Speaker 1: This is Bloomberg Business Week from Bloomberg Radio. Hi, I'm
Speaker 1: Jason Kelly and I'm Carol Masser. Welcome to the weekend
Speaker 1: edition of Bloomberg Business Week. Over the next couple of hours,
Speaker 1: we're going to bring you some of the most important
Speaker 1: and informative coronavirus conversations that we had this week on
Speaker 1: our daily radio show. And Jason, it was week seven
Speaker 1: again for most of us working from home this week.
Speaker 1: I feel like some of the things that we focused
Speaker 1: on was certainly continued to on the energy market, we'll
Speaker 1: get to that in just a moment, but also earnings
Speaker 1: and expectations about life after COVID nineteen dominated the Bloomberg
Speaker 1: and our reporting once again and really our interviews, and
Speaker 1: I feel like we continue to talk about life after
Speaker 1: the virus that continues to be a big question, whether
Speaker 1: it's the auto industry, education, hotels, restaurants and entertainment productions
Speaker 1: and so how do we tackle all that. We go
Speaker 1: to people in the know, We go to people who
Speaker 1: are actually on the front lines as we're making these decisions,
Speaker 1: making these plan We talked to CEO s, we talked
Speaker 1: to investors as we offered do this is after all Bloomberg,
Speaker 1: but even a chef, a top chef out there about
Speaker 1: how they're handling this and as you say, not just
Speaker 1: what's going on now, but what they see when they
Speaker 1: look around the corner. Because what we do know is
Speaker 1: life will be different, very very different. We're also going
Speaker 1: to hear from Keith Barr, here's the CEO of Intercontinental
Speaker 1: Hotel Group, talk about another industry that certainly will be different.
Speaker 1: It is one of the world's largest hotel companies, and
Speaker 1: so we caught up with him about the impact. They've
Speaker 1: had a big impact, but also what does life look
Speaker 1: like afterwards. And also Max Levchin. He may be best
Speaker 1: known to many of you as the co founder of PayPal,
Speaker 1: but he's got a couple of new companies, one of
Speaker 1: which affirm it is making loans to folks to buy things.
Speaker 1: And so talk about someone who's got insights into what
Speaker 1: people are buying and not Yeah, so entrenched in the
Speaker 1: startup world. So I'm so glad we were able to
Speaker 1: catch up with him. We also caught up with another industry,
Speaker 1: like the hotel industry that has really been beaten up
Speaker 1: because of the virus. Also restaurants around the nation and
Speaker 1: in particular in New York City, crafted hospitality owner and chef.
Speaker 1: He's well known. Tom Calichio really a big advocate for
Speaker 1: the hospitality industry and restaurants in particular. We talked with
Speaker 1: him about what he's trying to do to get more
Speaker 1: support really from the government to help out the restaurant industry.
Speaker 1: It's one of the big questions out there, not just
Speaker 1: in the restaurant industry, but for everyone as we start
Speaker 1: to see this rescue and stimulus get put out. First up, though,
Speaker 1: let's go inside the magazine. We take a look at
Speaker 1: Exxon's fall from oil juggernaut to kind of run of
Speaker 1: the mill, mediocre company. It's the cover story this week.
Speaker 1: We heard from Blueberg business Week editor Joel Webber and
Speaker 1: one of the writers of the story, Brian Gruley. Started
Speaker 1: behaving less, in a less disciplined way. Then it had
Speaker 1: into you know, the early odds where you know, they
Speaker 1: would announce the deal for some acreage or another company,
Speaker 1: and it was clear to the street, here's how they're
Speaker 1: going to make money off this in the near term.
Speaker 1: And so in oh nine they bought a really big
Speaker 1: natural gas company to get in on shale gas, and
Speaker 1: I think gas prices started dropping even before they closed
Speaker 1: the deal, UM, and they could have gone into shale oil.
Speaker 1: They totally didn't, um because it made a lot of
Speaker 1: money then at that time. But they did gas. They
Speaker 1: got creams uh. Same thing. Uh. They went into the
Speaker 1: oil sands in the Western Canada, very expensive way to
Speaker 1: get oil out of sand. Essentially it's more like mining
Speaker 1: than drilling. And that turned out to be sixteen billion
Speaker 1: dollars spent, not for not very much. Russia another they're
Speaker 1: going to be a great big deal with the old
Speaker 1: excell On CEO Rex Phillerson is comrad the Vladimir Putin
Speaker 1: in asion in three to five billion dollars in the Arctic,
Speaker 1: and then Plutin went after Crimea and Obama said, you're
Speaker 1: not doing business over there anymore, Exxon, and that kind
Speaker 1: of killed that deal. And so it was going after
Speaker 1: these great, big, risky deals. And underlying this was to
Speaker 1: some degree the assumption that we all held for many,
Speaker 1: many years, decades even that oil is a finite resource
Speaker 1: and it's gonna run out, We're gonna hit peak oil.
Speaker 1: And and as as all they were doing all that,
Speaker 1: that assumption was changing radically because of the technology that
Speaker 1: the navals companies to uh break into very tight spaces
Speaker 1: of oil and gas and bring out these huge deposits
Speaker 1: of oil and gas that just weren't acceptable before. So
Speaker 1: we went from uh scarce assumed scarcity to and abundance. Brian,
Speaker 1: I feel like you and Kevin have the makings of
Speaker 1: a book here. And there have been several books written
Speaker 1: about x because I think you cite um one where
Speaker 1: they called x M one of the most powerful businesses
Speaker 1: ever produced by American capitalism. And they have been a
Speaker 1: company right, just great, a sign of great corporate America
Speaker 1: and just have plowed ahead decade after decade. So here
Speaker 1: we are now and they're in a tough spot on
Speaker 1: a many different levels. Can they plow ahead? Oh yeah?
Speaker 1: I mean, first of all, you know, they're not going bankrupt.
Speaker 1: They're not. They're not in that kind of trouble. Um.
Speaker 1: They have a reasonably strong balance sheet. Given the circumstances
Speaker 1: of the market and what's going to happen in oil
Speaker 1: in the next several months, there is there is a
Speaker 1: good chance that a lot of the independent, smaller players
Speaker 1: in the shale fields in West Sex Is in the
Speaker 1: North Dakota are just you know, but I canna be
Speaker 1: able to make it, and so they're gonna look to
Speaker 1: the big boys to buy them out. And you know,
Speaker 1: the Excens and Chevron to the world not going to
Speaker 1: pay them nine on the dollar. They're going to buy
Speaker 1: them on the chief. And that's writer Brian Grueley of
Speaker 1: the cover story. Entil Webber, the editor of Bloomberg Business Week,
Speaker 1: and I have to say a departure over the last
Speaker 1: few weeks, Carol from covers that are all are really
Speaker 1: strictly about coronavirus. Clearly the pandemic plays into the oil story,
Speaker 1: but it's much bigger well, and it's also how the
Speaker 1: mighty have fallen. Right, Who would have thought that we'd
Speaker 1: be talking about X on this way if you go
Speaker 1: back a decade or so. But it is certainly in
Speaker 1: a different place because of the global energy markets and
Speaker 1: where we are today. We're gonna more on that story too.
Speaker 1: In the Bloomberg Business we cover podcasts, so look for
Speaker 1: that as well. You're listening to Bloomberg Business Week, coming
Speaker 1: up our conversation with Tom Doll. He's the president and
Speaker 1: CEO of Subaru of America. Again another industry. Right, nobody's
Speaker 1: out there shopping for cars. They've been hit hard in
Speaker 1: across hairs. This is Bloomberg. You're listening to Bloomberg Business
Speaker 1: Week with Carol Masser and Jason Kelly from Bloomberg Radio. Well,
Speaker 1: today we're bringing you some of the most important, we
Speaker 1: hope informative conversations we had this week on our daily
Speaker 1: Bloomberg Business Week radio show, all about the coronavirus. Looking
Speaker 1: far and wide, Carol for what happens next, and Jason,
Speaker 1: let's remind everybody our interviews this week again happening in
Speaker 1: real time news continuing to cross the Bloomberg at every
Speaker 1: minute of the day, about all industries impacted by the virus.
Speaker 1: One of those industries the auto industry. And with that
Speaker 1: we spoke with Tom Doll, he's the presidency of Subaru
Speaker 1: of America U. This sector, the auto industry man hit hard.
Speaker 1: Nobody out there shopping for cars. So we talked with
Speaker 1: them about how they're adapting and how they're helping others
Speaker 1: get through the virus. This is gonna be a little
Speaker 1: bit longer recovery than people thought only because of the
Speaker 1: depth of it. Remember, we can say we're going to
Speaker 1: start up our factories and we're they're supposed to start
Speaker 1: up on maybe eleven, but we're dependent on our suppliers
Speaker 1: to be able to make sure that we've got the
Speaker 1: parts to be able to produce the cars and the
Speaker 1: volumes that we need them to produce. And the other
Speaker 1: issue that's going to happen in the car business, I believe,
Speaker 1: is so many of the other manufacturers have so much
Speaker 1: inventory that have to be disposed of, and what's been
Speaker 1: happening in the fleet and rental car markets is something
Speaker 1: that we have to pay attention to because those cars
Speaker 1: ultimately have to be disposed of in the marketplace as well.
