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00:00What's going on? We're trying to figure out what's happening with the global economy.
00:03We're trying to figure out what's happening with the U.S. economy. There's a lot of talk
00:06about K-shaped economies at the moment. It's good at the top, bad at the bottom. What are you
00:10seeing? Okay, I think we are seeing this as you say economy worldwide is doing differently by
00:15region. Okay, very, very different trends. I think if you look to EMEA, for example,
00:19consumers back into travel after COVID. I think we are seeing business recovering,
00:25business travel and leisure also travel growing significantly. I think if you inside EMEA,
00:32you see countries like Italy, Spain, Southern Europe is doing particularly well. Germany is
00:37struggling a bit. The growth is not coming in line with the economy. And I think very strong
00:43growth in Middle East, in Africa and some of the destinations and very strong growth in Asia.
00:49China is not yet back to the growth levels that we had in the past, but actually is slightly
00:54recovering. And I think in the U.S., after a year where both inbound and outbound has not been
00:59growing significantly, we are seeing a slow recovery of around one, two percent.
01:03What do you think about this kind of idea of the K-shaped recovery? You've got upper end
01:08doing very well, bottom end of the market doing less well. Are you seeing that in your business?
01:11We are. We are. I think when you look across segments and you get, for example, countries like
01:16France, for example, where actually the four and five-star segment is recovering. Meanwhile,
01:21the one, two, three stars is not growing as much. Now, that is also linked to public spending many
01:28times. Many times the one, two, three stars are more linked to public spending, workers moving
01:35around the country. Is that true in the U.S. as well? It's also true in the U.S., yes. I think
01:40I think you see four and five more linked to higher end travelers and more leisure, leisure,
01:47leisure growth. Meanwhile, the lower segment is more on the normal business economy. Yeah. Well,
01:52sticking with the theme of the K-shaped recovery, talk to us about the labor market here. Are you
01:55finding it hard to hire right now? Yes. Are you hiring at all? Well, actually, we are. But actually,
02:00it's extremely difficult. I have to say and always say on this, I give an open invitation to any
02:05administration of the world to help us do it better. I think nearly in any country in Europe, for example,
02:12is we know and actually we could help to say how many people we need every year. If you would get
02:18all the hoteliers and the food and drinks business of the country, we could tell any government how
02:23many people we need in any simple year to fill up the jobs. And we could get organized to train them.
02:30I think, unfortunately, what we are lacking is lack of political decision to make sure that we get the
02:36right people in the right place. I recall years ago, we would we would be training people all over
02:42Europe. We were getting people in Germany, people in the UK or people in Spain where we would be
02:47bringing people from whatever the government would say that we could bring them and we could train them.
02:52And actually, I think that is something that I think is lacking more in Europe. I was I was two weeks
02:58ago in India where actually the government is establishing themselves programs like this where the
03:03hoteliers can go to training and recruitment centers where actually you go there and you say,
03:08I need 500. You will train them, you will get them and they will work. And I think I always say that
03:13actually hotel business is a business where in many countries of the world has been always an entry point
03:19to people into the industry and into society because usually I mean when you start, you don't need to use
03:24or master the language, but you can learn the language, you can learn the skills. So I think it's an open
03:28opportunity for whoever in the administration of any countries. Are you offering me a job, Federico?
03:32Yeah, it is. So I'm happy. I'm happy. We are happy. I think all the hoteliers to help them understand
03:37what we need. And I don't think it's that complex. Yeah. Okay. Well, in the face of those challenges
03:43that you're seeing really, you named India as one of the countries to address. What do you do in the
03:47absence of that with the people that you do have? Does that mean that the cost of labor goes up,
03:51that wages go higher, the benefits go higher? How do you keep the people you have? Yes, I think actually,
03:57actually, the two trends you're mentioning are right. Costs are increasing, not only cost of the labor
04:03we employ, but also cost of energy has been increasing significantly. Obviously, we are trying,
04:08I think, all over to try to optimize any function in the back office to try to reduce the amount of labor
04:15we need. But actually, you still need the people in front of the consumer to do a good job and to train.
