WEBVTT - Jobs Data Threatened as Businesses Avoid Surveys 0:00:01.320 --> 0:00:05.680 This is Bloomberg Business Week Inside from the reporters and 0:00:05.840 --> 0:00:09.400 editors who bring you America's most trusted business magazine, plus 0:00:09.480 --> 0:00:13.640 global business finance and tech news. The Bloomberg Business Week 0:00:13.680 --> 0:00:18.600 Podcast with Carol Masser and Tim stinebec from Bloomberg Radio. 0:00:19.760 --> 0:00:22.720 All right, we're going to stay with economic data. As 0:00:22.720 --> 0:00:27.720 the FED consistently reminds us, they we were all dependent 0:00:27.760 --> 0:00:29.800 when it comes to monetary policy. We just talked about 0:00:29.800 --> 0:00:32.720 this with Molly and its subsequent impact on the US economy, 0:00:32.760 --> 0:00:35.560 which leads us to concerns about some of the data 0:00:35.640 --> 0:00:39.040 being collected. Um, you know, when we think about it, Maddie, 0:00:39.120 --> 0:00:43.040 especially the really hot labor market, the really hot labor market, 0:00:43.080 --> 0:00:45.360 and the big question of whether or not the data 0:00:45.400 --> 0:00:48.800 that we're getting in is as accurate as it needs 0:00:48.840 --> 0:00:51.600 to be given the big decisions the FED is making 0:00:51.640 --> 0:00:54.200 based on that data. Yeah, it's crucial, right, So let's 0:00:54.240 --> 0:00:56.560 get to it with our Bloomberg News US Economy reporter 0:00:56.600 --> 0:00:59.680 read Picker. She joins us via zoom from Washington, d C. 0:00:59.800 --> 0:01:01.280 By the way, this is one of our most read 0:01:01.320 --> 0:01:03.800 stories on the Bloomberg It's also in the upcoming new 0:01:03.840 --> 0:01:07.160 issue of Bloomberg Business week, which is hitting newstands tomorrow, 0:01:07.160 --> 0:01:09.240 but it's already online and on the Bloomberg read. Good 0:01:09.280 --> 0:01:11.319 to have you here with Maddie and myself. So tell 0:01:11.360 --> 0:01:14.600 us about your story, because Labor, it's one of the 0:01:14.600 --> 0:01:17.040 FEDS you know, key missions here. But if the data 0:01:17.080 --> 0:01:19.080 is wrong, you make you know, you have to wonder 0:01:19.160 --> 0:01:22.600 do we get a policy mistake. I'm glad to be here. 0:01:22.760 --> 0:01:25.679 So basically, kind of the premise of the story is 0:01:25.760 --> 0:01:29.600 zooming in on this massive problem that is underlying a 0:01:29.600 --> 0:01:33.520 lot of the surveys that feed into these u S 0:01:33.560 --> 0:01:36.360 economics statistics that we really rely on, and it's that 0:01:37.000 --> 0:01:41.240 you learn fewer people and businesses are responding to these surveys, 0:01:41.280 --> 0:01:44.000 and so what you've ended up with is this years 0:01:44.080 --> 0:01:49.240 long decline in response rates UM that was then worsened 0:01:49.280 --> 0:01:51.960 by the pandemic. And so you know, when I was 0:01:52.000 --> 0:01:56.200 talking to current informer Census and BLS officials, you know, 0:01:56.240 --> 0:01:59.680 they really emphasized this idea that just because the response 0:01:59.760 --> 0:02:03.040 rate is declining doesn't necessarily mean the data is accurate. 0:02:03.280 --> 0:02:06.880 But what it does mean is that it introduces the 0:02:07.160 --> 0:02:10.720 higher potential of error essentially because you're having to do 0:02:10.880 --> 0:02:14.680 kind of more adjustment and the kind of perfect population, 0:02:14.960 --> 0:02:18.120 the perfect survey that you're you're trying to do is 0:02:18.120 --> 0:02:20.600 is getting harder and harder. Um. And so when we 0:02:20.639 --> 0:02:24.320 think about these rates, um, you've already really started to 0:02:24.360 --> 0:02:28.240 see how vast these response rates have declined. UM. I 0:02:28.240 --> 0:02:31.400 mean I think of something like, um, the Jolt survey, 0:02:31.600 --> 0:02:34.079 which is the job opening survey, which everyone looks at 0:02:34.200 --> 0:02:38.079 really closely. UM. And so if you looked back, for instance, 0:02:38.160 --> 0:02:43.000 say in the response rate for that survey was just 0:02:43.200 --> 0:02:47.000 