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1. Gains in US Jobs Market Threatened by Fight Against Inflation
The U.S. job market is on the cusp of returning to pre-pandemic trend levels of employment, but the question now is whether that victory could be short-lived, Reuters reports.
The issue is that the same policymakers who have fought to boost jobs now are battling "inflation by engineering an economic slowdown aimed at undercutting conditions that have been tilted heavily in favor of workers."
Michael Madowitz, macroeconomic policy director at the Washington Center for Equitable Growth, said Fed rate hikes could have "significant, uneven short-term impacts" on the labor market. It's expected the Fed will hold rates at its meeting this week but could decide on further hikes later in the year.
"Within the service sector, key industries such as health and education are short workers, a fact attributed in part to pandemic-era changes in people's preferences about work and the workplace. The leisure and hospitality industry remains about 350,000 jobs short of where it stood in February 2020, before the spread of COVID-19 forced the shutdown of many in-person services beginning that March," Reuters reports.
2. San Francisco's Troubled Tourism Industry
Hotels in New York and Los Angeles are recovering to pre-pandemic performance, but San Francisco hotels continue to struggle with keeping occupancy and room rates in line with 2019 levels as convention bookers shy away from the city and tech companies undercut employee travel, the Wall Street Journal reports.
According to data from CoStar's hospitality analytics firm STR, hotel revenue per available room in San Francisco during April was nearly 23% below 2019 levels. Park Hotels & Resorts announced it is ceasing payments on debt secured by the Hilton San Francisco Union Square and Parc 55 San Francisco, and STR notes more than 20 additional hotels in the city are up against loans that are set to mature within the next two years.
“The recovery will be slow,” said Jan Freitag, national director for hospitality analytics at CoStar. “I think if you are a CEO or the meeting planner who recommends to the CEO, it’s very easy to say, ‘Let’s just wait on San Francisco for another year.’”
3. Taylor Swift's Impact on Hotel Demand
As Taylor Swift's "Eras Tour" reaches its midway point across North America, hotel general managers say demand for rooms has been greater than during Super Bowls in host cities such as Nashville, reports Hotel News Now's Trevor Simpson.
“The top market in the Eras Tour so far in terms of performance lift was in Music City — Nashville, essentially the home field of Swift,” said M. Brian Riley, senior analyst at STR. “Over three nights, Nashville’s RevPAR more than doubled its normal seasonal levels, gaining a $132 nightly premium to average $263.”
To prepare for the surge of demand, Marc Sternagel, general manager of the Grand Hyatt Nashville, said this was the only time that time-off requests for management were not granted.
“I would say Taylor Swift was probably a triple Super Bowl for Nashville,” he said. “It was just three nights of craziness.”
4. Americans Flock to Europe
Destinations across Europe are up against "crazy" tourism levels this summer, CNN reports, and the craze could expand even further. Travel insurance provider Allianz Partners shows the number of Americans vacationing in Europe this summer is projected to surge by 55% over 2022 figures.
Steve Perillo, CEO of New Jersey-based tour operator Perillo Tours, added that demand for custom tours hasn't spiked this much since the 1970s. So far this year, roughly 96% of the operator's 500 annual departures, which include Italy, Spain and Greece as destinations, are booked. He expects it to reach 100% in the next few weeks.
"Hotel prices have surged, too. According to American Express Global Business Travel, hotel prices in Europe will experience the largest increases during 2023. Paris (up 10% year-over-year), Stockholm (9%) and Dublin (8.5%) are among the destinations AEGBT predicted to see the highest rises," CNN reports.
5. UBS Finalizes Takeover of Credit Suisse
Switzerland-based investment banking company UBS has completed its emergency takeover of rival Swiss bank Credit Suisse, forming one large bank with nearly $1.7 trillion in assets, CNN reports.
FINMA, Switzerland's financial regulator, said in statement Monday that the legal closure of the acquisition provides "clarity and stability for the two banks." UBS first agreed to purchase Credit Suisse on March 19 for 3 billion Swiss francs ($3.25 billion).
“It’s the start of a new chapter — for UBS and the global financial industry,” UBS CEO Sergio Ermotti and the lender’s chairman Colm Kelleher said in a statement published in the Financial Times and shared with CNN.