What Do Hotel Bookings Tell Us About the Economy?

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Feb. 20 (Bloomberg) -- Choice Hotels International President and CEO Stephen Joyce discusses the company's growth and Facebook's acquisition of WhatsApp on Bloomberg Television's "In The Loop." (Source: Bloomberg)

Given where the economy is.

Before we get to that, we were talking earlier about whatsapp.

I love that valuation.

We've launched a tech company called skype touch which is cloud data and we are providing other connections and other products.

If that is the valuation it should get, i am loving where we are going.

Anybody in teco has in a business like that is probably really happy today.

We are looking at what could be an all-time high on the s&p 500. there are concerns that this market has gotten frothy and people point to the lack of economic growth and ask how is it that stocks can be on this kind of tear.

What is your reaction?

My specialty is in lodging stocks and i think we are in for a several year run that will be pretty strong.

That's because of some fundamentals.

As mrs.

Jen -- businesses generally getting better and gdp is improving because we are the 99% middle america.

In addition to that, the supply/demand balance for the hotel business has been so favorable for the last four or five years because there has been no financing to build new hotels that that will propel the industry for another three or four years until inventory starts being applied.

Therefore the demand that is growing on the leisure side and the group customers started to come up, business travelers coming back, that supply/amend balance will make a good run for the hotels.

You feel the economy is on stable ground?

I do, i think we have gotten past the government nonsense and i don't think we will have another shutdown.

The lodging business in particular works on a couple of fundamentals.

It is an employment and gdp growth and then supply and demand.

All those look pretty good for the next up -- couple of years.

What happens if interest rates go up?

It just makes it more difficult to build hotels.

That will affect the growth of the industry.

That is positive for the existing hotel supply.

We have seen a lot of hotel ipo's this year.

Are we seeing a top because one would choose to go public at the top.

What is your reaction?

I think we are more in the third or fourth inning.

There is room left in this game.

I think the ipo's show a reflection of the optimism around the industry for the next several years.

I think ipo's are typically in the mid to end of the cycle.

People see the valuations reflect a strong run but people are optimistic about where the lodging business is going.

It sounds like you are optimistic and you believe we are in an environment where we will see growth and the market will correspond to that.

At least for our were business -- for our business.

That's a big barometer of things going on as a whole.

People don't spend money traveling if they are worried about their jobs.

Business travelers don't spend money or we'll figure out another way to do a mating by maybe videoconferencing.

If you see an uptick there, -- what about conferences?

They are coming back and there is expectation this year that the group customers will come back and that has been spotty for the last couple of years.

That is not a big issue for our company because we are smaller hotels that don't do a lot of group meetings.

We do smaller groups and we think that is encouraging for us.

That will add to the performance of the industry overtime.

You've got consumer confidence rising, you can see that in the personal debt numbers.

I think people feel good about their jobs and feel good about their companies and more people are getting work which is a positive thing for us.

We look at all those factors and say it will be a be a pretty positive year.

Let me ask you about the talk of a minimum wage of $10.10. you employ a lot of people and i imagine you have a lot of union workers as well in hotels.

$10.10, what will that do to the economy?

I believe in economic theory.

It says that if you artificially inflate wages, you will destroy jobs.

The cbo said 500,000 jobs in my concern is that does not include many things.

And our business, our guys are getting squeezed on health care.

There is a potential tax change and hopefully that will be positive.

So far it is not.

Their taxes have gone up significantly.

Then they've got issues around labor and wages.

As the economy improves, wages will go up.

If we artificially inflate them, their profit will go down and they will build fewer hotels because that's for the money goes.

Thatleesens the job growth.

From an economic standpoint, i understand the social interest to get more people out of poverty but i think it's a negative factor.

They said 900,000 people would effectively be raised out of poverty.

You are talking about a small

This text has been automatically generated. It may not be 100% accurate.

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