under sevent which is pretty good, UM. But now if 0:02:47.000 --> 0:02:49.040 you look at that, it's less than half of that, 0:02:49.200 --> 0:02:53.480 it's less than So these are really kind of large 0:02:53.520 --> 0:02:57.680 deteriorations in these response rates, big big dropdowns there. Read. 0:02:57.760 --> 0:03:02.000 But I have to wonder whether these surveys were ever 0:03:02.320 --> 0:03:05.560 that accurate. When you're relying on a human to report 0:03:05.639 --> 0:03:09.280 their own, you know, views about something that is there 0:03:09.400 --> 0:03:11.240 always like that error. I mean we see this all 0:03:11.280 --> 0:03:13.840 the time in pulling when it comes to politics, Right, 0:03:14.080 --> 0:03:16.560 did did that idea come up at all? In your reporting? 0:03:17.639 --> 0:03:20.360 There's always some level margin of error to kind of 0:03:20.400 --> 0:03:22.160 any statistic. I mean, when we think about what a 0:03:22.200 --> 0:03:26.840 statistic is, essentially it's a really informed guess, um, But 0:03:27.080 --> 0:03:29.519 you know, when you need to think one thing to 0:03:29.560 --> 0:03:32.160 think about, I guess that's different about US economics statistics 0:03:32.160 --> 0:03:35.800 compared to something like pulling. Is how much effort and 0:03:35.960 --> 0:03:40.520 money and time that these people at Census or BLS 0:03:40.920 --> 0:03:44.720 spend um kind of making these data as accurate as possible. 0:03:45.080 --> 0:03:47.440 And so, you know, something that kind of came from 0:03:47.480 --> 0:03:51.040 this reporting was, yes, you know, these statistics may become 0:03:51.360 --> 0:03:54.280 you know, more and more prone to error over time 0:03:54.320 --> 0:03:57.360 if this trend doesn't abate, But essentially it's you know, 0:03:57.520 --> 0:04:00.200 still the best statistic out there for a lot these 0:04:00.280 --> 0:04:03.160 data points. How do you guys and the economics team 0:04:03.160 --> 0:04:05.600 here at Bloomberg think about it against kind of the 0:04:05.640 --> 0:04:07.800 broader backdrop of data. And I think about, Mattie, what 0:04:07.920 --> 0:04:10.400 you were just talking about with Molly, this whole idea 0:04:10.400 --> 0:04:13.760 of consumer spending leading into buying homes or buying homes 0:04:13.840 --> 0:04:16.080 leading into consumer spending. Like, there's a lot of things 0:04:16.120 --> 0:04:18.960 we can look at that maybe give us a better 0:04:19.040 --> 0:04:22.040 idea if these data points are on point. And I 0:04:22.080 --> 0:04:25.320 think about strong retail sales kind of fits in really 0:04:25.400 --> 0:04:30.280 nicely with a strong job market. Absolutely, so I think, 0:04:30.400 --> 0:04:32.760 you know, when I think about any of the economic data. 0:04:32.800 --> 0:04:35.520 When I'm reporting on it, UM, I know we emphasize 0:04:35.520 --> 0:04:38.520 a lot. You know, one month of data that definitely 0:04:38.520 --> 0:04:40.960 doesn't make a trend, It could easily just it could 0:04:41.040 --> 0:04:43.560 just as easily flip or be replies whatever it may 0:04:43.560 --> 0:04:46.680 look at maybe UM, but it's also you know, looking 0:04:46.760 --> 0:04:50.960 at the broader picture in terms of yes, you look 0:04:50.960 --> 0:04:53.800 at retail sales, but you also look at real spending data. 0:04:53.880 --> 0:04:56.880 You also look at private credit card data. You look 0:04:56.920 --> 0:04:59.159 at all of these various metrics to try to piece 0:04:59.200 --> 0:05:01.520 together this page sure as best as you can about 0:05:01.720 --> 0:05:04.120 what the economy is doing. And you see folks do 0:05:04.200 --> 0:05:07.039 that in the market. You see economists do that UM. 0:05:07.160 --> 0:05:09.799 And you know, when we think about what the potential 0:05:09.880 --> 0:05:14.159 solution is years down the road if response rates continue 0:05:14.200 --> 0:05:17.000 to fall like they're doing. Is an idea of a 0:05:17.000 --> 0:05:21.039 more blended model, So you know, taking the questions that 0:05:21.120 --> 0:05:23.400 you can only get from a person through a