Speaker 1: So it's gonna be interesting when the market finally does
Speaker 1: open up and we see what happens in terms of
Speaker 1: the competitive actions by some of the competitors. So let's
Speaker 1: unpack that a little bit, Tom, if we can, because
Speaker 1: I want to take you back to something sent a
Speaker 1: minute ago about the supply chain, because we were talking
Speaker 1: about this as it relates to Apple and many other companies,
Speaker 1: UM your global company obviously, and cars are complicated. I
Speaker 1: don't have to tell you that you know much better,
Speaker 1: uh than than we do. What have you seen so
Speaker 1: far in terms of the pain points and and how
Speaker 1: you're able to deal with them when it comes to
Speaker 1: the supply chain. It's fascinating because I've been around a
Speaker 1: long time at our company and around the car industry.
Speaker 1: Go back to the company, Is that right, I do, Yes,
Speaker 1: I've been around. I'm dating myself right. You've seen some things.
Speaker 1: I've seen a lot. I've never seen anything like this.
Speaker 1: I've seen my share of recessions, and this is completely
Speaker 1: different because you know, I believe when I tell you
Speaker 1: it just shut down. You don't just simply close an
Speaker 1: automobile manufacturing plan for nine weeks and then just expect
Speaker 1: it to start right back up again. The same thing
Speaker 1: with our suppliers. You just don't shut them down for
Speaker 1: that length of a period of time and not expect.
Speaker 1: There's going to be some hiccups once the factories start
Speaker 1: to get moving again, and I think we have to
Speaker 1: plan for that as we begin to bring up our
Speaker 1: production capacity. It's going to be a little bit of
Speaker 1: a while, I think, before we get back to the
Speaker 1: levels of production that we had seen prior to the
Speaker 1: to the shutdown. But it's gonna be interesting to see
Speaker 1: how it all comes together. I know our folks are
Speaker 1: working very hard to make it happen. Tell me, I
Speaker 1: am curious what worries you more what the economy looks like,
Speaker 1: and you know, the confidence that consumers have to go
Speaker 1: out there and hopefully have jobs that they can buy cars,
Speaker 1: or is it more the logistics of getting the suppliers
Speaker 1: and everything back up and running. What worries you more
Speaker 1: the economy. Well, we'll get the suppliers all figured out.
Speaker 1: They know what they're doing, and our production engineers are fantastic.
Speaker 1: We'll get the factories back up and running. I'm not
Speaker 1: worried about that. I'm worried about the long term impact
Speaker 1: that this might have on consumer consumers and their willingness
Speaker 1: to buy and spend on important things like a car
Speaker 1: and expensive things like a car or home. Right, a man,
Speaker 1: great news right now? Right? Mortgage interest rates you probably
Speaker 1: reported this earlier, are down to the lowest level ever, right,
Speaker 1: But people aren't. But the housing markets in the tank
Speaker 1: um people who have to People need to have some
Speaker 1: some stability before they're going to be willing to go
Speaker 1: back out there. So how quickly can these can jobs
Speaker 1: be added back into the economy and we get back
Speaker 1: to the point where people now feel more comfortable right, Well,
Speaker 1: you know, and the auto industry, as you well know,
Speaker 1: you know, incentive have often been a part of it.
Speaker 1: Does that make a difference in this kind of environment
Speaker 1: or what what we perceive will be the economic environment
Speaker 1: on the other side of this, Well, there's no question
Speaker 1: that demand curve is shifted down dramatically. You know, before
Speaker 1: before the shutdown, we were probably at a sixteen point
Speaker 1: eight to seventeen million unit sales projection for this calendar year.
Speaker 1: Now everybody thinks, and myself included, that we're going to
Speaker 1: be somewhere between thirteen and fourteen million vehicles for the year.
Speaker 1: So it's been a big shift. And up until that point,
Speaker 1: as you know, production was was being done to support that.
Speaker 1: So when you come out of this thing, there's it's
Speaker 1: definitely gonna be a buyer's market, and manufacturers are going
Speaker 1: to try to figure out how they can get that
Speaker 1: market share amongst themselves in that in that much smaller market,
Speaker 1: And and you know, there probably are going to be
Speaker 1: significant levels of incentives that are going to be out
Speaker 1: there once it opens up. Um, you know, we have
Speaker 1: to be smart and how we play that game, because
Speaker 1: we're not we don't have the resources that a lot
Speaker 1: of the other manufacturers have. Because of our science, we
Speaker 1: have to do things a little bit differently. One thing
Speaker 1: I do wonder about, and I'm curious about workers, Tell
Speaker 1: me about your workforce and whether or not you've been
Speaker 1: able to hold onto people or what sure For our
Speaker 1: headquarters people here that are based in Camaden, we haven't
Speaker 1: laid off anybody. We've essentially have a policy now where
Speaker 1: people are working from home. There's only about a handful
Speaker 1: of us that come in here every day because we
Speaker 1: have to essentially kind of keep the business running. But
Speaker 1: we're very concerned about the health and the safety and
Speaker 1: the welfare of our people being in being in New Jersey,
Speaker 1: one of the states that's most affected by it UM,
Speaker 1: so we're very We're very concerned. We're making sure that
Speaker 1: we we disinfect our building, We're making sure that we're
Speaker 1: taking all the protocols uh they keeping the social distancing
Speaker 1: and so forth. But so far we haven't know. We're
Speaker 1: keeping everybody on. Although there's a lot less work to
Speaker 1: do right because we don't have a lot of business
Speaker 1: that we had before. But so far we're trying to
Speaker 1: do what we can for our most valuable asset, which
Speaker 1: is our which our employees, our staff right well, and
Speaker 1: Tom is alluded to you know, you're there in New Jersey.
Speaker 1: Carroll's in New Jersey. I'm in New York. You know,
Speaker 1: we're all at the epicenter of this in many ways,
Speaker 1: and so sort of seeing firsthand at the effect of this,
Speaker 1: you know, and we've been talking a lot about this
Speaker 1: notion of you know, what is the responsibility of a
Speaker 1: company to the broader community. I know that you guys
Speaker 1: have been involved with Feeding and Feeding America pretty closely
Speaker 1: along the way here. Tell us what you're up to
Speaker 1: and how that works at this time. Yeah. Sure. What
Speaker 1: happened was we were when the pandemic first started. Uh,
Speaker 1: we saw all the lines. What struck me was the
Speaker 1: lines that occurred in San Antonio was the ten thousand
Speaker 1: people coming to a food donation center to get food.
Speaker 1: And so we came back to the office that day
Speaker 1: and we said, what can we do to help alleviate
Speaker 1: the hunger crisis immediately? And we came up with the
Speaker 1: idea of working with Feeding America in order for us
Speaker 1: to be able to move quickly because Speedy America, as
Speaker 1: you probably know, they're they're very, very very good at
Speaker 1: uh partnering with two food banks around the country where
Speaker 1: we also have retailers, and so our retailers can then
Speaker 1: partner with those food banks to make sure that they
Speaker 1: get the three So we're donating I'm sure you know
Speaker 1: that we're donating fifty million meals to Feeding America, enough
Speaker 1: to enough to um, you know, satisfy almost about four
Speaker 1: point which i'd be four point one or four point
Speaker 1: two million families for a day in terms of their meals.
Speaker 1: That's Tom Doll, the Presidency of Subaru of America and Jason.
Speaker 1: We know, like the hotel industry, the hospitality industry, restaurants,
Speaker 1: this industry, the car industry also hurt. Well. This is
Speaker 1: a business that already was in a state of dramatic change,
Speaker 1: in existential crisis, you might say. So interesting to get
Speaker 1: some time with Tom and figure out what people think
Speaker 1: about when it comes to transportation. And also it's a
Speaker 1: manufacturing intensive business, to say the least. You're listening to
Speaker 1: Bloomberg bus Wee coming up a conversation with David Edelman.
Speaker 1: He's the founder of Darko Capital and owner of sports Teams,
Speaker 1: long time investor, a lot of big thoughts and really
Speaker 1: looking ahead with him. His world contains so much so
Speaker 1: it was great to catch up with him. This is Bloomberg.
Speaker 1: This is Bloomberg Business Week with Carol Masser and Jason
Speaker 1: Kelly from Bloomberg Radio. We're bringing you some of the
Speaker 1: most important and informative conversations that we had throughout the
Speaker 1: week on our daily radio show. A lot of it,
Speaker 1: of course, Jason relating to the virus, the impact and
Speaker 1: what's our way forward after COVID nineteen. Well, and we're
Speaker 1: always looking for folks, Carol, who have their fingers in
Speaker 1: a number of pies. That is so true about David Edelman.
Speaker 1: He's the founder of Darko Capital down in Philadelphia, also
Speaker 1: has interests in the sports world, in the movie world.
Speaker 1: He's got it all, and he also had some pretty
Speaker 1: hot takes about what we're seeing now and what we
Speaker 1: may see in the not too distant future. From my perspective,
Speaker 1: because we do touch a lot of businesses, from you know,
Speaker 1: student housing and colleges and universities to you know, private equity,
Speaker 1: I think first and foremost is have to look at
Speaker 1: the impact this is having on people and you know employment,
Speaker 1: and that the economy. You went from having almost three
Speaker 1: percent unemployment to you know, this is gonna be a
Speaker 1: big differ instance a big numbers than months ahead come
Speaker 1: And I think, you know, kind of the insight into
Speaker 1: seeing industries that are just getting you know, decimated is
Speaker 1: just really sad and unfortunate. Well, let's talk about the
Speaker 1: world of education first and foremost. Carol and I talked
Speaker 1: about it a lot, in part because we both have
Speaker 1: juniors in high school, and so we're thinking about it
Speaker 1: all the time with a senior in high school. So
Speaker 1: there you go. So a friend of mine for you
Speaker 1: as well, I mean, and I know nothing has been decided.
