720 --> 0:02:39.640 consistent consensus, the kind of the prevailing view amongst foreign 0:02:39.639 --> 0:02:45.359 investors and economists and policymakers all that time was that, yes, 0:02:46.000 --> 0:02:49.480 it's impressive, they've got double digit growth, that you just wait, 0:02:49.880 --> 0:02:53.200 it's a bubble and it's going to implode. There's some 0:02:53.320 --> 0:02:56.840 kind of China crash coming um. And of course that 0:02:56.919 --> 0:03:00.359 crash never came. So the motivation of me is in 0:03:00.440 --> 0:03:03.800 putting pen to paper and writing this book was really 0:03:03.840 --> 0:03:06.400 to explore why why have we got it so wrong 0:03:06.440 --> 0:03:09.639 on China? What are the reasons for resilience, and how 0:03:09.680 --> 0:03:12.880 did that help us think about the future. So what 0:03:13.000 --> 0:03:16.160 was the biggest surprise to you? Because I know there 0:03:16.160 --> 0:03:18.840 are numerous answers, but what was the one? Where As 0:03:18.880 --> 0:03:22.200 you dug into this time you thought, wow, I either 0:03:22.440 --> 0:03:25.480 underestimated that as a reason or I just didn't think 0:03:25.480 --> 0:03:30.359 of it. So I think one important thing Jason was 0:03:30.480 --> 0:03:32.600 struck me as I was reading as I was writing 0:03:32.600 --> 0:03:35.240 it is there are lots of things that we think 0:03:35.360 --> 0:03:41.080 of as weaknesses in China which which actually strength UM 0:03:41.360 --> 0:03:44.840 when you consider them in the Chinese context. So a 0:03:44.920 --> 0:03:48.600 really important one is state control of the economy and 0:03:48.720 --> 0:03:52.280 state control of the financial system. So of course here 0:03:52.280 --> 0:03:55.600 in America, UM, we see the markets as a key 0:03:55.680 --> 0:03:59.640 driver of dynamism UM. And for an advanced economy, which 0:03:59.720 --> 0:04:02.560 is kind of push back the frontier, trying to innovate 0:04:03.080 --> 0:04:07.160 that market driven dynamism is really critically important UM. But 0:04:07.240 --> 0:04:09.720 that's not what China is trying to do. China is 0:04:09.720 --> 0:04:12.960 not trying to push back the technology frontier. China is 0:04:13.000 --> 0:04:15.560 trying to catch up. UM. And when you're trying to 0:04:15.600 --> 0:04:19.200 catch up, having a plan to catch up, having a 0:04:19.200 --> 0:04:22.520 bunch of businesses that will execute on that plan, a 0:04:22.560 --> 0:04:25.400 bunch of banks that will lend money to help the 0:04:25.400 --> 0:04:29.200 businesses execute on that plan can be really powerful and 0:04:29.360 --> 0:04:33.480 really important. I think that's a really important point because 0:04:34.480 --> 0:04:37.840 if you look at kind of the United States as 0:04:37.880 --> 0:04:42.560 a comparison. We often talked Tom about the inability for 0:04:42.640 --> 0:04:47.400 policy makers and you know, parties in power to actually 0:04:47.480 --> 0:04:50.920 think really really longer term, you know, in terms of 0:04:51.040 --> 0:04:53.320 things that need to be done in this country and 0:04:53.400 --> 0:04:59.119 create programs that will have economic market, country payoffs, citizen payoffs. 0:04:59.160 --> 0:05:00.960 But China can do do it right. They do those 0:05:01.000 --> 0:05:03.400 tenure plans and they just set out and do it. 0:05:03.520 --> 0:05:05.960 I mean, you know, not all the citizens may like 0:05:06.000 --> 0:05:08.960 what's coming, but nonetheless it's a long term plan and 0:05:09.000 --> 0:05:13.760 it creates dramatic changes in China. Yeah. I think that's 0:05:13.760 --> 0:05:16.240 absolutely right, Carol, Um. I mean, I want to be 0:05:16.279 --> 0:05:21.200 clear that I'm not advocating for the political system. I 0:05:21.240 --> 0:05:24.360 don't think there's many people here in the States who'd 0:05:24.360 --> 0:05:27.080 want to go to China to it to in to 0:05:27.160 --> 0:05:30.800 Injro the how things play out in that respect over there, Um. 0:05:30.880 --> 0:05:34.920 But in terms of economic planning, there's a really clear distinction. 