survey 0:05:23.920 --> 0:05:27.000 UM and then blending that with some of the private 0:05:27.000 --> 0:05:30.039 sector data that we can get UM. So one that 0:05:30.080 --> 0:05:33.320 I think of, for instance, is UM. Whenever we talk 0:05:33.400 --> 0:05:36.920 about c p I, c p I is largely based 0:05:37.000 --> 0:05:40.440 on people going in person to brick brick and mortar 0:05:40.480 --> 0:05:43.480 stores and using less scanner and scanning the price of 0:05:43.560 --> 0:05:47.039 something UM. But what they've started to do is for 0:05:47.200 --> 0:05:51.080 certain things like these scars UM, they use third party 0:05:51.160 --> 0:05:53.960 data to incorporate that in and you could just start 0:05:54.000 --> 0:05:58.599 to see more of that that combo of kind of 0:05:58.720 --> 0:06:03.279 blending of data across more metrics, both on labor data 0:06:03.400 --> 0:06:07.280 as well as things like retail sales. That's so interesting. 0:06:07.320 --> 0:06:09.560 I didn't I didn't know that context about how the 0:06:09.600 --> 0:06:12.440 CPI is actually gathered. And I'm mad at myself now 0:06:12.520 --> 0:06:14.720 for not asking about that. Well, you know, you think 0:06:14.720 --> 0:06:16.680 about it. There's a fun little thing called technology that 0:06:16.760 --> 0:06:20.719 cannot really make things kind of more exact in terms 0:06:20.760 --> 0:06:24.760 of collecting read fun story, relevant story, So appreciate it. Repicker. 0:06:25.080 --> 0:06:27.680 She's US economy reporter here at Bloomberg News via zoom 0:06:27.720 --> 0:06:29.760 from Washington, d C. Among our most read on the 0:06:29.760 --> 0:06:32.440 Bloomberg and catch it in the upcoming issue of Bloomberg 0:06:32.440 --> 0:06:35.880 Business Week, add on newsstands tomorrow, as well as already 0:06:35.920 --> 0:06:39.160 online at Bloomberg dot com, slash business Week and already 0:06:39.200 --> 0:06:42.440 on the Bloomberg terminal. You're listening to the Bloomberg Business 0:06:42.520 --> 0:06:45.520 Week podcast. Catch us live week days from two to 0:06:45.600 --> 0:06:49.480 five pm Easter on Bloomberg Radio The Bloomberg Business Ban 0:06:49.680 --> 0:06:52.560 you too. You can also listen live to our flagship 0:06:52.600 --> 0:06:56.280 New York station, Just Say Alexa play Bloomberg e Love 0:06:56.360 --> 0:07:00.040 and Dirty. I want to get to a story that 0:07:00.440 --> 0:07:04.440 is in the upcoming new issue of Bloomberg Business Week magazine, 0:07:04.440 --> 0:07:06.200 which as you know, will be out on news stands 0:07:06.240 --> 0:07:08.920 already on the Bloomberg in at Bloomberg dot com slash 0:07:08.920 --> 0:07:11.800 business Week. It is also the Bloomberg Big Take, and 0:07:11.840 --> 0:07:14.040 it feels like it's a story we've heard before about 0:07:14.040 --> 0:07:16.000 a big company that knows something bad about one of 0:07:16.000 --> 0:07:18.680 its products and yet takes a long time to make 0:07:18.680 --> 0:07:20.880 it known. So let's get to it. Joining us right 0:07:20.880 --> 0:07:24.320 now is Bloomberg News healthcare reporter Anna Edney joining us 0:07:24.360 --> 0:07:26.280 via zoom from Washington, d C. And here in our 0:07:26.320 --> 0:07:29.720 interactive broker studio, Joe Weber, the editor of Bloomberg Business 0:07:29.760 --> 0:07:34.080 Week magazine. We're talking about Zantech. Yeah, pretty explosive story. Um, 0:07:34.160 --> 0:07:37.480 in case you haven't been uh using Zantec for a 0:07:37.480 --> 0:07:40.040 few years, you're really glad that you're not using it 0:07:40.080 --> 0:07:42.400 now officially, this one off the market a couple of 0:07:42.440 --> 0:07:46.640 years ago. UM, and there's a series of lawsuits. But 0:07:46.760 --> 0:07:49.880 really you're gonna start UM potentially as early as later 0:07:49.960 --> 0:07:53.680 this month, UM on the state level. UM, and all 0:07:53.680 --> 0:07:56.120 of this will will You'll be hearing much more about this, 0:07:56.200 --> 0:07:59.320 I think in the weeks ahead. But UM, what what 0:07:59.640 --> 0:08:03.240 Anna uh dug into UM and had some explosive reporting 