Speaker 1: We here sort of drips and drabs from various college presidents,
Speaker 1: and many of them appear on our air here with us.
Speaker 1: They're not sure what they're gonna do. Tell us about
Speaker 1: how you think about it. From someone who is in
Speaker 1: the business of housing these students, how do you determine
Speaker 1: what to do and when to do it? So we
Speaker 1: were able to kind of really get some very interesting
Speaker 1: insight into what happened from the moment the school's transitioned
Speaker 1: from you know, on campus to online. And I think
Speaker 1: the most surprising data point was across the country about
Speaker 1: students that we house somewhere in the neighborhood, of of
Speaker 1: them sheltered and quarantined in our apartments versus going to
Speaker 1: what i'll say, quote home correct and you know, some
Speaker 1: places like Texas and Louisiana was in the eighties and higher.
Speaker 1: And we we learned a lot from that, which was
Speaker 1: a you know, one, you know, not everyone has a
Speaker 1: traditional family unit where you know, maybe going home was
Speaker 1: conducive to I think not everyone wants to be you know,
Speaker 1: quarantined with their family. And three, I think that a
Speaker 1: lot of these students made the decision that in order
Speaker 1: for them to stay focused on their education, they needed
Speaker 1: kind of the comfort of where they were in their apartment.
Speaker 1: And so it was a staggering number for us. I
Speaker 1: think it real firmed that you know, these students are
Speaker 1: young adults and uh, you know, kind of putting themselves
Speaker 1: first as too far as far as a focus on
Speaker 1: education and what they wanted to accomplish. So you know
Speaker 1: that that was the first data point that we just
Speaker 1: really kind of took us all by surprise. And I
Speaker 1: think the other part that we learned is that the
Speaker 1: online experience that these students received was not what they
Speaker 1: didn't live up to their expectations or candidly the expectations
Speaker 1: of the university. And I think, you know, one thing
Speaker 1: we've always looked at in our business of student housing is, hey,
Speaker 1: what's the durability of universities compared to online learning? You know,
Speaker 1: prior to this, you know that that online learning was uh,
Speaker 1: you know, you know, kind of becoming more prevalent. And
Speaker 1: we had always said that you can't replace the college experience.
Speaker 1: And now more than ever, I'm convinced to that, and
Speaker 1: I think this really proved it. And I where I'm
Speaker 1: headed with that is that based on the universities we've
Speaker 1: spoken with, they really want to get open in the fall. Uh.
Speaker 1: The economics, of course, you know where this is a
Speaker 1: bloomberg business. Let's talk about the economics that they can't
Speaker 1: afford not to open um and not have the students there,
Speaker 1: number one. But number two, I think they acknowledge that
Speaker 1: the quality of the education online is not the same
Speaker 1: as kind of in the classroom. Well, and you have
Speaker 1: to imagine this scenario where a student or a parent
Speaker 1: like us is going to, shall we say, balk at
Speaker 1: the idea of paying you know, fifties sixty seventy thousand
Speaker 1: dollars a year for an online education, right, I mean
Speaker 1: fair to say I think it's fair. Yeah, think it's
Speaker 1: fair well, and I do you have to think educational
Speaker 1: institutions are are looking at that, David and saying, man,
Speaker 1: if we don't get our act together, people are going
Speaker 1: to be like, especially if the online goes really if
Speaker 1: it was going really well, to kind of rethink how
Speaker 1: we do all of this. You know, and I've always
Speaker 1: said that, you know, there's over colleges and universities out there,
Speaker 1: and certainly from the campus apartment's perspective, when we're looking
Speaker 1: to build apartments, we want to pick universities that we
Speaker 1: think our value proposition, and a lot of universities that
Speaker 1: exist don't offer, in my opinion, the value proposition, uh
Speaker 1: for you know, for the for the cost. But to
Speaker 1: your point, the value proposition and paying you for dollars
Speaker 1: for a purely online experience probably doesn't make sense long term.
Speaker 1: And that's David Edelman, the founder of Darko Capital. I
Speaker 1: have to say one of my favorite conversations of the
Speaker 1: week Carol, because we started up and he basically was like,
Speaker 1: look this is what it's going to be. This is
Speaker 1: where we're going to go, so the things we have
Speaker 1: to worry about. Well, and what I loved is he
Speaker 1: really had some great insight on education, uh and thoughts
Speaker 1: about online education. He's talking to a lot of folks
Speaker 1: who are running colleges and universities. He's all about, you know,
Speaker 1: housing for students. But he also got some inside about
Speaker 1: how the online world is working when it comes to education.
Speaker 1: But also, as you said, sports, private aviation so much
Speaker 1: so I'm really glad we got some time with him.
Speaker 1: You're listening to Bloomberg Business Week. Coming up, we hear
Speaker 1: from PayPal co founder Max Levchin on his latest company affirm.
Speaker 1: This is someone to Jason at the crossroads of startups,
Speaker 1: technology and the impact it's having on our world. His
Speaker 1: whole job is looking around the corner, and he's anticipated
Speaker 1: so many things when it comes to consumers and technology.
Speaker 1: You're gonna want to tune in Business Bloomberg. This is
Speaker 1: Bloomberg Business Week with Carol Masser and Jason Kelly from
Speaker 1: Bloomberg Radio. Well, today we're being you some the most
Speaker 1: important and we hope informative conversations we had on our
Speaker 1: daily Bloomberg Business Week radio show about the coronavirus, and again,
Speaker 1: Carol vs are happening in real time across the course
Speaker 1: of the week, So forgive us if maybe the news
Speaker 1: overtakes it at some point. So much happening in so quickly, Well,
Speaker 1: we have the opportunity to catch up with Max Left
Speaker 1: and talk about someone who understands things happening quickly and
Speaker 1: the impact it's having on our world. The co founder
Speaker 1: of PayPal. He's got a new startup. It's called a firm,
Speaker 1: and it's all about um installment plans to help online shoppers.
Speaker 1: So really playing into what's going on with consumers, where
Speaker 1: they're spending money, where they're not. His resume to Jason
Speaker 1: is a reminder of why we learn a lot when
Speaker 1: we talk to him. Listen to our conversation. You know,
Speaker 1: I have to say, knocking on woods, we've been extremely
Speaker 1: lucky a firm transitioning to our from home seamlessly, almost
Speaker 1: almost perfectly, really, and we've been able to support our
Speaker 1: partners and our customers and our employees throughout this process
Speaker 1: generally without too many crazy fire drills. So all then,
Speaker 1: I feel very lucky and certainly aware our companies where
Speaker 1: those sorts of people already took place, and you know,
Speaker 1: I think some of this is just getting started too well.
Speaker 1: And Max, it's interesting. I mean, it comes at a
Speaker 1: fascinating time for you where there's so much momentum around
Speaker 1: what you're doing at a firm and you have this
Speaker 1: pretty incredible window into consumers spending. First of all, remind
Speaker 1: us exactly how a firm works, and then we'll get
Speaker 1: into sort of what you're seeing through some of that data. Sure,
Speaker 1: a firm serves primarily a young young their audience as
Speaker 1: and our customers are primarily millennials and Gen xtas and
Speaker 1: so forth, and we're really a credit card alternative. You
Speaker 1: would find this if you're buying a Peloton or shopping
Speaker 1: at Palmark dot com. And really every opportunity between we
Speaker 1: are there in the checkout page, sometimes on the product
Speaker 1: age where if you don't use your credit card and
Speaker 1: would like to pay for an item or I ams
Speaker 1: over time with great degree of simplicity. Everything is clearly priced.
Speaker 1: There are no fees of any kind. They're not even
Speaker 1: a late fees. As a product that every really built
Speaker 1: on this idea that if we communicate very clearly to
Speaker 1: our customers what it takes to pay something over time,
Speaker 1: they would choose us over credit cards and work with
Speaker 1: ben at It for eight years. At this point, we
Speaker 1: have many thousands of merchants that work with us and
Speaker 1: many many, many millions of customers billions of dollars these
Speaker 1: transactions that we processed, and so we do see demand
Speaker 1: in retail, primarily online, although we have a meaningful presence
Speaker 1: offline as well, and so you're right, we have some
Speaker 1: some fascinating status were observing. Well, let's get into that.
Speaker 1: Tell us about because you know, Jason and I have
Speaker 1: talked about just kind of on our own world what
Speaker 1: we're spending money on right now, and earlier we talked about,
Speaker 1: you know that millennials in particular might stop with all
Speaker 1: the experiences and they're gonna be spending on their home
Speaker 1: and other things because that's going to be the world
Speaker 1: we're living with and you're not gonna be able to
Speaker 1: travel easily. What are some of the data points that
Speaker 1: you guys are seeing about where people are spending their
Speaker 1: money right now? So you pretty much nailed it to
Speaker 1: set to say, I think that the headline is exactly right. Uh,
Speaker 1: millennials and We're not just starting moneials like many of
Speaker 1: our customers are so on the younger side, but everyone
Speaker 1: has sort of turned into words. So if you are
Speaker 1: setting up your home office, your home jim, your home
Speaker 1: restaurants or your part you home restaurant, that is growing
Speaker 1: off the charts, So just give you some stats of
Speaker 1: office sales that we are processing. Is up overall, homewears
Speaker 1: or mattressists for insured, to decoration, you know, everything that
Speaker 1: you might have one you have to make your home nicer.