0:05:35.240 --> 0:05:37.559 I remember being over there, there was this one moment, 0:05:37.920 --> 0:05:40.800 He's in my mind, there was this split screen moment 0:05:40.839 --> 0:05:44.440 of inbo television. Um. And on one side we had 0:05:44.600 --> 0:05:49.400 the US Congress, which was debating a bill to fund 0:05:49.480 --> 0:05:52.480 the government for one more day. And on the other 0:05:52.480 --> 0:05:55.479 screen we had Hijin Thing who was setting out of 0:05:55.560 --> 0:05:59.880 vision for China's economy and it was just such a 0:06:00.000 --> 0:06:03.760 stock contrast, right, I mean, can agree funding for a day, 0:06:04.360 --> 0:06:07.600 planning for the next thirty forty years. And that's Bloomberg 0:06:07.680 --> 0:06:11.200 Economics Chief economist Tom Orlick. Always loved catching up with 0:06:11.279 --> 0:06:13.800 him and talk about a man on the news here. 0:06:13.880 --> 0:06:17.040 I mean, this was a week where China it felt 0:06:17.040 --> 0:06:21.200 like Carol came back to the four in multiple iterations, 0:06:21.320 --> 0:06:24.160 some comments having to be walked back, and some real 0:06:24.279 --> 0:06:26.800 concerns around the world, not just about the virus but 0:06:26.880 --> 0:06:29.400 about trade. Right his book China The Bubble That Never 0:06:29.480 --> 0:06:32.360 Pops and bottom Line Jason from him, he says, one 0:06:32.440 --> 0:06:34.359 day there will be a day of reckoning for China. 0:06:34.440 --> 0:06:38.160 It will have ripple effects across the world. You're listening 0:06:38.200 --> 0:06:40.280 to Bloomberg Business Week coming up. It's been a big 0:06:40.320 --> 0:06:43.440 week for the Bloomberg invest Global Conference and China was 0:06:43.520 --> 0:06:45.719 front and center there as well, and a part of 0:06:45.760 --> 0:06:49.080 my conversation with Blackstone Chairman and CEO Steve Schwartzman that's 0:06:49.080 --> 0:07:03.840 coming up next. This is Bloomberg. This is Bloomberg Business Week, 0:07:03.920 --> 0:07:07.640 with Carol Masser and Jason Kelly from Bloomberg Radio. Well, 0:07:07.680 --> 0:07:09.479 today we're bringing you some of the most important, we hope, 0:07:09.480 --> 0:07:13.160 informative conversations we had on our daily Bloomberg Business Week 0:07:13.360 --> 0:07:16.160 radio show and beyond. We were all over the place, 0:07:16.200 --> 0:07:18.720 Carol virtually, Oh my god. We were at the Bloomberg 0:07:18.800 --> 0:07:22.280 invest Global Virtual Conference. As you said, Jason, this was 0:07:22.400 --> 0:07:25.680 three days around the world talking to the most important 0:07:25.720 --> 0:07:30.040 voices in the investment and financial community about what comes next. Well, 0:07:30.040 --> 0:07:32.160 and one of the big names speaking was one of 0:07:32.160 --> 0:07:35.679 the biggest in investing, talking about Steve Schwartzman, Blackstone Group 0:07:35.840 --> 0:07:39.440 co founder, chairman and CEO. Check out what he had 0:07:39.480 --> 0:07:44.680 to say. Well, this has been a pretty remarkable uh environment. 