0:08:03.280 --> 0:08:06.960 about was was really how much Glaxo, which became g 0:08:07.200 --> 0:08:12.440 s K knew about UM some cancer concerns around Zantech 0:08:13.000 --> 0:08:15.760 for decades? Right, Anna, what did you find as you 0:08:15.840 --> 0:08:20.640 dug into this story? Yeah, that's right. UM. My colleagues 0:08:20.680 --> 0:08:24.000 Susan Burfield and Jeff Feely and I were able to 0:08:24.040 --> 0:08:28.600 get a lot of exclusive court documents. UM. We filed 0:08:28.720 --> 0:08:31.760 a lot of boyer requests. So this was an investigation 0:08:31.840 --> 0:08:35.559 that that took a few years. UM. And you know, 0:08:35.679 --> 0:08:39.480 we were able to paint this picture of the last 0:08:39.600 --> 0:08:43.000 forty years UM with zanto santox spit on the market 0:08:43.080 --> 0:08:47.559 since UM and the biggest takeaway would be that this 0:08:47.679 --> 0:08:51.200 cancer concern UM was always there from day one and 0:08:51.280 --> 0:08:54.200 even before then, before the drug was approved, there were 0:08:54.280 --> 0:08:59.240 concerns that this drug might potentially cause cancer, It might 0:08:59.360 --> 0:09:02.280 form a kind of goal that can lead to cancer UM, 0:09:02.880 --> 0:09:07.800 and Glaxo even looked at that UM in its own study, 0:09:07.840 --> 0:09:10.599 but it didn't share that study with the Food and 0:09:10.679 --> 0:09:13.520 Drug Administration when it was seeking approval for the drug 0:09:13.840 --> 0:09:16.120 in the US. UM. And then we follow that through 0:09:16.679 --> 0:09:19.760 the next four decades UM to see other times where 0:09:20.120 --> 0:09:23.640 the company saw signs where you know, there were there 0:09:23.640 --> 0:09:27.000 were until problems, UM, but they downplayed it the whole 0:09:27.040 --> 0:09:29.600 way through. ANA. The f d A part is what 0:09:29.679 --> 0:09:31.080 kind of scared me a little bit when I was 0:09:31.120 --> 0:09:33.760 reading your story. Can you talk to me about I 0:09:33.800 --> 0:09:36.240 know you mentioned one study that was not shared with 0:09:36.280 --> 0:09:38.040 the FDA, but can you talk a little bit more 0:09:38.120 --> 0:09:41.800 about how the f d A interacted with the drug 0:09:41.840 --> 0:09:45.439 and the company and approved the sale of these pills 0:09:45.840 --> 0:09:50.520 given the risks that you uncovered. Yeah, you know, when 0:09:50.760 --> 0:09:54.480 when we were reading through some of the drug approval 0:09:54.920 --> 0:09:58.600 reviews and the old transcripts and things, UM, you know, 0:09:58.720 --> 0:10:02.520 there there was discussion. The FDA knew that this this 0:10:02.720 --> 0:10:07.760 cancer risk was a concern. UM. There was discussion briefly 0:10:07.800 --> 0:10:11.560 about it, it seemed at times, but there's no one 0:10:11.679 --> 0:10:15.360 just ever really dug in. And of course, UM, Glaxo, 0:10:15.679 --> 0:10:18.800 can you know, convinced the Food and Drug Administration that 0:10:19.040 --> 0:10:22.120 they had done all the work um that this this 0:10:22.200 --> 0:10:25.760 drug was not causing cancer in mice um, which they 0:10:25.800 --> 0:10:29.600 looked at over two years UM. And so you know, 0:10:29.720 --> 0:10:32.760 there there are lots of concerns with with that statement 0:10:32.840 --> 0:10:35.600 because of what we know about the drug now, which is, 0:10:36.080 --> 0:10:38.160 you know, the longer it sits on a shelf, the 0:10:38.200 --> 0:10:42.760 more dangerous it can become, particularly if there is any 0:10:42.800 --> 0:10:45.959 sort of elevated temperature involved, which is you know as 0:10:46.040 --> 0:10:48.640 much as you know just sitting on your bathroom counter 0:10:48.920 --> 0:10:51.840 or in the medicine cabinet um. And so you know, 0:10:52.080 --> 0:10:56.199 they're the f d a UM approved based on you know, 0:10:56.440 --> 0:10:59.080 what they could know. And then you know down the 0:10:59.160 --> 0:11:02.480 road there when when this actually all came to light, UM, 0:11:02.520 --> 0:11:05.320 it was not the FDA, it was not GSK that 0:11:05.679 --> 0:11:09.360 brought this cancer