Speaker 1: But there's some events that are just incredibly high demand
Speaker 1: right now. So the the kitchen supplies, for example, are up sent.
Speaker 1: Apparently everyone has to baker and make their photo starters,
Speaker 1: and so sure enough there's lots and lots of things
Speaker 1: that you need to that, including breadmakers, which is one
Speaker 1: of the top category apparently, uh, fitness, you know, as
Speaker 1: you baking need to burn the calorie suit. So across
Speaker 1: the board, you know, obviously Peloton is a one of
Speaker 1: the publicly traded companies that that's note extordainly well in
Speaker 1: that category. But Mirror an Tonal and all the other
Speaker 1: merchant partners of ours are all reporting huge growth. The
Speaker 1: overall categories up a hundred and six, which is you
Speaker 1: know that that's an incredible growth given how big it
Speaker 1: already is. UM, I can sort of go on on
Speaker 1: and on these sort of the losers on the other side,
Speaker 1: or sort of the unforshaped ones are also quite predictable. UM. Clothing,
Speaker 1: you know, no one needs to wear pants on zoom,
Speaker 1: and so most you know, you know what most people
Speaker 1: seem to be not shopping for for fashion. Um Uh,
Speaker 1: there's actually a footnote. I'll come back to that in
Speaker 1: a second. But clothing is down, travel decimated really estimating
Speaker 1: sense that Max leve Chind is the CEO of a firm,
Speaker 1: co founder of PayPal, a stalwart of Silicon Valley. We
Speaker 1: want to talk with him more expansively about some of
Speaker 1: his experience and what happens next. But Max, before we
Speaker 1: leave a firm, I do want to ask you. This
Speaker 1: has brought into sharp relief a lot of trends within
Speaker 1: buying and retail and merchants, so many things. I do
Speaker 1: wonder from your perspective, what does this accelerate or what
Speaker 1: does it accentuate? I guess when it comes to the
Speaker 1: future of buying from the merchant side of things, lots
Speaker 1: of different things. It could be a multi hour this
Speaker 1: because what's the most important thing? Then, I think just
Speaker 1: to be the your your conversation about the Olympics. I
Speaker 1: think every major retailer with a significant presence offline is
Speaker 1: going to have to reinvent themselves from both logistical and
Speaker 1: real estates management perspective, where show rooms are gonna become
Speaker 1: warehouses and front of the house is going to become
Speaker 1: a film into the house. And so there's just lots
Speaker 1: and lots of major movement that has take pot, especially
Speaker 1: for folks who was large real estate holdings. And then
Speaker 1: while they're doing this, they're gonna have to retool themselves
Speaker 1: for existence that involves buy online, pickup and store by
Speaker 1: over mail, of return and store that all these new
Speaker 1: problemsies that used to be exceptions are now going to
Speaker 1: be front and center because people are not going to
Speaker 1: be comfortable walking around the large store with a salesperson
Speaker 1: in their face. And so as this takes place, I
Speaker 1: think it's going to create massive opportunities for people that
Speaker 1: create software that runs the service systems and connect the
Speaker 1: dots between different warehouses and fulfillment pipeline and things like that.
Speaker 1: So I think that's probably the thing that I'm hearing
Speaker 1: about more and more in just the last couple of weeks. Yeah,
Speaker 1: that makes a lot of sense, right. Crisis creates, you know,
Speaker 1: certainly disruption and innovation and because you kind of have
Speaker 1: to figure out a new way to do it, and
Speaker 1: you have to do it fast if you're going to survive.
Speaker 1: I do wonder to max when you look at specific
Speaker 1: retail categories, like I look at big department stores, are
Speaker 1: people going to want to go back? And I know
Speaker 1: that's easy for me to say because I live in
Speaker 1: an urban environment and I have lots of options, but
Speaker 1: I do wonder, And you know, if you're out in suburbia,
Speaker 1: that's where you go to, you know, if you want
Speaker 1: to go to a brick and mortar. But I do
Speaker 1: wonder what your thoughts on about, you know, like department
Speaker 1: stores on the other side of this, who are already
Speaker 1: in a beaten down state. I think the we c
Speaker 1: will absolutely out of business. I don't I don't think
Speaker 1: that's a that's a question at this point. The strong
Speaker 1: ones will innovate. I think it's an opportunity for those
Speaker 1: that want to double down on the physical retail and
Speaker 1: create the impression hopefully the reality of safety. You know,
Speaker 1: maybe instead of having a physical salesperson, you'll have an
Speaker 1: iPad on wheels rolling around whether even a store, and
Speaker 1: telling you where to look. And I think the physical
Speaker 1: distancing and concern or just personal safety is going to prevail.
Speaker 1: But it's not as though we aren't going to get
Speaker 1: out of the house, especially as soon as we're allowed
Speaker 1: to do so. It's just we're going to take places
Speaker 1: where we feel safer, you know, like we are likely
Speaker 1: to get what we need fulfill than uh, not expose
Speaker 1: ourselves anymore than we absolutely must. Just you know, trips
Speaker 1: to the grocery stores have never really ended because people
Speaker 1: need to eat. People are going to go buy pants again,
Speaker 1: They're just going to choose stores where they feel the
Speaker 1: safest and that they're going to get in and out
Speaker 1: and right, Max, I do wonder, I mean, especially given
Speaker 1: your experience and history, and you know you're there on
Speaker 1: the front lines of Silicon Valley. You've watched, I'm sure
Speaker 1: with great interest. Is we have all of us as
Speaker 1: a society sort of wrestle with technology over the last
Speaker 1: few years and the role that it plays and the
Speaker 1: good and the bad. I do wonder how this, in
Speaker 1: your estimation, this pandemic has changed our relationship with technology.
Speaker 1: What do we know more about, what do we think
Speaker 1: more about as we go forward, especially given what you
Speaker 1: just said as it relates to brick and mortar and
Speaker 1: sort of that physical experience. I think all the choices
Speaker 1: we have to make are brought into sharper relief. And
Speaker 1: I think right now we are in this extreme triage
Speaker 1: mode where or you know, can have a video conference
Speaker 1: and company that has a well known, fairly significant security
Speaker 1: bug and everybody says, well, that's a real problem. But
Speaker 1: I'm still going to get on my call right now
Speaker 1: because I have to run my business arrety to do
Speaker 1: this or that, and so many choices that we make
Speaker 1: are going to be extremely solitarian and far or less theoretical. Yes,
Speaker 1: I care about my privacy. No, I'm not going to
Speaker 1: hang up because I need to finish this negotiation or
Speaker 1: this contract. As we sort of get into a little
Speaker 1: bit more normalcy or get used to the new normal,
Speaker 1: we are going to get back to sort of a
Speaker 1: little bit more navel gazing and questioning, you know, are
Speaker 1: we making the right trade offs? That said, I think,
Speaker 1: you know, even the conversation around will Google an Apple
Speaker 1: there's a property working on to trace contact that's gonna
Speaker 1: be a major privacy violation or not. I think in
Speaker 1: the world where we're canceling Olympics, which to me is
Speaker 1: a sort of a cornerstone events that define society because
Speaker 1: we just can't guarantee safety, I think we should double
Speaker 1: down and lead into technology that will allow us to
Speaker 1: enable such events again. So I think in that sense,
Speaker 1: I'm a big alogy bowl. That's said. I think over time,
Speaker 1: as we get used todays, we will probably start questioning
Speaker 1: some of the decisions were making. That's Max Levchin, the
Speaker 1: CEO of a firm, and let's remind everybody he co
Speaker 1: founded PayPal. He was the CTO of that company, was
Speaker 1: chairman of Yell for a long long time, he was
Speaker 1: on Yahoo's board. So this is a guy who understands,
Speaker 1: an individual who understands what's going on in technology, really
Speaker 1: understands disruption, and as you said, someone who is great
Speaker 1: at looking around the corner, what's coming up next? Right,
Speaker 1: fundamental changes are happening right now. Some of the things
Speaker 1: were happening already. This is an accelerant, but looking ahead,
Speaker 1: our lives are certainly going to be different, and we
Speaker 1: know for a fact that technology is going to play
Speaker 1: a big role. Well, that wrotes up the first hour
Speaker 1: of the weekend edition of Bloomberg Business Week from Bloomberg Radio.
Speaker 1: I'm Jason Kelly and I'm Carol Mass are planning coming
Speaker 1: up in our next hour, including a conversation with the
Speaker 1: dean of the Boston University School of Public Health. We're
Speaker 1: talking about Sandro Gallea, and we love catching up with him.