0:07:45.600 --> 0:07:49.920 Imagine uh uh you know, sort of around the last 0:07:50.000 --> 0:07:53.320 year end, if somebody told you that we were going 0:07:53.360 --> 0:07:58.960 to have the voluntary closing of the world's economy, who 0:07:59.000 --> 0:08:02.760 is certain except is to just keep food moving and 0:08:02.760 --> 0:08:06.640 other things, you would say something like that couldn't happen, 0:08:07.160 --> 0:08:12.840 and if it did, it would result in a global depression. Uh. 0:08:12.920 --> 0:08:18.360 And it just wasn't on the page. Uh. And in 0:08:18.440 --> 0:08:26.560 effect that those directions too almost every country to stop 0:08:26.600 --> 0:08:31.520 your economy did occur, and unemployment has gone up massively, 0:08:32.200 --> 0:08:35.720 but but we haven't had a depression. And the reason 0:08:35.800 --> 0:08:39.600 for that is that we've learned from the past, and 0:08:39.679 --> 0:08:45.120 you've had massive government intervention, massive transfers of trillions of 0:08:45.160 --> 0:08:48.640 dollars of money to people who needed to in effect 0:08:48.760 --> 0:08:54.480 replace the lost revenue from shutting our economies. And that 0:08:55.280 --> 0:09:00.760 first big stimulus bill in the United States, UH, followed 0:09:00.800 --> 0:09:08.359 by UH really very very large follow on by the 0:09:08.400 --> 0:09:12.560 Central Bank in the United States. The FED is pumping 0:09:13.240 --> 0:09:19.920 unprecedented peacetime moneys into economies, and in fact, the amount 0:09:19.920 --> 0:09:24.280 of deposits and banks because money was transferred to people 0:09:24.679 --> 0:09:30.120 has exploded. UH. And so we are awash with liquidity 0:09:30.280 --> 0:09:35.679 that was necessary to give you some idea, US GDPs 0:09:35.760 --> 0:09:40.120 around twenty one billion dollars to excuse me, trillion dollars 0:09:40.160 --> 0:09:45.000 a year, and say, well, miss a quarter or more so, 0:09:45.000 --> 0:09:48.920 so we're sort of missing six trillion coming in uh 0:09:49.000 --> 0:09:52.800 and and somebody's got to fill that hole. And that's 0:09:52.800 --> 0:09:55.920 what all these stimulus bills and the FED in effect, 0:09:55.920 --> 0:09:58.920 you're doing in a very simple way. And so we've 0:09:58.920 --> 0:10:05.320 had this dramatic collapse, stock markets down and now it's 0:10:05.400 --> 0:10:09.520 bounced up as if nothing had occurred because of the 0:10:09.559 --> 0:10:13.480 liquidity and support from the FED. And also so let 0:10:13.480 --> 0:10:16.880 me ask you about that. So, So, Steve, if I may, 0:10:17.240 --> 0:10:19.960 that specific point is one that I really feel like 0:10:20.000 --> 0:10:23.400 I want to understand from your perspective, which is this 0:10:23.559 --> 0:10:27.800 apparent disconnect with every headline that we're reading every day 0:10:27.920 --> 0:10:32.000 related to virus cases going up, this medical crisis, this 0:10:32.120 --> 0:10:35.120 health crisis that we're going through, and a stock market 0:10:35.320 --> 0:10:37.079 if I even just look at my own four oh 0:10:37.080 --> 0:10:41.880 one k that has rebounded. Is it just basically the 0:10:42.000 --> 0:10:45.520 liquidity that's been pumped into the system. Help me understand 0:10:45.559 --> 0:10:49.680 this gap. Yeah, I think it's mostly the liquidity that's 0:10:49.720 --> 0:10:55.480 in the system, and also some elements of confidence. In 0:10:55.520 --> 0:11:00.400 other words, you have a vaccines that are in the 0:11:00.440 --> 0:11:04.200 process of development. The fact that will go oh for 0:11:04.320 --> 0:11:10.600 one thirty really seems remote. There are three different types 0:11:10.640 --> 0:11:14.480 of vaccines, uh and and and so I think people 0:11:14.520 --> 0:11:18.600 are much more optimistic that that that's going to occur 0:11:18.720 --> 0:11:23.480 on a timeframe that's