concern to the public. It was an 0:11:09.400 --> 0:11:13.400 independent lab that happened to be testing zantac and found 0:11:13.760 --> 0:11:16.360 the dangerous chemical in it and alerted the f d 0:11:16.480 --> 0:11:19.280 A UM. You know, the f d A did some 0:11:19.360 --> 0:11:22.160 of its own testing also found this chemical it's called 0:11:22.400 --> 0:11:26.959 n d m a UM and you know they've they 0:11:27.000 --> 0:11:29.360 did end up forcing Zantac to come off the market 0:11:29.360 --> 0:11:33.480 in but have worked pretty hard at the FDA to 0:11:34.200 --> 0:11:37.920 also try to to to say that, you know, no 0:11:38.000 --> 0:11:41.440 concern here. We took it off the market, but it 0:11:41.640 --> 0:11:43.920 you know, don't worry. It doesn't cause it doesn't look 0:11:43.960 --> 0:11:46.520 like there are any signals that it could cause cancer. UM. 0:11:46.559 --> 0:11:49.640 And this is something that critics say, is a statement 0:11:49.679 --> 0:11:52.199 that really absolves the f d A of letting this 0:11:52.480 --> 0:11:56.480 drug on the market for so long. Perhaps also worth 0:11:56.480 --> 0:12:00.600 mentioning just how important Zantac became to Axo and the 0:12:00.760 --> 0:12:04.200 js G s KS bottom line by the numbers, and 0:12:04.640 --> 0:12:08.680 how big of a blockbuster was this. This was a 0:12:08.760 --> 0:12:11.720 huge drug. I mean, by by all accounts, it was 0:12:11.840 --> 0:12:15.240 a raging success. Um. You know, the the it was 0:12:15.280 --> 0:12:18.080 the second um what we called blockbuster drugs. So that 0:12:18.120 --> 0:12:21.520 means it hit a billion in sales um annually and 0:12:21.520 --> 0:12:23.839 then even more so, it ended up accounting for more 0:12:23.880 --> 0:12:30.079 than half of Glaxo's revenue. It essentially kept the company afloat. 0:12:30.120 --> 0:12:32.720 It allowed it to grow much bigger UM lots of 0:12:33.120 --> 0:12:37.280 mergers and things like that throughout the years. And you know, 0:12:38.280 --> 0:12:41.040 once it came off patent um and that was in 0:12:41.120 --> 0:12:43.800 the nineties, and so there were some generics that were 0:12:43.800 --> 0:12:46.000 able to come on the market. You know, they've sort 0:12:46.040 --> 0:12:50.240 of um struggled in some ways to to kind of 0:12:50.280 --> 0:12:52.760 figure out how to to ever do that again. It 0:12:52.800 --> 0:12:56.439 was it was such a a big hit for them, 0:12:56.720 --> 0:12:59.760 and bring us up to speed on on the lawsuits 0:12:59.800 --> 0:13:02.600 and and what uh what the company in the in 0:13:02.679 --> 0:13:09.679 the drug face. Now there are seventy thousand at least 0:13:09.760 --> 0:13:12.560 that we that we sort of know of UM state 0:13:12.679 --> 0:13:16.679 lawsuits that have been filed. And there is one UM 0:13:16.760 --> 0:13:20.120 that we highlight in the story. It's UM potentially the 0:13:20.120 --> 0:13:24.440 first one that will go to trial, and it's in California. UM. 0:13:24.480 --> 0:13:28.320 The gentleman who is suing G s k is his 0:13:28.400 --> 0:13:32.719 name is James gets Um. He has he has developed 0:13:32.840 --> 0:13:37.640 UM cancer and took Santak for for twenty five years 0:13:37.760 --> 0:13:40.600 or so. UM. Some of it the brand name, some 0:13:40.720 --> 0:13:42.920 of it the generic UM. This is a drug that 0:13:43.320 --> 0:13:45.959 you know was prescription at first, but you could get 0:13:46.400 --> 0:13:48.600 over the counter, you could pick up at any drug store, 0:13:48.720 --> 0:13:52.200 gas station. UM. So you know, he did that for 0:13:52.280 --> 0:13:56.040 a very long time and had no other real risk factors. 