Speaker 1: I feel like this is another one of our go
Speaker 1: to voices as we've been dealing with the pandemic and
Speaker 1: understand ending how we get through this. Plus this weekend,
Speaker 1: it is the season premiere of Billions, one of my
Speaker 1: favorite shows. We caught up with the co executive producer
Speaker 1: for that showtime hit talking about the industry, but also
Speaker 1: a little bit of a preview of what you may
Speaker 1: see come Sunday night. But like many other productions, right
Speaker 1: they've had to shut down. So they're thinking to um
Speaker 1: about how do you come back after the virus, because
Speaker 1: it's going to be very different when it comes to
Speaker 1: productions in the city, in the state, and really around
Speaker 1: the country. Plus another edition of Business Week Talks, this
Speaker 1: one featuring a conversation we had with Keith bar he's
Speaker 1: the CEO of Intercontinental Hotels Group. Alright, looking forward to that.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week from Bloomberg Radio. Hello,
Speaker 1: I'm Carol Messer and I'm Jason Kelly. Today we're bringing
Speaker 1: you some of the most important, we hope informative conversations
Speaker 1: we had on our daily radio show, Bloomberg Business Week,
Speaker 1: all about the coronavirus. It's in the center of all
Speaker 1: of our lives. It is going to affect how we work,
Speaker 1: how we play, everything that we do going forward. So
Speaker 1: a lot of interesting conversations coming up, and Jason, of course,
Speaker 1: these conversations happening in real time as the news continue
Speaker 1: to change around us. One of the conversations we had
Speaker 1: Keith bar he's the CEO of the giant hotel company,
Speaker 1: Intercontinental Hotels Group. It was another edition of BW Talks.
Speaker 1: Loved catching up with him. Also April Taylor. We hadn't
Speaker 1: talked to her before, but we were so excited because
Speaker 1: she's a co executive producer of the big hit show Billions,
Speaker 1: premiering season five this weekend. But first up, We checked
Speaker 1: in on the virus the medical perspective with one of
Speaker 1: our go to guests. We're talking about Sandro Galleia. He's
Speaker 1: the dean of the Boston University School of Public Health.
Speaker 1: Check it out. As the pandemic proceeds, we are seeing
Speaker 1: more and more how this exposes fractures in our society.
Speaker 1: The the pandemic first started, there were a lot of
Speaker 1: conversation about how the virus does not discriminated effects everybody,
Speaker 1: But it didn't take long for us to realize the
Speaker 1: devirus does discriminate. That yes, we are all at risk
Speaker 1: of the virus, but ultimately those who are more at
Speaker 1: risk are those who are marginalized, who are poor, who
Speaker 1: are people of color, who live alone, who are single parents,
Speaker 1: and those who die are those same groups. So what
Speaker 1: we're seeing is a world where groups that are vulnerable
Speaker 1: do not even have protections from something as widespread as
Speaker 1: a pandemic like this. And you're hearing this from data
Speaker 1: emerging from cities all over the country and really from
Speaker 1: all over the world. So I certainly hope that this
Speaker 1: is a wake up call for us that says, even
Speaker 1: in the context of a pandemic, we have created conditions
Speaker 1: where self haves and health have not deviate at a
Speaker 1: time like this. And Dr Galia, how did we get here?
Speaker 1: I mean, how did it get this bad? Uh? And
Speaker 1: and was this something that always existed? It feels like
Speaker 1: it's been exacerbated in the last you know, call it
Speaker 1: ten twenty years. Yeah, well, when you look at the data,
Speaker 1: it has been explicibated probably in the last thirty to
Speaker 1: forty years, so about about forty years ago. This is
Speaker 1: important to to note the American health. American health was
Speaker 1: among the best of the high income world. Now today
Speaker 1: we are square squarely the worst. We have the squarely
Speaker 1: the worst health of any of our high income country peers.
Speaker 1: So we have life expectancy is shorter, we have higher
Speaker 1: death from infector disease, higher that's from from a non
Speaker 1: communicable disease, and we leave about five years of life
Speaker 1: expectancy on the table compared to other countries. So you know,
Speaker 1: I would ask you, and ask every anybody listening. You
Speaker 1: know we have chosen, we have chosen to leave five
Speaker 1: years behind in life expectancy. And now you may be saying, well,
Speaker 1: I didn't choose that, but we did. You did, and
Speaker 1: I did because we have we have voted for policies
Speaker 1: that allow that to happen. So it's been about the
Speaker 1: past thirty to four years where our health as a
Speaker 1: country has been getting progressively worse, and it has brought
Speaker 1: us to a place where when something like this happens,
Speaker 1: it reveals this underlying truth. Now, the truth is with
Speaker 1: us at all times. The virus did not create that.
Speaker 1: The virus is just exposing it. And what specifically the
Speaker 1: policies and and and maybe the ones that could more
Speaker 1: easily than others be reversed. What what would you point to? Well,
Speaker 1: I think we we need need to really look at
Speaker 1: this from top to bottom. We would start with the
Speaker 1: fact that we have a system which ultimately accumulates resources
Speaker 1: and rewards those who have resources. That starts from our
Speaker 1: taxation policies, all the way to our employment policies, all
Speaker 1: the way to who gets sickly who doesn't, From the
Speaker 1: state of our education, from the state of our housing.
Speaker 1: If we really wanted to tackle this, we would say,
Speaker 1: how do we create a world where everybody has access
Speaker 1: to high quality education to allow us to change people's
Speaker 1: life trajectories, that everybody has access to stable housing, where
Speaker 1: we have a fair economy to such such that people
Speaker 1: who work hard can get jobs that puts them on
Speaker 1: the right track, and all of that ultimately would add
Speaker 1: up to creating much better life trajectories for people. That
Speaker 1: is so true because if you think about it, if
Speaker 1: you get a good education, you probably get a good
Speaker 1: job that also provides you with great benefits or good
Speaker 1: benefits in terms of healthcare, and us some benefits or
Speaker 1: some benefits. Right, But but we know what's what amazes
Speaker 1: me and Jason and I um hosted a quality summit
Speaker 1: that we did here at Bloomberg and we were talking about,
Speaker 1: you know, how this virus is impacting the more vulnerable populations.
Speaker 1: As you said healthcare, the problems have been exacerbated. I
Speaker 1: thought you said forty five to fifty years. It's a
Speaker 1: long time. Why haven't we been able to figure this out.
Speaker 1: We have some of the best and brightest minds in
Speaker 1: this nation, public sector, private sector. We know the problems
Speaker 1: are there, They've been there for a long time. What's
Speaker 1: holding us back? Is it private sector? Is it public sector?
Speaker 1: Where's the problem? Well, it's a terrific question. I would
Speaker 1: point to all of us. I think we are holding
Speaker 1: ourselves back frankly because those of us wore in the riches.
Speaker 1: That means me, that means you have been too self involved.
Speaker 1: And frankly, the system serves us too well. There really
Speaker 1: is little incentive to push against the system that ultimately
Speaker 1: serves those who are dominating the cultural business conversation. And
Speaker 1: and that is and that is all of us. So
Speaker 1: we need to say, this is a moment in time
Speaker 1: which has exposed these underlying inequities, and which shows us
Speaker 1: that there is a country of health haves which is
Speaker 1: roughly the riches, and health have not, which is roughly
Speaker 1: the poorest, and say that is not the kind of
Speaker 1: country we want to live in now. We do not
Speaker 1: want to live in that kind of country because that
Speaker 1: is wrong. And secondly, because if there is another outbreak
Speaker 1: like this, it threatens us all. So we're beginning to
Speaker 1: see with this outbreak that if some of us are vulnerable,
Speaker 1: all of us are vulnerable. And if this is not
Speaker 1: a wake up call a moment in time, I don't
Speaker 1: know what is. And that's Sandro Galia. He's the dean
Speaker 1: of the Boston University School Public Health and author a
Speaker 1: very relevant and I have to say, candid and honest
Speaker 1: voice in all of this. I really enjoyed talking to
Speaker 1: him because he's looking at it obviously from the medical perspective,
Speaker 1: but also from a social perspective and helping us understand
Speaker 1: some of what this virus is laying there. You enjoyed it.
Speaker 1: I enjoyed it. I had a bunch of our listeners
Speaker 1: emailing me or tweeting at me because they that conversation
Speaker 1: really resonated with them. What's interesting, You're right, Jason. He
Speaker 1: talks about how the coronavirus has been really a wake
Speaker 1: up call about the health haves and health have not
Speaker 1: in our society. It's a much bigger problem than we
Speaker 1: may have thought, and he really gets into that. You're
Speaker 1: listening to Bloomberg Busines Week. Coming up, another edition of
Speaker 1: Business Week Talks features our conversation with Keith bar He's
Speaker 1: the CEO of Intercontinental Hotels Group. This is Bloomberg. This
Speaker 1: is Bloomberg Business Week with Carol Masser and Jason Kelly
Speaker 1: from Bloomberg Radio. We're bringing you some of the most
Speaker 1: important and informative conversations that we had throughout the week
Speaker 1: on our daily radio show. Of course, talking a lot
Speaker 1: about the virus Jason on various industries and what's our
Speaker 1: way forward after COVID nineteen And these are happening in
Speaker 1: real time, of course, and we were lucky to have
Speaker 1: another edition a Business Week Talks. It's our series where
Speaker 1: we go a little deeper with a CEO and in
Speaker 1: this case, someone who's right in the middle of the
Speaker 1: most disrupted, one of the most disrupted industries out there,
Speaker 1: talking about hospitality. Here's our conversation with the CEO of
Speaker 1: Intercontinental Hotels Group, Keith bar A challenging time for the
Speaker 1: TELL industry. I mean when you think about the impact
Speaker 1: of the travel restrictions, social distancing UM, borders being closed,
Speaker 1: cancelation of conferences, meetings and events, um. You know, we've
Speaker 1: never seen an impact to demand for their TELL industry
Speaker 1: like this in our life. When I look at the
Speaker 1: start of the year, we had a fairly good January
Speaker 1: and February, and then as an industry, we saw revenues
Speaker 1: begin falling quite quickly, uh in March, and and the
Speaker 1: impact on people's been significant, right, I mean this industry employees.