way different, uh than the development 0:11:23.520 --> 0:11:27.319 of vaccines was in the past, where the fastest one 0:11:27.480 --> 0:11:29.840 was like four and a half years, and people are 0:11:30.240 --> 0:11:34.760 have have have optimism that within the next nine months 0:11:35.400 --> 0:11:39.959 will have enough positive could be a year outcomes from 0:11:40.040 --> 0:11:43.880 trials that that you'll get there within a year to 0:11:44.000 --> 0:11:49.520 start really producing large scale vaccine. And there's other therapeutic 0:11:50.280 --> 0:11:56.000 breakthroughs that are occurring if you if you get the virus. 0:11:56.040 --> 0:11:59.880 The second thing I'd say about these cases going up, uh, 0:12:00.000 --> 0:12:04.880 how could one believe they wouldn't? Um, I don't find 0:12:04.960 --> 0:12:09.120 that surprising. People have been locked up in their homes 0:12:10.080 --> 0:12:13.280 for two to three months, and when you let them out, 0:12:13.360 --> 0:12:18.640 there'll be more socialization. Uh And and people won't understand 0:12:18.760 --> 0:12:22.679 truly that this can get them sick. Uh And once 0:12:22.760 --> 0:12:30.000 they see that, and the appropriate government response will be 0:12:30.080 --> 0:12:34.560 the first really warned people in democracies Apparently they like 0:12:34.720 --> 0:12:40.679 to see bad things happen before people in democracies actually respond. Uh. So, 0:12:41.240 --> 0:12:44.720 so I I completely expected this to happen. I think 0:12:44.720 --> 0:12:48.280 the markets did as well. Uh And and that will 0:12:48.360 --> 0:12:52.040 be put under better control because there's no option. Nobody 0:12:52.080 --> 0:12:55.680 really wants to get sick. Uh And so you'll you'll 0:12:55.720 --> 0:13:00.480 have change in behavior as as the number of cases 0:13:00.520 --> 0:13:04.839 goes up, and eventually that will be beaten down. But 0:13:04.840 --> 0:13:10.080 but I think it's it's you'll also see a big 0:13:10.360 --> 0:13:14.440 V in terms of the economy going up for the 0:13:14.480 --> 0:13:18.480 next few months because it's been closed and as people 0:13:18.600 --> 0:13:22.640 are allowed to go back, the economy will really respond 0:13:23.800 --> 0:13:28.480 a lot. But there's only so much the economy that's 0:13:28.640 --> 0:13:35.560 highly complex can respond, uh, just because not all things 0:13:36.040 --> 0:13:40.360 go up equally. Uh. And if it will take uh 0:13:40.679 --> 0:13:43.840 quite a while before we sync up and get back 0:13:44.679 --> 0:13:50.760 to levels. We've certainly been through a test. It's a 0:13:50.840 --> 0:13:55.520 test for society. Uh. You know, I I still find 0:13:55.559 --> 0:13:59.920 it astonishing that that that you managed to have the 0:14:00.120 --> 0:14:05.200 vast majority of people around the world sort of going 0:14:05.360 --> 0:14:09.840 to suspension for for two to three months, and so 0:14:09.920 --> 0:14:14.480 there's going to be all kinds of changes. That's Steve Schwartzman, chairman, 0:14:14.559 --> 0:14:17.120 CEO and co founder a Blackstone Group at the Bloomberg 0:14:17.200 --> 0:14:20.560 Live Invest Global Virtual event. What I loved about what 0:14:20.640 --> 0:14:22.440 he had to say, Jason and man, this was all 0:14:22.480 --> 0:14:25.600 over the Bloomberg terminal. He predicts a big V in 0:14:25.720 --> 0:14:28.120 terms of the economy going up for the next few 0:14:28.160 --> 0:14:30.560 months because he says it's been closed. But there's a 0:14:30.560 --> 0:14:32.880 lot of folks that say that's not going to happen. Well, 0:14:32.920 --> 0:14:35.120 and the market didn't seem to agree with him for 0:14:35.360 --> 0:14:37.720 much of the week, but it's hard to bet against 0:14:37.880 --> 0:14:40.480 Steve Schwartzman. You're listening to Bloomberg b this week coming up, 0:14:40.720 --> 0:14:45.000 as the world continues to reopen slowly and piecemeal, how 0:14:45.120 --> 0:14:49.200 travel is rebounding from the unprecedented effects that the pandemic 0:14:49.280 --> 0:14:51.960 has had. We'll hear from Kayak co founder Steve Haffner 0:14:52.120 --> 0:14:59.200 talk about a front row seat. This is Bloomberg. This 0:14:59.520 --> 0:15:02.680 is bloom Bird Business Week with Carol Masser and Jason 0:15:02.800 --> 0:15:05.560 Kelly from Bloomberg Radio. We're bringing you some of the 0:15:05.560 --> 0:15:08.320 most important and informative conversations that we have throughout the 0:15:08.360 --> 0:15:10.720 week on our daily radio show. And Jason, of course, 0:15:10.800 --> 0:15:13.000 all of this happening in real time as a lot 0:15:13.000 --> 0:15:16.240 of news was changing again around us. Lin, Carol, we 0:15:16.320 --> 0:15:19.960 know there's been some optimism, but a lot more pessimism 0:15:19.960 --> 0:15:22.520 when it comes to travel. So who better to catch 0:15:22.640 --> 0:15:26.160 up with than Kayak co founder and CEO Steve Hafner. 0:15:26.520 --> 0:15:30.440 He's this week's Business Week Talks. We published data on 0:15:30.560 --> 0:15:33.480 Kayak from about a billion consumer queries, and it's actually 0:15:33.520 --> 0:15:37.240 showing you that there is some recovery in travel interest. 0:15:37.280 --> 0:15:39.960 So the bottom period for for what we've seen in 0:15:40.000 --> 0:15:43.720 our querry volume was happened in April seven when queries 0:15:43.760 --> 0:15:46.520 fell year of a year, and since then they've been 0:15:46.560 --> 0:15:48.800 gradually recovering. So yesterday, if you look at the data, 0:15:49.680 --> 0:15:53.200 query volume was only down versus the previous year. So 0:15:53.320 --> 0:15:55.320 there's a long way to go to be sure, but 0:15:55.480 --> 0:15:58.280 consumers at least are thinking about flying again and they're 0:15:58.280 --> 0:16:01.680 looking for trips. Tell us about you know, okay, so 0:16:01.720 --> 0:16:04.280 some I mean percentage wise, can you give us an 0:16:04.280 --> 0:16:06.280 idea because I know we keep talking about these numbers 0:16:06.280 --> 0:16:09.160 and they're coming off of such significant loads. I mean 0:16:09.520 --> 0:16:12.920 it's still way down, correct, It's still way down. So yeah, 0:16:13.000 --> 0:16:15.160 last year there was twice as many people looking for 0:16:15.160 --> 0:16:18.200 flights on kayak and there are uh this year as 0:16:18.200 --> 0:16:22.040 of yesterday. But that's that's come up from down the 0:16:22.040 --> 0:16:24.040 first week of April, so it is a recovery. And 0:16:24.040 --> 0:16:27.080 remember this is search data, this isn't actually booking data. 0:16:27.320 --> 0:16:30.440 So that just means that people are thinking about traveling again, right, 0:16:31.000 --> 0:16:34.480 And I know that that is largely based on consumers. 0:16:34.520 --> 0:16:37.160 Talk to us about corporate travel because I think we're 0:16:37.160 --> 0:16:39.280 all trying to figure that out, not just again from 0:16:39.320 --> 0:16:42.480 a personal perspective from our own work, but you know, 0:16:42.480 --> 0:16:46.320 knowing and talking to a lot of other CEOs about 0:16:46.360 --> 0:16:49.600 the decisions they're making in terms of, you know, maybe 0:16:49.600 --> 0:16:52.000 we should video con, maybe we don't need to take 0:16:52.080 --> 0:16:54.160 quite as many trips. What's your read on that? I 0:16:54.200 --> 0:16:56.520 