0:13:56.120 --> 0:13:59.800 He wasn't a smoker except a little bit UM and 0:14:00.080 --> 0:14:03.640 is much much younger days, and um, he didn't work 0:14:03.640 --> 0:14:09.200 around chemicals or anything like that, and so in his case, Um, 0:14:09.200 --> 0:14:11.920 over the years there were other companies that had the 0:14:12.000 --> 0:14:16.679 rights to Zantalk after Blackso and then supisor Santa Fee 0:14:16.720 --> 0:14:19.640 and Barringer Ingleheim and got it. They have settled in 0:14:19.680 --> 0:14:23.000 this case. Um An, we've got to run. We forgive you. 0:14:23.080 --> 0:14:25.120 I know there's a lot in this story, but we're 0:14:25.160 --> 0:14:28.360 running out of time. Ana Edney, Healthcare reporter at Bloomberg 0:14:28.360 --> 0:14:30.960 News from Washington Or thanks to Jill Weber, editor of 0:14:31.000 --> 0:14:33.480 Bloomberg business Week, check it out this story. Read it 0:14:33.520 --> 0:14:37.280 in its entirety in the magazine. You're listening to the 0:14:37.280 --> 0:14:41.040 Bloomberg Business Week podcast. Catch us live week days from 0:14:41.080 --> 0:14:44.440 two to five pm Easter on Bloomberg Radio, the Bloomberg 0:14:44.520 --> 0:14:47.680 Business Band. You too. You can also listen live to 0:14:47.720 --> 0:14:51.840 our flagship New York station, Just Say Alexa play Bloomberg 0:14:51.880 --> 0:14:56.600 e Love and Dirty. So it's kind of interesting, Maddie, 0:14:56.840 --> 0:14:59.680 we were breaking down Airbnb earnings after the closing bell 0:14:59.760 --> 0:15:02.680 and the stocked to shut off in the after hours. 0:15:02.720 --> 0:15:04.160 It is I think the number one gainer in the 0:15:04.240 --> 0:15:06.800 NASDAC one. So despite kind of the mellow feel in 0:15:06.840 --> 0:15:10.520 the equity market, the malaise, if you will, as investors 0:15:10.520 --> 0:15:12.520 try to figure out what the Fed's gonna do. When 0:15:12.520 --> 0:15:15.600 it comes to something like Airbnb, it's often running. It's running, 0:15:15.720 --> 0:15:18.520 and it doesn't appear to be stopping anytime soon, which 0:15:18.560 --> 0:15:20.680 I find fascinating because I don't know about you, Carol, 0:15:20.720 --> 0:15:23.080 but I feel like my friend group has moved towards 0:15:23.400 --> 0:15:28.680 a hotel vibe in our era of life that we're entering. 0:15:28.760 --> 0:15:31.800 So I'm fascinated by Airbnb's continued success. All right, So 0:15:31.880 --> 0:15:35.680 let's get to it. Because Airbnb is just soaring up 0:15:35.680 --> 0:15:38.040 I think about four. As we said, this is after 0:15:38.640 --> 0:15:41.360 the company came out their quarterly update included a record 0:15:41.440 --> 0:15:44.800 year in marketing its first full year as a of 0:15:44.840 --> 0:15:47.680 profit excuse me, and also gave an outlook showing robust 0:15:47.680 --> 0:15:50.360 travel demands. So let's get to it. In our studio, 0:15:50.440 --> 0:15:53.960 Bloomberg Intelligence senior tech industry analyst Man Deep Seeing joining 0:15:54.040 --> 0:15:56.720 us here, as we said in studio, so let's get 0:15:56.720 --> 0:16:01.480 to it. Um an amazing quarter. How do you describe it? Well, 0:16:01.960 --> 0:16:05.160 one thing is the macro is working in their favor, 0:16:05.280 --> 0:16:08.920 and when you look at consumers spending they're spending on restaurants, 0:16:08.960 --> 0:16:12.240 they're spending on travel, and Airbnb is one of the 0:16:12.280 --> 0:16:16.320 biggest beneficiaries of that travel spen. So look at what 0:16:16.440 --> 0:16:20.280 they have done since the pandemic. They have actually doubled 0:16:20.280 --> 0:16:25.280 their revenue. Since you look at all the other players hotels, online, 0:16:25.320 --> 0:16:29.040 travel players like Booking, Expedia, they're back to where they 0:16:29.040 --> 0:16:33.440 were in that's the main difference that this company actually 0:16:33.520 --> 0:16:36.640 was a share gainer in terms of the overall travel spen. 0:16:37.000 --> 0:16:41.120 They created this category for alternative accommodations and they remain 0:16:41.200 --> 0:16:44.640 a category leader even though Expedia has Verbell Booking has 0:16:44.680 --> 0:16:48.840 added some inventory, but they have six point six million listings, 0:16:49.160 --> 0:16:53.000 and supply is always an advantage when you think about marketplaces. 