Speaker 1: Traveling tourism is one in ten jobs globally, and so
Speaker 1: you've seen millions of people in the us become unemployed
Speaker 1: in a very very short period of time. And so, Keith,
Speaker 1: help us understand how that plays through to your business,
Speaker 1: you know, by the numbers mean how many people have
Speaker 1: you have been affected within your company by this, either
Speaker 1: temporarily or or god forbid, permanently. Yeah. So, I mean
Speaker 1: we have a model where we are basically a franchise
Speaker 1: or for most of our business. So most of the
Speaker 1: hotels that we have around the world nearly six thousand,
Speaker 1: are really small businesses, are an individually owned hotel who
Speaker 1: may employ fifty fifty people. Uh, we have about four
Speaker 1: hundred thousand people who work in our hotels around the world,
Speaker 1: and many of those people today have been furloughed or
Speaker 1: been been made unemployed and so um. Thankfully, the US
Speaker 1: did pack the Cares Act and had the paycheck Production
Speaker 1: program which enabled these small businesses to hopefully retain a
Speaker 1: lot of this staff. Um And at the corporate level,
Speaker 1: we've been cutting people salaries, we've been cutting capital expenditures,
Speaker 1: really focusing on liquidity to make sure that we can
Speaker 1: get through this very very challenging time in the industry. Well,
Speaker 1: having said that, you know, Keith and having kind of
Speaker 1: an asset light business. How has that protected you as
Speaker 1: a company overall from from falling into a deeper crisis. Yeah? Really,
Speaker 1: I mean we were some of the less leveraged companies
Speaker 1: out there in this industry, and since we don't own
Speaker 1: a lot of assets, we have less exposure. UM. So
Speaker 1: about focus really has been on customers and on colleagues,
Speaker 1: and on our owners and how do we help all
Speaker 1: those different individuals and stakeholders get through this. So customers
Speaker 1: has been about giving them flexibility on bookings and so forth.
Speaker 1: With our colleagues, has been helping them access the programs
Speaker 1: that are around the world, whether it's um there's a
Speaker 1: program here in the UK where the government is basically
Speaker 1: funding up to eight percent of someone's pay up to pounds,
Speaker 1: or accessing the federal unemployment and local employment in the US,
Speaker 1: with our owners accessing the small business loans that turned
Speaker 1: to grants. Been very, very focused on that because those
Speaker 1: are the people that are being the hardest impacted. And
Speaker 1: we know by looking after all those stakeholders and helping
Speaker 1: them get through this, we can come out of this
Speaker 1: the stronger business and a healthier biness. But it is again,
Speaker 1: you know, people talk about challenging. I mean, you know,
Speaker 1: I've been through the financial crisis. I've been through you know,
Speaker 1: nine eleven, and we've never seen demand drop like this,
Speaker 1: And I think an industry is going to have to
Speaker 1: think about how does it come out of this and
Speaker 1: how do we work with government and how do we
Speaker 1: work as an industry to help businesses stay vibrant during
Speaker 1: this timeframe? Reopen uh and then see what the what
Speaker 1: the new norm looks like going forward. Well, we want
Speaker 1: to talk about that new normal for sure, but one
Speaker 1: thing I want to ask you about keep before we
Speaker 1: get too far away from it, is what the experience
Speaker 1: of your owners and your colleagues has been in terms
Speaker 1: of accessing those small business loans. Because we're hearing varying
Speaker 1: reports about availability, We've heard a little bit of controversy
Speaker 1: of you know, who's getting it, who's not, what's coming
Speaker 1: back to you as your colleagues report in. Well, let
Speaker 1: me stop by saying just just for the record, I
Speaker 1: we have not received any funds from the Paycheck Protection
Speaker 1: Program UM full stop, and we've been very focused on
Speaker 1: getting our owners there. So we've been hosting webinars from
Speaker 1: day one helping our own get to these programs UH
Speaker 1: and had really good success with it. A number of
Speaker 1: wonderful stories about hotels, Holiday and Express that was closed
Speaker 1: was able to access the program and then reopened and
Speaker 1: hire the staff back too. So it hasn't been perfect clearly.
Speaker 1: But if you think about the Small Business Association, I
Speaker 1: think PROCESS is normally about thirty billion dollars a year
Speaker 1: in the US, and they did three billion already in
Speaker 1: a month. Real testament to they're they're trying to help
Speaker 1: out as many businesses as they can. Um Clearly the
Speaker 1: program needs to expand them. You know. One of the
Speaker 1: things we've been saying to the government was great first then,
Speaker 1: but these programs are gonna have to expand and be
Speaker 1: extended because this is not going to be over in
Speaker 1: a month. Business doesn't go back to normal tomorrow, and
Speaker 1: so we've gotta think about the long term again, health
Speaker 1: and stability of an industry, and it is. It's one
Speaker 1: in ten jobs globally and in the US is in
Speaker 1: this sector. And so that's a lot of people who
Speaker 1: we need to look after, and a lot of small
Speaker 1: businesses who who buy from local vendors, who hire local
Speaker 1: construction workers to build these hotels it's this intercatencting of
Speaker 1: our economy we have to recognize and make sure we
Speaker 1: can kind of help work through that together. Does the
Speaker 1: government understand that, Keith, Do you think they understand that
Speaker 1: when you get on the other side what really needs
Speaker 1: to be done. I think so. You know, I've actually
Speaker 1: had a couple of calls with the US FED. We've
Speaker 1: been engaging with the White House, with the Senate. I mean,
Speaker 1: they really do understand that they had to move quickly.
Speaker 1: They do seem to understand that they're going to have
Speaker 1: to do more, so hopefully they'll be able to get
Speaker 1: the next part of the package out. Um. But I
Speaker 1: think it's responsibility of business to help continue to educate
Speaker 1: them on how this is unfolding, the impact that's going
Speaker 1: to have more broadly, um, and also how we're part
Speaker 1: of the solution too, because we're trying to help out
Speaker 1: as much as we possibly can. You know, we are.
Speaker 1: We're hosting frontline workers and medical professionals all around the
Speaker 1: world in our hotels. You know, we're donating hundreds of
Speaker 1: thousands of dollars to food banks in different markets around
Speaker 1: the world to help out people who are in need.
Speaker 1: We're we're providing through a great initiative called First Pashtack
Speaker 1: First Responders First, giving thousands of room nights to first
Speaker 1: responders who close to medical facilities who need accommodation. You know,
Speaker 1: I think that's as an industry, how we have to
Speaker 1: rally around is how can we help get through this
Speaker 1: both by supporting owners, supporting colleagues, also our frontline workers
Speaker 1: and medical professionals and Keith, as you look around the world,
Speaker 1: as you pointed out, and as Carol pointed on the introduction,
Speaker 1: truly a global company, you probably have some inputs that
Speaker 1: other CEOs don't have in terms of how this looks
Speaker 1: on the ground in different markets around the world. What
Speaker 1: are we missing, what should we know about maybe some things,
Speaker 1: And the way this virus is manifesting in the economic
Speaker 1: manifestation at different points of the globe. It's quite interesting.
Speaker 1: You're seeing the countries who have got out quite quickly
Speaker 1: on testing, quite quickly on contact tracing um and understanding
Speaker 1: the use of technology to be able to really manage
Speaker 1: it and manage the economic impact and open up parts
Speaker 1: of the economy. Also countries where they've got very close
Speaker 1: borders or you know, new Zealand's being put out there
Speaker 1: in Australia is coming quite well now. Um so countries
Speaker 1: that have been able to act quickly decisively on testing
Speaker 1: and shrink tracing had done a better job. And Kevin,
Speaker 1: the economy is going and it will be critical for
Speaker 1: the US to do that in Europe as well to it.
Speaker 1: And that's Keith bar the CEO of Intercontinental Hotels Group
Speaker 1: joining us from London. Obviously, Carol, no business or very
Speaker 1: few businesses have been changed like hospitality, right, and reminding
Speaker 1: us that tourism is responsible for one in ten jobs globally,
Speaker 1: so it has a big impact on the global economy.
Speaker 1: You can check out more of the interview in the
Speaker 1: magazine and check out the full interview that's online and
Speaker 1: also in our podcast feed. You're listening to Bloomberg Business Week.
Speaker 1: Coming up chef and owner of Crafted Hospitality, Tom Colligio. Yeah,
Speaker 1: talk about another industry that's been dramatically and maybe permanently
Speaker 1: affected by this virus. This is Bloomberg. You're listening to
Speaker 1: Bloomberg Business Week with Carol Masser and Jason Kelly from
Speaker 1: Bloomberg Radio. Well, today we're bringing you some the most
Speaker 1: important we help informative conversations Carol and I had on
Speaker 1: our daily radio show, Bloomberg Business Week, all about the virus.
Speaker 1: It remains top of mind, center stage for everyone, and
Speaker 1: we're talking about everything from the car industry to the
Speaker 1: business of food. One of those conversations was Tom Calichioh.