share those sentiments. You know you're talking to somebody used 0:16:56.560 --> 0:17:00.160 to travel on a plane almost every day. Yeah, it's 0:17:00.160 --> 0:17:02.560 been amazing boon to productivity not to have to do that. 0:17:02.800 --> 0:17:05.760 And I think this pandemics, you know, one of the 0:17:06.240 --> 0:17:09.320 few bright spots is it's taught people how to conduct 0:17:09.320 --> 0:17:14.000 their affairs, uh somewhat efficiently online. So typically, in past 0:17:14.040 --> 0:17:17.399 recessions and we're in one right now, business travel is 0:17:17.440 --> 0:17:19.720 one of the last things to return because companies are 0:17:19.800 --> 0:17:22.760 are really suffering, right So consumers still want to travel, 0:17:22.800 --> 0:17:25.680 but consumers, but consumers may have may be able to 0:17:25.680 --> 0:17:28.520 afford that in a way that the business um can't. 0:17:28.880 --> 0:17:31.360 So typically business is the last thing recover. I think 0:17:31.359 --> 0:17:33.760 it's gonna we're gonna see more the same now, and 0:17:33.800 --> 0:17:36.000 it may never fully recover back to the levels that 0:17:36.200 --> 0:17:39.040 that it once was because people have learned to adapt, 0:17:39.880 --> 0:17:42.680 so we may never see twenty nineteen levels again. We're 0:17:42.720 --> 0:17:46.359 preparing to see levels back in terms of total travel 0:17:46.400 --> 0:17:49.760 demand by about three That's kind of how we've structured 0:17:49.800 --> 0:17:53.640 our cost in our balance sheet. UM. But I think 0:17:54.000 --> 0:17:56.199 how people are traveling and what they're thinking about and 0:17:56.240 --> 0:17:58.560 how often they're going to travel are different. And that's 0:17:58.720 --> 0:18:02.920 a big implications for how airlines do their schedules because 0:18:02.920 --> 0:18:06.000 you've got to remember that the business traveler usually is 0:18:06.040 --> 0:18:08.840 paying half the revenue on one of those flights. So 0:18:08.880 --> 0:18:10.840 I think they will see the frequency of trips go down, 0:18:10.880 --> 0:18:12.679 and I think you'll see average fares go up to 0:18:12.840 --> 0:18:16.000 as business Talver is no longer subsidize, you know, the 0:18:16.000 --> 0:18:18.760 consumers of leisure travel. So what about on the open 0:18:18.800 --> 0:18:21.120 table side, what are you seeing in terms of restaurants. 0:18:21.400 --> 0:18:24.240 We're seeing recovery and restaurants as well. So people want 0:18:24.280 --> 0:18:25.920 to travel and they also want to dine out, and 0:18:26.160 --> 0:18:28.560 we're seeing a stronger recovery on on the restaurant side 0:18:28.560 --> 0:18:30.200 of the business half of you know, we've got about 0:18:30.200 --> 0:18:33.680 sixty thousand restaurants UM on the Open table platform, about 0:18:33.680 --> 0:18:36.600 half of them have reopened, which is great. And in 0:18:36.680 --> 0:18:39.960 terms of seated diners, UM, we we capture that data 0:18:39.960 --> 0:18:42.280 and we make it publicly available as well. Um that 0:18:42.359 --> 0:18:45.920 was down only about yesterday, So so people are going 0:18:45.920 --> 0:18:48.400 out and a seventy percent it sounds like a big reduction, 0:18:48.760 --> 0:18:51.399 but you have to remember that because of COVID nine 0:18:51.440 --> 0:18:55.720 team restrictions, most restaurants aren't operating at full capacity. A 0:18:55.800 --> 0:18:58.280 lot of them are only outdoor only where they have 0:18:58.359 --> 0:19:01.119 set up tents outside. Were even that they have to 0:19:01.119 --> 0:19:03.720 have their table space six ft apart. So a lot 0:19:03.760 --> 0:19:07.439 of them are you know, fifteen capacity, and you know 0:19:07.480 --> 0:19:11.040 they're they're they're selling every seat they can and every 0:19:11.080 --> 0:19:13.359 table they can, which is great news. It's not enough 0:19:13.400 --> 0:19:16.000 to keep them in business, find you, but but it 0:19:16.040 --> 0:19:17.840 does show that consumers want to get out of their houses. 