0:16:53.040 --> 0:16:54.480 And if that's what I was thinking about, I mean, 0:16:54.520 --> 0:16:56.480 we always say, okay, when somebody reports, are they back 0:16:56.480 --> 0:16:59.120 to pre pandemic level, you're saying the other guys, yes, 0:16:59.480 --> 0:17:02.160 these guys are doing even better than pre pandemic. Yes, 0:17:02.240 --> 0:17:05.119 and double the revenue. And look, they're still growing faster 0:17:05.200 --> 0:17:08.440 than the other guys. I do worry about the comps 0:17:08.480 --> 0:17:11.080 because that type of growth is not going to repeat 0:17:11.119 --> 0:17:13.840 in the next three years. So clearly calms are much tougher. 0:17:14.320 --> 0:17:17.359 They did get a boost during pandemic because everyone wanted 0:17:17.400 --> 0:17:20.840 to be away, they didn't want to socialize, you know, 0:17:20.960 --> 0:17:25.040 and and the work from home factors from long duration nights. 0:17:25.280 --> 0:17:28.160 It was such a big step up of their overall bookings. 0:17:28.200 --> 0:17:32.320 They're they're actually doing their bookings are long duration nights, 0:17:32.320 --> 0:17:35.200 which means people are traveling more than thirty days. Uh. 0:17:35.240 --> 0:17:37.680 You know for a lot of these uh bookings. And 0:17:37.880 --> 0:17:40.080 is that just that whole idea of people working not 0:17:40.280 --> 0:17:42.479 in the office and still working elsewhere. Is that what 0:17:42.520 --> 0:17:45.640 that is? That was what drove that bump. I think 0:17:45.680 --> 0:17:49.280 going forward they'll find a challenging to maintain that same 0:17:49.320 --> 0:17:52.720 pace because of you know, people coming back. I don't 0:17:52.840 --> 0:17:55.400 I still think remote work will remain a tail wind 0:17:55.720 --> 0:17:57.640 because we are not going back to where we were 0:17:57.680 --> 0:18:00.720 prior to the pandemic. But still, I think you have 0:18:00.840 --> 0:18:03.920 to think of the overall growth rate, and that's where 0:18:04.480 --> 0:18:08.160 the room nights sort of decelerated. But the eight rs 0:18:08.240 --> 0:18:11.439 average daily rates are off the charts. I mean, you 0:18:11.520 --> 0:18:14.560 compare them to pre pandemic levels. This company has gained 0:18:14.600 --> 0:18:17.560 so much share in terms of average daily rates. It's 0:18:17.600 --> 0:18:21.560 close to where the premium hotels are, and I think 0:18:21.760 --> 0:18:24.960 that's where you kind of factor in what they will 0:18:24.960 --> 0:18:27.840 do internationally going forward, because a lot of the growth 0:18:28.200 --> 0:18:30.920 in the last couple of years was domestic in the US. 0:18:31.000 --> 0:18:34.440 Now they're talking about China outbound travel being the next 0:18:34.440 --> 0:18:38.000 growth driver. And really people have realized that this is 0:18:38.000 --> 0:18:42.800 a viable alternative for you know, booking your travel. It's 0:18:42.920 --> 0:18:45.680 not it gives you a great experience if you're even 0:18:45.680 --> 0:18:48.600 traveling in a big group that wasn't the case before. 0:18:49.240 --> 0:18:51.240 It does give you that good experience. But I have 0:18:51.320 --> 0:18:54.040 to play the devil's advocate here because of those your 0:18:54.119 --> 0:18:57.200 hotel person is that it's just those fees, the big 0:18:57.240 --> 0:18:59.800 cleaning feet like there have been sl s gets about this, right, 0:19:00.080 --> 0:19:03.600 So what is AIRBNBA doing to address those pesky fees? 0:19:04.000 --> 0:19:07.920 So again that's where a marketplace comes into play. Marketplaces 0:19:08.040 --> 0:19:11.399 or just you know listings. They're involved in adding the 0:19:11.480 --> 0:19:14.879 host and you know, charging the fees and and doing 0:19:14.960 --> 0:19:17.560 some basic work to keep that supply on board it. 0:19:17.600 --> 0:19:20.800 But at the end of the day, they are really 0:19:20.840 --> 0:19:23.880 the scale players where every host wants to list their 0:19:23.920 --> 0:19:27.600 property and consumers come to their platform because they find 0:19:27.600 --> 0:19:31.040 the widest selection. Now you know, where else would you 0:19:31.080 --> 0:19:34.680 go because nobody else can replicate the six points six 0:19:34.720 --> 0:19:38.639 million listing, so they can charge those kind of you know, 0:19:38.800 --> 0:19:43.199 cleaning fees take rades because there is no choice, like 0:19:43.240 --> 0:19:46.199 if you, if you're a host, where else would you 0:19:46.200 --> 0:19:49.680 list your property? And that's why scale matters so much 0:19:49.680 --> 0:19:52.639 for the marketplace like you, you're not going to go elsewhere. 