Economic Risks and Opportunities Ahead

Shawn DuBravac is the New York Times bestselling author of Digital Destiny: How the New Age of Data Will Transform the Way We Work, Live, and Communicate. He is also the president and founder of Astra Insights, which provides consulting, research, and advisory services on topics such as digital transformation, technological change and business model disruption.

DuBravac will put those experiences to good use at HSMAI’s ROC 2019 in Minneapolis on June 18–19, where he’ll present a breakout session titled “The Outlook: What Are the Economic and Geopolitical Risks and Opportunities Ahead?” A widely published author and highly sought-after commentator due to his background in the fields of finance, technology, and economics, DuBravac recently spoke to HSMAI about what to expect from his presentation at ROC 2019.

What is your presentation going to be about?

There are a number of forces — trade is of paramount concern now — that are affecting very diverse industries. The overarching theme is that you’ve got uncertainties that you’re dealing with. We are just short of being in the longest expansionary period in history, although it hasn’t always felt that way.

This brought a lot of uncertainty in December, when we had a stock-market reaction. There was a lot of concern that recession was imminent and discussion that a recession would hit the U.S. in 2020 or late 2019. In recent months, economic data has improved, so the chatter and worries around recession have slightly declined, but there probably is still a case to be made that we shouldn’t get too comfortable or stop worrying.

In the hospitality sector, things look really good right now. We’ve had a period of metrics all going in the right direction, and in order for those to continue to go well, you need an environment where consumer and business sectors are healthy, so these risks on the horizon pose some risk to that.

Trade and trade wars are the biggest concern to companies. We’ll soon move into a period where the [2020 presidential] election dominates the media dialogue and creates some uncertainty. Any time we have these, we have a period where companies are hesitant to make investments.

What do you hope people take away from your presentation?

There are four main takeaways:

  1. I want to provide an economic update. We enjoy relatively strong economic dynamics in a number of areas. The labor market looks very good. We have a strong labor market and a consumer that feels optimistic, so that bodes well for spending.
  2. Point two is that we’re in the midst of a historic expansion. Whether or not that expansion continues is something that will be hotly debated over the next year, as well as the implications.
  3. The third point is that trade wars especially pose a significant headwind. There are a lot of uncertainties which cause businesses to rethink investments and cause consumers to retrench and hold back on spending.
  4. Finally, as we move closer to the election, it will create uncertainties that will influence the economy.

How does this relate to hotel revenue optimization?

Revenue optimization in hospitality is driven by external factors, and there is tremendous uncertainty over the next 24 months on the directions of these external forces. All of these points dictate the environment over the next 24 months, and that will influence occupancy rates, investment decisions, and impact the consumer side, but also the supply side of investments that the hospitality industry faces. The economy will significantly influence what consumers do as well as what businesses in hospitality should do.

Categories: Conferences & Events, Revenue Management, Forecast
Insight Type: Articles