0:19:17.920 --> 0:19:20.000 And to that point, I mean, I believe you guys 0:19:20.119 --> 0:19:23.800 had forecast and I think others have followed you in 0:19:23.960 --> 0:19:26.320 this regard that we could see a quarter of restaurants 0:19:26.320 --> 0:19:29.359 across the country go out of business. Does that still 0:19:29.440 --> 0:19:32.320 feel about right or what are you guys thinking now? 0:19:32.560 --> 0:19:35.760 That's still our best guests. Restaurants are tough business. They 0:19:35.800 --> 0:19:37.480 go out of business all the time, as as you 0:19:37.520 --> 0:19:40.040 well know. But usually what location goes under it's because 0:19:40.040 --> 0:19:42.359 the concept was bad. What the management was bad and 0:19:42.400 --> 0:19:44.880 a new restaurant takes his place. That's not what we're 0:19:44.920 --> 0:19:48.719 expecting now. So when we talk about restaurants going out 0:19:48.760 --> 0:19:51.719 of business, that means the location shutters permanently and becomes 0:19:51.720 --> 0:19:54.840 something else. And you know, it all depends on what 0:19:55.000 --> 0:19:58.640 happens with COVID nineteen and the restrictions, right, so can 0:19:58.680 --> 0:20:01.920 we safely dine out again and indoors? Will employees come 0:20:01.920 --> 0:20:05.360 back and start working in restaurants again versus collecting benefits 0:20:05.359 --> 0:20:08.280 were doing other types of work? So you know, well, 0:20:08.359 --> 0:20:11.119 we'll see what happens. But that's that's our prediction. And 0:20:11.160 --> 0:20:14.040 that's Kayak co founder and CEO Steve Haffner also the 0:20:14.119 --> 0:20:16.919 CEO of Open Tables, so he has a window in 0:20:17.040 --> 0:20:18.639 and Carol, I think one of the things that we 0:20:18.680 --> 0:20:21.639 really like, he's got the data. Oh my god, he does. Jason, 0:20:21.680 --> 0:20:24.160 and it's this week's Business Week Talks. It's in the magazine, 0:20:24.160 --> 0:20:27.639 it's in our podcast feed, it's online. What's interesting My takeaway. 0:20:27.680 --> 0:20:29.760 He says how they're doubling down on some of their 0:20:29.800 --> 0:20:32.879 business initiatives because of the impact of the virus. And 0:20:32.880 --> 0:20:36.640 he talked about grocery stores, universities and bars soon being 0:20:36.680 --> 0:20:40.960 able to use their apps. So definitely they are leveraging 0:20:41.040 --> 0:20:43.520 their platform trying to adapt to a changing world, that's 0:20:43.560 --> 0:20:45.679 for sure. You're listening to Bloomberg Business Week. Coming up, 0:20:45.840 --> 0:20:49.040 how w W, the company formerly known his Weight Watchers 0:20:49.160 --> 0:20:52.320 is pivoting amid our new world order. Our interview with 0:20:52.480 --> 0:20:56.399 WW International CEO Andy Grossman coming up next. This is 0:20:56.440 --> 0:21:04.000 Bloomberg Busines Bloomberg Business Week with Carol Messer and Jason 0:21:04.119 --> 0:21:07.160 Kelly from Bloomberg Radio. Well, today we're being you something 0:21:07.160 --> 0:21:10.120 the most important and we hope informative conversations we had 0:21:10.440 --> 0:21:13.880 on our daily Bloomberg Business Week radio show. Carol, Yeah, 0:21:13.960 --> 0:21:16.440 and one of those conversations, she's a friend of the show, Jason, 0:21:16.480 --> 0:21:18.000 You