Airline and hospitality CEOs say they see signs pointing to a much more rapid business travel recovery than generally expected.
Good morning.
As business bounces back from the pandemic, there are two areas expected to lag—commercial real estate and business travel. In our latest CEO poll, conducted in collaboration with Deloitte, half the CEOs responding said they plan to reduce their real estate spending over the next twelve months. Only 10% see an increase. Why spend money on big city real estate if your employees are spending half their work time at home?
But on business travel, the message is more mixed. Some 55% see an increase in travel costs over the next 12 months, while only 28% see a decrease. That, of course, could mainly reflect depressed travel levels during the pandemic. But I am also hearing daily about business leaders who have returned to the road. And both airline and hospitality CEOs say they see signs pointing to a much more rapid business travel recovery than generally expected.
“Leisure travel is three times the size of business travel and is coming back faster,” says Stephanie Linnartz, president of Marriott. But business travel is showing signs of life. In particular, she says, “for 2022, our group business is looking quite bright. People are booking sales incentives meetings, trips of that nature. People have realized that Zoom, Teams, doesn’t replace face-to-face.”
“The best data point is what happened in China,” Linnartz adds. “In China, our business has come back in all segments to 2019 levels.”
By the way, on Friday I passed on a bad link to the poll results. You can find them here.
Separately, Fortune benchmarks business success in a lot of different ways. We have the Fortune 500 list, Fastest Growing Companies, World’s Most Admired, 100 Best Companies to Work For, and more. But my personal favorite is the Change the World list, which focuses on companies that use their profit-making superpowers to address pressing social problems.
We are taking nominations now for the 2021 Change the World list, which will publish in October. If you know a company that deserves the honor, you can use this form to nominate it. If you have questions, send them to Matt Heimer and Erika Fry at changetheworld@fortune.com.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
Facebook antitrust
Facebook's stock leapt more than 4% yesterday after it won the dismissal of two antitrust cases—one federal; one brought by a coalition of states. A Washington judge decided the FTC hadn't sufficiently demonstrated Facebook has a monopoly in social networking. Over to the legislators, then. Fortune
Google antitrust
The Biden administration is reportedly actively pursuing the Trump-era probe into Google's digital ad market practices. The decision about suing Google (again, as the Justice Department is already suing Google over its search practices) will rest with whoever Biden installs as assistant attorney general of the DoJ's antitrust division. Fortune
Cruising downwards
Cruise ship companies' share prices fell yesterday after passengers on a Royal Caribbean vessel tested positive for the coronavirus. The two guests who tested positive were both under 17 and unvaccinated, but investors took fright. Fortune
Crypto caution
Mexico's central bank has maintained its ban on financial institutions trading or offering services based on cryptocurrencies. Banxico's intervention followed a tweet by Banco Azteca owner Ricardo Salinas Pliego, in which he said his bank was preparing to accept Bitcoin. Fortune
The race to remake work According to the latest 2021 Fortune/Deloitte CEO Survey, talent is the biggest challenge CEOs are facing today. Deloitte US CEO, Joe Ucuzoglu, provides his thoughts on the race to reimagine work. Read more
Charging imbalance
A whopping 70% of Europe's electric-vehicle charging points are found in just three countries: the Netherlands (which has 30% of the EU's entire charging network), Germany and France (which each have around 20%). Auto industry trade body ACEA warns that poorer countries will be left behind by EU policies pushing the shift to electrification. Financial Times
Parachute cryptopants
The Fed's vice chair for supervision, Randal K. Quarles, has warned that the rush to create central bank digital currencies (CBDCs) is a fad, like parachute pants in the 1980s. Quarles said he would "have to be convinced" that a U.S. CBDC is worth the effort. New York Times
Finance pride
The "clout of corporate America" was central to promoting LGBTQ pride in the U.S., writes Zach Buchwald, head of the institutional business for the U.S. and Canada at BlackRock, in this piece for Fortune: "Authenticity is a badge of honor in our industry, and for the LGBT community that is measured not just by rainbow logos during Pride, but by hiring practices, HR policies, culture, stewardship, and community activism." Fortune
Zuma sentenced
The former South African president Jacob Zuma has been sentenced to 15 months in prison by the country's highest court. The sentence is not about the myriad "state capture" corruption allegations against him—those still need to be fully resolved—but about contempt of court, after he refused to show up at the state-capture inquiry that he himself launched a few years ago. BBC
This edition of CEO Daily was edited by David Meyer.
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