Speaker 1: He's chef and owner of Crafted Hospitality, a judge on
Speaker 1: Bravo's Top Chef, an advocate for the restaurant industry Jason
Speaker 1: He's shut down all of his restaurants in New York
Speaker 1: and l A temporarily laid off his workers. He said
Speaker 1: it was one of the hardest decisions he's faced in
Speaker 1: his forty years in the industry. We caught up with
Speaker 1: him about the impact and also the difficult way forward. Yeah,
Speaker 1: this has been devastating, UM, and not only for me. UM.
Speaker 1: I co founded the Independent Restaurant Coalition, and so I
Speaker 1: am in constant contact with UH many hundreds of restaurant
Speaker 1: turners and chefs across the country pretty much on a
Speaker 1: daily basis. And you know, we're we're struggling out there,
Speaker 1: and you know, Ppke, we thought was really going to help,
Speaker 1: and it doesn't, UM, because we're not open. I think
Speaker 1: PPP and structure for for businesses and maybe are somewhat
Speaker 1: depressed and they can hire their staff back, but there's
Speaker 1: still a revenue moving through their system. Right now, restaurants
Speaker 1: are closed. UM. Some are starting to open up in
Speaker 1: some states, but they're they're opening up into a really
Speaker 1: really depressed market and so p P P UM it
Speaker 1: doesn't really help us. And so we are asking for
Speaker 1: a restaurant stabilization package. UM. We're uh, we we sent
Speaker 1: our our letter to Congress. We're asking for a hundred
Speaker 1: and twenty billion dollars to stabilize our industry. So the
Speaker 1: eleven million employees that in a restaurants UM employee UM
Speaker 1: have a job to come back to, and not only
Speaker 1: have a job to come back to when we can
Speaker 1: finally get open, but we're going to be depressed for
Speaker 1: for until we find the VACKNE. So we're talking about
Speaker 1: another year almost And what we don't want to do
Speaker 1: is have a situation where people start coming back to
Speaker 1: work and then we're closing right you know, two months
Speaker 1: down the road, and everybody's back on unemployment to get
Speaker 1: or out of the job. Help us understand in in
Speaker 1: the short term, what's the response been what's what feedback
Speaker 1: are you getting in terms of what's feasible in order
Speaker 1: to help the industry. You know, I think they're hearing us.
Speaker 1: I mean I've spoken in many members of Congress over
Speaker 1: the last you know, three or four weeks, and so
Speaker 1: has so many members of our coalition, and they hear us, um,
Speaker 1: and they're they're trying to help us to try to
Speaker 1: figure out and and you know, obviously um uh, they're
Speaker 1: hearing from a lot of different sectors and people are
Speaker 1: looking for for uh uh for for help. Um. We
Speaker 1: just feel that we're uniquely positioned because so many people
Speaker 1: are employed by the independent restaurants. And then if you
Speaker 1: factor in all the farmers and fishermen and winemakers and
Speaker 1: cheesemakers and other various services that we are purchasing. Keep
Speaker 1: in mind, and every dollar that we take into a
Speaker 1: restaurant goes out the door. And so not only are
Speaker 1: you helping our business stay afloat and providing those jobs
Speaker 1: and the media jobs and workers, but also all the
Speaker 1: other people that that we are indirectly employ and neither
Speaker 1: these are small farms. We're not talking about big, mega farms.
Speaker 1: We're talking about small farmers. Uh, fishermen who are you
Speaker 1: know fishing, you know, dabot fishermen, small teethmakers and so um.
Speaker 1: You know, there's there's a desperation here. And again it's
Speaker 1: it's not just the restaurants that were concerned that you know,
Speaker 1: uh dis Beer Foundation did uh Um. You know, I
Speaker 1: have has data right now that maybe twenty of the
Speaker 1: restaurants won't open up. I'm hearing it's gonna be bigger
Speaker 1: than that. You know, we're hearing from from from the
Speaker 1: industry that maybe fifty restaurants won't open up. If that happens,
Speaker 1: think about the supply chain that it's going to actually
Speaker 1: end as well. So it's not just the eleven million jobs.
Speaker 1: It's it's probably million jobs and a lot of lots
Speaker 1: of people lobblihoods. I am curious. You do say, Washington's listening,
Speaker 1: So what's the likelihood that they do something in terms
Speaker 1: of a stimulus. And you're right, it's not just now,
Speaker 1: but it's what happens on the other side of this,
Speaker 1: because this is not a quick bounce back in our
Speaker 1: economic recovery. No, I mean some some industries I think
Speaker 1: we'll bounce that quicker than others. I think the restaurant industry,
Speaker 1: when we open up and mean we're hearing I mean,
Speaker 1: you know that we have to cut half of our
Speaker 1: tables out, and you know, then the question really isn't
Speaker 1: when we're going to open up. I mean there's this
Speaker 1: idea that George is gonna open up and texts are
Speaker 1: gonna open up and people are gonna go, No, it's
Speaker 1: it's not when we open up, it's when do people
Speaker 1: feel comfortable conjure getting a place that is busy. When
Speaker 1: you walk into your restaurant and the bartenders wearing a
Speaker 1: face mask and a waiter comes up to you and
Speaker 1: greet you with a face mask, you are not going
Speaker 1: to be comfortable eating in that restaurant. Dodger, did someone
Speaker 1: coughs when they're you know, even even with social distancing,
Speaker 1: I just don't see how that works out. So we're
Speaker 1: we're we're in there for the long haul. Um. And
Speaker 1: when I think Congress they're listening, Uh, they're they're listening.
Speaker 1: I don't I don't know if there's going to be action,
Speaker 1: and that's what we're hoping for. Yet they're hearing us. Um,
Speaker 1: we have you know, representatives, you know who are making
Speaker 1: sure that that our our needs are are are being heard.
Speaker 1: The question is whether or not Congress will act on this.
Speaker 1: That's chef Tom Collichio, an owner of Crafted Hospitality. Lady
Speaker 1: and Jason. You know, we've had a lot of conversations
Speaker 1: with well known chefs, talked with folks in the restaurant industry.
Speaker 1: I mean, it has been hit so hard and there's
Speaker 1: a lot of questions about how it comes back. Absolutely,
Speaker 1: I mean, and I think we've also learned a lot
Speaker 1: in talking to these chefs about the entire ecosystem. You know,
Speaker 1: obviously consumers, diners, folks like us, but the folks who
Speaker 1: work on the front lines. I mean, these are people
Speaker 1: who are incredibly in many cases economically vulnerable, and when
Speaker 1: you think about the broader economy you think about getting
Speaker 1: back to work, restaurants and food service is going to
Speaker 1: be at the core of that. You're listening to Bloomberg
Speaker 1: business Week. Coming up, we move to television. We hear
Speaker 1: from April Taylor. She's a co executive producer of Showtime's
Speaker 1: big hit show Billions, premiering season five this weekend. Alright,
Speaker 1: this is Bloomberg. This is Bloomberg Business Week with Carol
Speaker 1: Masser and Jason Kelly from Bloomberg Radio bring you some
Speaker 1: of the most important and informative conversations we had on
Speaker 1: our daily radio show, all of it about the virus
Speaker 1: and really about the impact. What does the future look like?
Speaker 1: And again a reminder they're happening in real time. A
Speaker 1: lot of news continuing to evolve around us. Well, one
Speaker 1: of the conversations we were really looking forward to Carol
Speaker 1: was with April Taylor. She's the co executive producer for Billions.
Speaker 1: She's worked in the business of television and film in
Speaker 1: and around New York for a long time. She worked
Speaker 1: on Sex in the City back in the day, so
Speaker 1: she understands the business. So she really understands not just
Speaker 1: the excitement around the season premiere. We talked about that,
Speaker 1: but also the dramatic impact this virus has had on
Speaker 1: the production of film and television in New York. Check
Speaker 1: it out. We as a group of New York producers
Speaker 1: came together. Um. You know, many of us had navigated
Speaker 1: the shutdown, UM, which was a rather hectic affair and
Speaker 1: UM scary time to live in. Realizing that um times
Speaker 1: we're going to change, and you know, we're all using
Speaker 1: terms like the new normal or you know whatever, UM,
Speaker 1: whatever your industry is attaching to. But we realize that
Speaker 1: there's going to have to be some substantial changes to
Speaker 1: how we how we make any TV film product going forward.
Speaker 1: And we're working really closely with the industry, with UM,
Speaker 1: all of our partners in the industry and with the
Speaker 1: CUOMO Task Force too, have discussions that are you know,
Speaker 1: guiding us into new solutions. UM. Those discussions are you know,
Speaker 1: obviously coming from a health and safety standpoint, looking at
Speaker 1: every aspect of our industry and what we do and
Speaker 1: how we do it. Uh. Those things are unique in
Speaker 1: New York, UM as they you know, are different in
Speaker 1: l A or in Atlanta or any other region. UM.
Speaker 1: We're focusing our efforts on this area that has had,
Speaker 1: you know, obviously such an intense outbreak and has this
Speaker 1: great density issue. So UM, you know, UH, there's really
Speaker 1: not gonna be any stone on turned. And the kind
Speaker 1: of conversations we're having are ranging from the basic PPE
Speaker 1: conversations that every industry is having to you know, how
Speaker 1: do we socially distanced while filming UM actors and people
Speaker 1: who are obviously vulnerable to not being able to wear
Speaker 1: PP on on a on a set. So, UM, we're
Speaker 1: just you know, going through all the factors right now. Well,
Speaker 1: and I do wonder I do wonder too, like like, well,
Speaker 1: will there be insurance liability questions that come into this?
