Business Leaders Prepare for an End to the Longest Period of Growth

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Is the travel industry the canary in the coal mine that signals a recession? Are media companies especially at risk when advertisers’ wallets tighten? It’s been almost five months since the inversion of the yield curve, an economic investment indicator that spooked Wall Street. But the effects on the U.S. economy and its effect on how advertising dollars are spent, remains unclear, especially as the country heads into a presidential election.

At this year’s CES, Adweek spoke with C-suite executives about their conversations around economic stability. We asked whether or not they’re prepared for an end to the longest period of economic growth in the history of the U.S.

These interviews have been condensed and edited for clarity.

Lindsay Nelson, president of core experiences, TripAdvisor
The interesting thing about travel is that there are a number of geopolitical, environmental, and economic factors that change how people travel.

It doesn’t necessarily stop people from traveling; their behaviors just change. For example, when Brexit was happening, there was a tremendous amount of uncertainty about where you could travel with your UK passport. It wasn’t necessarily that people would get fearful, stop spending and hold off (on vacationing), and certainly, that’s true in some cases. But oftentimes, it means they are going different places, planning to go further out or further in.

When there are massive fires in Australia, no doubt fewer people are traveling to Australia, including places where the fires have not affected. That’s how people react, and there will be a rebound. At TripAdvisor, we have some of the most scaled, real-time data about travel behavior. We will see before anyone else when people stop looking at Australia and when they start as an indicator of public perception.

The challenge is not so much the fear of a recession happening and to just assume everything constricts as much as it is. To understand if there was a recession, how does that change travel behavior and how can we facilitate?

Tim Mapes, chief marketing and communications officer, Delta Air Lines
The answer to that is based on the hour. I was about to go on a panel and three minutes before we walked on stage 12 missiles hit our two bases in Iraq, and then the market bounced back in the morning.

We’re a leading economic indicator, the same way corrugated cardboard is for shipping. Because we take reservations that far in advance, we know what the yield profile is, what the willingness to spend on premium tickets is. Business travel is a very good indication of the way businesses are thinking.

Peggy Fang Roe, global officer of customer experience, loyalty, and new ventures, Marriott International
“We are always cautiously optimistic. We have to be that way. Certainly, there’s a lot of conversation about whether there’s a recession and those conversations are happening in different parts of the world. Even in Asia, Hong Kong is really hurting but the rest of South East Asia is booming.

Being a global company, what’s great is that it balances us out. You don’t know how the U.S. is going to perform.

We’re cautiously optimistic that it’ll be good but we think Asia will continue to grow for the next ten years because of middle-class growth, because of the aspiration for travel, and because consumer spending is not necessarily linked to GDP, especially in that part of the world.”

Brian Sugar, president, Group Nine Media
I don’t think the operating plan that we’re proposing to our board is going to be any different based on the external factors. There may be a recession or not, or war or things like that. I think we focus on building a great scalable, profitable business, we can weather all of those storms.

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