0:19:52.760 --> 0:19:56.680 If when people think about alternative accommodations, they think about Airbnb, 0:19:56.840 --> 0:19:59.880 it there's nobody else who can kind of whether it's 0:20:00.040 --> 0:20:03.200 consolidation or you know, sometimes we see it in various 0:20:03.200 --> 0:20:05.719 sectors where the little guy maybe not the first, you know, 0:20:05.960 --> 0:20:08.439 first one out there, but can play catch up nobody 0:20:08.480 --> 0:20:11.240 out there. I would say it's a very consolidated market. 0:20:11.280 --> 0:20:14.960 There are three main players among online travel players. It's Airbnb, 0:20:15.280 --> 0:20:20.160 Expedia and Booking Expedient Booking obviously specialized in hotels more 0:20:20.560 --> 0:20:23.560 and they're trying to build their listings on the alternative 0:20:23.560 --> 0:20:27.360 accommodation site. The only risk for Airbnb is the market 0:20:28.200 --> 0:20:31.080 maybe saturating in a couple of years. Because you have 0:20:31.119 --> 0:20:33.679 to ask yourself, if the adult population is hundred and 0:20:33.680 --> 0:20:36.800 fifty million in the US, right, how many of those 0:20:37.160 --> 0:20:40.760 are gonna want to use you know, alternative accommodations. I 0:20:40.800 --> 0:20:43.720 think the market for hotels will always be bigger. I 0:20:43.760 --> 0:20:46.000 mean as people get older. Is that what you're thinking? 0:20:46.160 --> 0:20:49.520 Were some people like their core demographic is eighteen to 0:20:49.640 --> 0:20:52.200 thirty four year olds and they have a very high 0:20:52.200 --> 0:20:56.920 repeat rate, so they've i mean penetrated the market very well. 0:20:57.240 --> 0:21:00.359 Question is can they expand beyond the thirty five to 0:21:00.760 --> 0:21:04.840 like that demographic? And that remains TOBC No one knows that. 0:21:05.240 --> 0:21:09.400 I wonder too about that demographic using airbnb is as 0:21:09.440 --> 0:21:12.240 their main home because rent is so high. I know 0:21:12.359 --> 0:21:14.720 people who have found it easier to live month to 0:21:14.760 --> 0:21:18.000 month and airbnb is across the US because it's cheaper 0:21:18.040 --> 0:21:21.800 than living in New York City. In the data, Oh yeah, seriously, yeah, 0:21:21.840 --> 0:21:25.040 I mean inflation has helped their average daily rates. I 0:21:25.080 --> 0:21:27.120 mentioned about that, you know how high they have gone 0:21:27.160 --> 0:21:29.920 because you can pass on the you know, the higher 0:21:29.960 --> 0:21:32.720 inflation to the rents. You don't again, you don't sep 0:21:32.880 --> 0:21:34.679 to live in Bali for a month than to live 0:21:34.680 --> 0:21:37.040 in New York City in an airbnb, right, And and 0:21:37.080 --> 0:21:41.040 that's where you can actually curtail it. Depending on what 0:21:41.160 --> 0:21:43.359 your pocket allows, you can go for you know, the 0:21:43.440 --> 0:21:45.520 high end, or you can go for the low end, 0:21:45.760 --> 0:21:48.560 and you have that selection available on a marketplace. So 0:21:48.920 --> 0:21:51.960 clearly scale is what drives this business. And as long 0:21:51.960 --> 0:21:54.760 as they keep adding supply. They talked about boosting supply 0:21:54.840 --> 0:21:59.400 by sixteen percent in the latest quarter. Marketplace is always 0:21:59.440 --> 0:22:03.160 matt supply iron demand, and your top line growth will 0:22:03.600 --> 0:22:06.280 be equal to your supply growth in the long term. 0:22:06.480 --> 0:22:08.800 In the near like one or two quarters, it may vary, 0:22:09.080 --> 0:22:11.320 but in the long term it will always be equal 0:22:11.359 --> 0:22:13.280 to your supply. Are they running out of properties or 0:22:13.320 --> 0:22:17.200 now not yet? So they talk about how they focus 0:22:17.280 --> 0:22:20.880