Summit Notebook
Exclusive outtakes from industry leaders
Looking forward to inflation
By Tim Kelly
Yoshiharu Hoshino, the president of Hoshino Resort, one of Japan’s leading resort operators, is looking forward to a dose of inflation after years of sliding prices.
By engineering a rise in rates by printing money, he reckons Japan can make a big chunk of its burgeoning national debt disappear, which along with tax hikes is, he predicts, likely the way Japan is going to exit a potential crisis as debt soars to more than twice its gross domestic product.
While having the nasty side affect of making assets worth less tomorrow than today, if, like Hoshino, you borrow money to buy the bricks and mortar of hotels, the plus side is your debt, relative to your cash flow will also get smaller as long as you have low rates locked in.
“It would be a very big plus,” said Hoshino told the Reuters Rebuilding Japan Summit in Tokyo. Japan defaulting on its debt is unlikely, he said.
Resort owners who agree with Hoshino, who already own 27 facilities in Japan, may therefore be tempted to borrow more to buy more and wait for robust inflation to pay the loans back.
Are the days of flying business and 4-star hotels over for biz travelers?
Are flying coach and staying at budget hotels the “new normal” for businesspeople who travel for work? If so, what does it mean for airlines, hotels and casinos still trying to recover from the economic downturn? Chris Woronka, Senior Gaming, Lodging and Leisure Analyst at Deutsche Bank Securities shares his thoughts with us on what’s in store for the Travel and Leisure Industry in 2010. Will the industry once again be flying high? Or, will the prospects for a better year ahead get grounded?
Indeed, due to a global financial crisis, some companies have removed expenses that is not essential for them(like traveling privileges). Travel and Leisure Industry should really sought things out and find measures to help resolve their problem or figure a way to avoid bankruptcy especially for the small players.