Speaker 1: I mean, do the dynamics and the economics of the
Speaker 1: business also turn change April because of things like that?
Speaker 1: I think we'd be foolish to think, Uh, any industry
Speaker 1: would not be having intense conversations with regard to insurance
Speaker 1: and risk management and um, you know how we all
Speaker 1: look at our our employees and our companies. Um, these
Speaker 1: things are you know, the insurance the insurance business and
Speaker 1: their response to a pandemic. I don't think any of
Speaker 1: us have seen really what that's going to yield yet,
Speaker 1: but certainly there are a lot of considerations for people's
Speaker 1: privacy that are now being you know, discussed with respect
Speaker 1: to testing protocols that it might be implemented. Um, and
Speaker 1: you know all of the resulting you know, medical disclaimers
Speaker 1: and comfort level that we all have to have with
Speaker 1: sharing our personal information. UM. And that's you know, that
Speaker 1: extent that is so not a production issue, that is
Speaker 1: every company's issue. You are listening to Bloomberg business Week
Speaker 1: Excited to get back into our conversation with April Taylor,
Speaker 1: co executive producer of Billions that season five debut. It
Speaker 1: is right ahead of us this coming Sunday, May third.
Speaker 1: Couldn't be more excited, especially as I feel like I've
Speaker 1: been binging all sorts of things, but it's all been
Speaker 1: leading up to this, April, I gotta ask. I mean,
Speaker 1: this is a show that obviously we're both fans of
Speaker 1: me especially, and I was worried when it first came
Speaker 1: on that was going to feel like a little bit
Speaker 1: of a busman's holiday, given what we do for a living.
Speaker 1: And and yet it's a breakaway hit. I love it
Speaker 1: so many others do. Why do you think it is? Like,
Speaker 1: what is the zeitgeist that it's capturing here? I think
Speaker 1: from the business community, you know, there's a lot of um.
Speaker 1: The writers do a really cibeless job of, you know,
Speaker 1: harvesting some real life stories that kind of feed into
Speaker 1: um into the storyline, sometimes in a in a in
Speaker 1: a real way. Sometimes they're a little bit embellished UM.
Speaker 1: And I think that the rabbitat Tat kind of Tommy
Speaker 1: Gunn New York, fast talking noss of the nature of
Speaker 1: most of the characters in a big um attraction for
Speaker 1: many of us in the New York area in particular,
Speaker 1: but I think in general, um, you know that or
Speaker 1: the fact that the character's minds all works so fast
Speaker 1: and that they have these you know, machiavellian brains that
Speaker 1: kind of you know, out fox each other at every turn,
Speaker 1: building to this intri kid um story. Every season is
Speaker 1: something that is exciting and and that is entertaining well.
Speaker 1: And I gotta say, what's entertaining for us, April, no
Speaker 1: doubt about it is we'll be like, Okay, that feels
Speaker 1: like this corporate raider or this hedge fund individual. And
Speaker 1: you know, all of us who have been covering Jason's
Speaker 1: been covering it for several decades, me too, and so
Speaker 1: it's just great to kind of, you know, compare it
Speaker 1: to you know, reality. UM. I got a chance to
Speaker 1: catch up with Brian Coppleman and David Levine. They did
Speaker 1: a panel here at Bloomberg to talk about the series,
Speaker 1: and they had some great conversations about some of the
Speaker 1: real life folks that they talked to and anecdotes. How
Speaker 1: often are you guys, you know grabbing something from a
Speaker 1: headline or reaching out to somebody in the financial community
Speaker 1: to say, Okay, how would you guys play this? How
Speaker 1: would you do it? I think that the writers are
Speaker 1: doing that on a on a on a regular basis,
Speaker 1: And I think that a lot of the color of
Speaker 1: the show, um is having that kind of real insight
Speaker 1: that only people in the industry can grab onto and
Speaker 1: know is it is a true It's either a truth
Speaker 1: or heavily rumored um you know truth um. So I
Speaker 1: think that that's something that they're they're constantly doing and
Speaker 1: looking for, you know, exciting tidbits to throw in there
Speaker 1: that they know or a wink um or any you know,
Speaker 1: or any story as we call them. Well and April
Speaker 1: one of the other interesting things. And I think, just
Speaker 1: sort of going back to our broader conversation about New York,
Speaker 1: is New York is really a character in this show
Speaker 1: in many ways. And I know that. I mean, there
Speaker 1: was I believe it was the season premier last season, um,
Speaker 1: where Chuck is sort of going from place to place
Speaker 1: to place and it was almost this like treasure through
Speaker 1: New York City and you know, this restaurant and this
Speaker 1: place and this building it feels like you guys invest
Speaker 1: pretty heavily in this notion of making the city and
Speaker 1: its environs sort of a character fair, oh, extremely fair.
Speaker 1: And I think that's one of the you know, major
Speaker 1: appeals as a producer on the show. I think it's
Speaker 1: so appealing that we you know, get to go to
Speaker 1: all these great places, and that the writers you know,
Speaker 1: and the creators of the show, Brian and David, are
Speaker 1: New Yorkers, and that there is a real love of
Speaker 1: the New York News that surrounds all of these people
Speaker 1: and that helps define them and and you know color
Speaker 1: there their world, you know, the Upper East Side of
Speaker 1: you know, Chuck Senr and you know the cool Bobby
Speaker 1: Acat and you know, the different kind of environments they
Speaker 1: find themselves in, and Chuck being part of this sort
Speaker 1: of you know a lot of the old guarden riding
Speaker 1: the middle to a certain degree, um is just you
Speaker 1: know that it gives us a lot of opportunity, um
Speaker 1: to really showcase New York. And that's a lot of
Speaker 1: the reason why, you know, as as a passionate producer,
Speaker 1: you know, I was one of the people that jumped
Speaker 1: into this, you know, early effort to start make sure
Speaker 1: that we were going to revitalize New York film production
Speaker 1: as soon as we can. I have to say, right,
Speaker 1: is somebody who's you know lived, um worked in New
Speaker 1: York for such a long time. It is like such
Speaker 1: a wonderful postcard, um And and it reminds me of
Speaker 1: Sex in the City a lot in that you just
Speaker 1: went to the hotspots, the places that everybody was talking
Speaker 1: about or would be talking about as a result of
Speaker 1: including them in the show. Yeah. I mean I worked
Speaker 1: on Sex in the City for a season many years ago,
Speaker 1: and I my background is actually from locations, so I
Speaker 1: have a particular passion with respect to this subject. UM.
Speaker 1: But it was the first instance where people would call
Speaker 1: us and say, please come and film in our brand new,
Speaker 1: very high end restaurant, UM for you know, little or
Speaker 1: no money, just because the publicity became such a big
Speaker 1: part of that arians and UM Billions is not far
Speaker 1: behind that. I mean, we have we really do have
Speaker 1: a lot of recognition now and people like what it
Speaker 1: says when we've come and put them on the screen. Well,
Speaker 1: and I love I will say this is I don't
Speaker 1: want to go too far down a rabbit hole here,
Speaker 1: but um, the music also is unbelievable and uh it
Speaker 1: features just a lot of great music and not you know,
Speaker 1: the the obvious music. You know, Jason isbel drive by
Speaker 1: Truckers things like that, and I think a lot of
Speaker 1: that comes from from Coppleman especially. Um, I do have
Speaker 1: to ask you, like give us a preview of this season.
Speaker 1: What are we gonna see? We sort of saw, I believe,
Speaker 1: the sort of uneasy alliance at the end of last
Speaker 1: season between Bobby and Chuck. Am I remembering that right?
Speaker 1: It was? I think a very delicate a lot. And
Speaker 1: I think we see we see these two powerhouses with
Speaker 1: that are incredibly smart and have slightly different tactics and egos,
Speaker 1: you know, um make their way through this complicated maze. Again.
Speaker 1: I think everyone is going to find that there's um
Speaker 1: very very fun and exciting season ahead of them. That's
Speaker 1: April Taylor, the co executive producer of Showtimes Billions and
Speaker 1: for fans of the show, you know this weekend it's
Speaker 1: the season premier, season five of that show where as
Speaker 1: we discuss New York, it's really a character. Yeah, it's
Speaker 1: really a character, and it's really front and center for her.
Speaker 1: Really all of New York State where there's so much
Speaker 1: production that typically goes on but has been shut down
Speaker 1: by the virus. And with that, she is a founding
Speaker 1: member of the recently created New York Producers COVID Response Alliance. Jason,
Speaker 1: it's all about relaunching productions in New York State post virus.
Speaker 1: So she's thinking a lot and that group is thinking
Speaker 1: a lot about how do you come back? How do
Speaker 1: you do it? Uh, in terms of filming after the virus.
Speaker 1: And that wraps up the weekend edition of Bloomberg Business
Speaker 1: Week from Bloomberg Radio. Thanks so much for joining us.
Speaker 1: I'm Carol Masser and I'm Jason Kelly. Be sure to
Speaker 1: tune into Bloomberg Business Week Radio live Monday through Friday
Speaker 1: starting at two pm Wall Street Time. And if you
Speaker 1: can't catch us live, check out our daily podcast wherever
Speaker 1: you download podcasts. You can also watch the show live
Speaker 1: on YouTube. Just go there and search for Bloomberg Global News.
Speaker 1: We'll be back next week at the same time. This
Speaker 1: is Bloomberg