and I both have spent a lot of time 0:21:18.480 --> 0:21:22.080 talking with Mindy Grossman. She's a presidency of WW International, 0:21:22.480 --> 0:21:24.479 used to be known as weight Watchers, but she has 0:21:24.520 --> 0:21:29.399 been transforming that company thinking about wellness holistically. And I 0:21:29.480 --> 0:21:31.080 got to say that they've been going through a tough 0:21:31.160 --> 0:21:33.080 time because of the virus. They've had to cut costs, 0:21:33.119 --> 0:21:35.120 they've had to let go workers, they've had to shut 0:21:35.200 --> 0:21:37.840 down some of their outlets. We had a lot to 0:21:37.920 --> 0:21:41.040 talk about with Mindy Grossman. We entered the year with 0:21:41.640 --> 0:21:45.399 unbelievable momentum. You know, we had launched my WW We 0:21:46.200 --> 0:21:50.320 were in the throes of our digital transformation. We did 0:21:50.400 --> 0:21:54.560 a nine city tour with Oprah, touching you know, a 0:21:54.680 --> 0:21:59.200 hundred and thirty five thousand people, and you know, then 0:21:59.320 --> 0:22:02.320 all of a sudden in mid March, um the world 0:22:02.440 --> 0:22:06.680 changed and we had to quickly pivot um not only 0:22:06.840 --> 0:22:10.440 for the safety and security of our employees and our members, 0:22:11.119 --> 0:22:13.760 but it was important to us that we kept our 0:22:13.840 --> 0:22:18.800 community together because of our approximately five million members who 0:22:18.840 --> 0:22:23.280 are all digital. Per cent of them also attended our 0:22:23.400 --> 0:22:26.800 studios in March in six days, we had to train 0:22:26.960 --> 0:22:31.440 fourteen thousand coaches. We pivoted our whole products and tech team, 0:22:32.200 --> 0:22:37.440 and simultaneously, in twelve countries we launched virtual workshops, which 0:22:37.840 --> 0:22:40.520 in the first week we had fifteen thousand and they're 0:22:40.560 --> 0:22:45.920 still continuing today. And that pivot for us, even though 0:22:46.080 --> 0:22:51.960 we saw suppressed subscriptions starting in you know, mid March, 0:22:52.520 --> 0:22:56.880 that started really picking up again, uh, starting in mid April, 0:22:57.160 --> 0:23:00.520 and you know, now our digital subscribers are at an 0:23:00.600 --> 0:23:05.800 all time high, as is our retention. And it was 0:23:05.880 --> 0:23:10.399 our maniacal focus on not losing our community in a 0:23:10.600 --> 0:23:15.840 world where community and motivation and support are really more 0:23:16.080 --> 0:23:21.359 important than ever, just even psychologically for people. We also 0:23:21.680 --> 0:23:26.840 took the learnings from the tour we did physically with 0:23:27.040 --> 0:23:29.439 Oprah and said, what can we do for people who 0:23:29.520 --> 0:23:32.960 need this now more than ever? And we launched a 0:23:33.280 --> 0:23:39.160 four weeks every Saturday virtual tour with Oprah and made 0:23:39.240 --> 0:23:44.400 the decision to make it free globally for everyone because 0:23:44.480 --> 0:23:47.960 it's really what people needed right now, and that's what 0:23:48.400 --> 0:23:52.359 our brand has stood for since the very beginning. And 0:23:52.840 --> 0:23:55.119 we had just in the first one over half a 0:23:55.200 --> 0:23:58.960 million people live and we've now had millions of people 0:23:59.280 --> 0:24:02.879 watched the content. UM. So what we've been trying to 0:24:03.080 --> 0:24:08.080 do is use this as an opportunity to accelerate our 0:24:08.160 --> 0:24:14.000 digital transformation, UM, reduce our real estate, bookprint, be able 0:24:14.119 --> 0:24:19.399 to add, you know, to the ecosystem of wellness, and 0:24:20.080 --> 0:24:22.640