04:20So we are trying to cope with those costs and trying to absorb them from within to make sure that we still
04:26deliver the profitability we have to. You talked about the different areas of your business that
04:29are growing, Federico, and you said Asia is really growing. Where are the biggest opportunities for
04:36you as a business? Well, I think opportunities, I think we are very happy because I think beyond Asia
04:42growing very well, I think we have opportunities all over the world. I think even, for example, in more
04:46mature markets like Europe, I mean, we are growing significantly well in Italy. We are growing very well in
04:52France. We are growing very well in Spain, also in the UK. So I think even if Europe is growing less,
04:59I think big opportunities. I think in Asia, I mean, all Asian economies are growing and in terms of
05:06hotels. But I think there are two sectors. One is resorts are growing significantly. We are happy to
05:12have more than 170 resorts in the world. And actually, we see all over Asia the resource business
05:17growing nearly exponentially. So that's good. I think second is India possibly one of the markets
05:23where the largest growth opportunity exists. We are the number two company in India. But actually,
05:29we see you have 1.5 billion people. The middle class is growing. And actually, that after the middle
05:35class growth, you have the travel, both in leisure and business. So I think India is a huge business
05:42opportunity. Federico, you talked about the labor story. You talked about the absence of labor,
05:46the labor you need. One of the things that this industry looks kind of vulnerable to or has an
05:53opportunity to do is to bring in AI. Yes. How much are you spending on AI right now? How much do you
05:58think it's going to change your business? How does it change your business? Yes. I think what we know for
06:03certain is that it's going to change the business. Yes. How we are not yet. Okay. Okay. So that you
06:08haven't figured out yet. No, I think I think there are obvious areas. You know, I was actually last
06:12week Monday and Tuesday was with the Google team in New York. Yep. Reviewing actually everything
06:16Google is doing, everything that is happening and how it would affect and what are the solutions they
06:21are building. Actually, there is there is an obvious area where you look to all the back office,
06:24all the administration, all the repetitive tasks we have that will be reduced. What will help
06:29eventually, you know, some of that labor scarcity that we have. But I think the biggest one is,
06:34I think is going to enable us to step change the level of personalization. Right. Well,
06:39when you think about what AI can bring is identify in a much better way. Who is the different targets?
06:45What what is the sweet spot that you need to do to step change that experience? So how's that going
06:51to check? I'm checking into a hotel. I'm staying in one of your hotels. How's my experience going to
06:54change? I should be knowing I should be knowing much better what you what you need and what you are
06:59looking for and be able to offer that automatically today. So then I like it. I have to say it's one
07:05of the things I like of hospitality. So we need to see how we balance. I like also to have the intuition
07:10in the person in the reception when they look to your eyes and they say, OK, what is this person
07:15willing to do that? That intuition is is worth a lot of money. OK. And I want to lose it. But I think maybe
07:21in 50 percent, 60 percent of locations, you will have that nearly automatized. So we can add a bit
07:27more sugar. So AI is a mind reader, basically. Yeah, basically. So you have intuition. It's a mind
07:32guessing. Intuition plus data equals better service. That's right. I think so. So far, it has been more
07:38intuition. Yeah. If you apply some data, but you keep the intuition. What I want to avoid is machines.
07:44Right. Yes. So no automated check in then just yet. Federico, you mentioned that the hotel sector can be an
07:49entry point for people in new cultures, new environments. And there are a lot of people
07:53living abroad in the hotel sector, working in the hotel sector. And you've been you've written about
07:57this some 10 years ago. You wrote about this about working abroad. You've got a new edition of your
08:01book out. And I'm interested that you've added a chapter on working with China and working in China.
08:06And I wonder what it is that you've learned over the intervening period that you thought was important
08:10to say. Well, I think you're right. I mean, actually, when when I wrote the first edition 10 years ago,
08:15I had been acting more with U.S. with U.S. I had worked for Disney. I had worked for Procter. And then I had to
08:22work in obviously more in Europe, a bit less in Asia. And I had never worked with Chinese. Then when when I came
08:28into into Russia, I spent I decided to spend time with with Chinese in China. And I think it's a culture
08:34that we we know less. I think I think obviously when when we have been trading and we have been, you know,
08:41having discussions and dinners and lunches with American people with countries from all over Europe.
08:47But I think with Chinese is is is less common. So I think I think it was worth to share some thoughts.
08:54I think the obvious one is just communication. I mean, I think when you work with a Chinese culture,
09:00communication is never direct is in direct communication versus Europe and the U.S. where the
09:06communication is much more direct. And that leads to a huge amount of confusion because obviously it's
09:11less is less easy to get a yes or a no. You may get the yes and the no, but you don't know really how.
09:17OK. And on the contrary, when you say yes or no in a very direct way, it may create some confusion.
09:23So I think there is a big part on on on on communication. And I think I think there's also something
09:28that I think from a European mind point of view for me was mind blowing is if I think China or I mean
09:35it's very generic statement, but I think the the Chinese as a population, they have a collective idea
09:42about China that is bigger than what we usually have as our own country. OK, they think of China as
09:50something a collective mission. I don't know if I can say that this is different to what actually is more
09:56individualistic in the case of Western Europe or the U.S.
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