No amount of recession warnings are going to stop Americans from having an absolutely lit summer. Let's get into it. By Allison Morrow |
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| | Last updated May 15 at 7:43 PM ET | |
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Leave it to Americans to take a look at the clouds on the horizon — there's probably a recession coming later this year, one that would be made extra bad by the financial sharknado that would form if the banking crisis collides with the debt ceiling — and say screw it, we're going to the beach. Here's the deal: The leisure and hospitality sectors of the economy are thriving three years after the pandemic gutted restaurants, hotels, bars and airlines. As my colleague Bryan Mena reports, the sector is just 2.4% shy of their February 2020 levels. And it's not even summer yet.
Leisure and hospitality is expected to fully recoup its Covid-related job losses this year as Americans splash out for travel, dining and a bunch of other in-person experiences that were either missing or curtailed during the peak of the pandemic.
Americans are antsy. See here: - Nearly 3 million of us took a vacation from work in March, the highest number for that month on record. In the first three months of the year, the eight largest US airlines, which between them control 95% of the nation's air traffic, were essentially back to the level of traffic they had in the first quarter of 2019.
- The four largest US airlines — American, United, Delta and Southwest, which control 80% of the market — reported either record cash flows or first quarter revenues, some of it due to higher fares. They're all projecting strong bookings for the summer.
- Restaurants are also getting a boost. A recent survey from OpenTable found that 66% of respondents dine out at least once a week, and 33% said they were eating out more than they did six months ago.
Why the sudden splurge?
For one, wages are higher and inflation is cooling, leaving a lot of folks with extra cash. Plus: Housing is almost comically unaffordable. Maybe you've been saving to buy a house for the past 10 years only to see the dream drift out of reach amid low inventory, high demand and high mortgage rates. You could wait the market out and keep saving and hope for the best. Or you could skim a bit from the cash pile and take the family to Cabo. There's also a generational shift in how we prioritize spending. Younger people are putting experiences above saving for a home or car. "The pandemic did result in a permanent shift in preferences, particularly for younger generations," said Jeanelle Johnson, partner and co-leader of the travel, transportation and hospitality sector at PricewaterhouseCoopers. "People used to create a bucket list of what they'd want to handle during retirement, but now they're saying 'why wait until retirement?'" Of course, all that demand for service has strained restaurants and hotels that have historically relied on low-wage workers. With unemployment near its lowest level in a half-century, service industry managers say they're struggling to hire enough staff to meet demand. Bryan has the full story here. |
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Turkish stocks and currency tumbled Monday after neither candidate in the country's fiercely contested election secured enough votes to avoid a runoff. The high-stakes vote, set for May 28, will ultimately decide the fate of a key NATO ally and regional power broker at a time when Russia's invasion of Ukraine has plunged much of the world into uncertainty. Longtime leader Recep Tayyip Erdogan will face a second round of voting with only a narrow lead over his rival, Kemal Kilicdaroglu. Turkey's benchmark index fell sharply, prompting the Istanbul exchange to briefly halt trading. The Turkish lira — which lost more than 40% of its value as a result of Erdogan's unorthodox policies — slipped 0.5% to a record low of 19.70 against the US dollar. |
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| My CNN Business colleague Nathaniel Meyersohn may have just won the award for the Most 2023 Lede of the Year. And it's only May. Here it is: Pickleball is coming to your local mall, replacing shuttered Bed Bath & Beyond, Old Navy, and Saks Off 5th stores. That's a sentence that three years ago would have sounded like gibberish. Bed Bath & Beyond closed? What is Pickleball? you would have asked while kneading your latest batch of sourdough in between episodes of Tiger King, wearing the same pajamas that have become your lockdown uniform. Anyway, here's the deal: Shopping malls, those institutions that seem to keep defying expectations of their imminent demise, need new tenants to replace some of the retailers that have been going under lately. And what do people want? Pickleball, apparently. The game, which combines elements of tennis, badminton and ping-pong, is America's fastest-growing sport. Its backers are legion, but there's a dearth of suitable space for courts. (As Nathaniel, our pickleball correspondent, has reported before, a lot of people really hate the pop-pop-pop sound of pickleball and have tried to keep it far away from the places where people play, like, real sports.) Point is: Malls have space and not enough people. Pickleball has people and not enough space. Voila. One group called Pickleball America is taking over an 80,000 square-foot anchor space in Stamford, Connecticut, in a former two-story Saks Off 5th retail store this summer. It's set to become one of the largest indoor pickleball venues in the United States. The Meadows at Lake Saint Louis, an outdoor mall, plans to fill the space once occupied by Bed Bath & Beyond with a pickleball club. Pickleball facilities have taken over an old Burlington store in New Jersey and an Old Navy in New Hampshire. Bottom line: Traditional brick-and-mortar retail has been in decline for years, and the pandemic only accelerated that. For malls to stay in business, they're looking to more experiential offerings — pickleball, breweries, skydiving simulators, etc — to avoid being completely hollowed out. |
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Last updated May 15 at 4:00 PM ET | |
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