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Quest Means Business
U.S. Markets Bounce Back After Dismal Week; T.S.A. Reports Highest Number of Fliers Screened Since Pandemic Began; Spectators from Japan will be Allowed at Olympic Games; France To Reopen Nightclubs, Concerts and Festivals; Hotels Face Staff Shortages As Travel Demand Returns; Aired 3-4p ET
Aired June 21, 2021 - 15:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ISA SOARES, CNN INTERNATIONAL HOST: It is a jubilant start to the week as the Dow soars more than 500 points. Let's have a look at the big board for
you this evening. Look at that, 558 this Monday.
Those are the markets, and these are the main events.
The bulls are back on Wall Street after one of the worst weeks for U.S. stocks since October
Tokyo Olympic organizers say thousands of fans will be allowed in the stands as health officials warn against it.
And American Airlines is canceling hundreds of flights claiming they can't hire employees fast enough to meet the surge in demand.
Live from London, it is Monday, the 21st of June. I'm Isa Soares and I, too, mean business.
Good evening, everyone. Happy Monday.
Tonight, volatility reigns on Wall Street as U.S. market comes roaring back. We'll show you the big board. The Dow is set to snap its longest
losing streak since January. Five hundred and sixty points we are seeing right now. It's up more than 500 points, more than 1.5 percent and it
closed in the red, if you remember, five straight sessions last week.
The broader S&P and the NASDAQ are also making gains -- we will show you those as you can see, they are almost up one percent on the NASDAQ and the
S&P, one and three tenths of a percent. Value stocks have been out pacing growth stocks as investors gauge really the Fed signals on interest rates
and the growing evidence of strong U.S. economic growth.
Paul La Monica is in New York for the very latest to make sense of all of this. And Paul, as we look at those numbers, we are seeing a rebound after
what has been a bruising few weeks. Is optimism back? I know there is a bit of volatility there as well.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, I mean, I think when you look at today, there wasn't a lot of news to justify this huge rally. It's a
quiet day on the earnings and economic front, but we'll take it. All 30 stocks in the Dow at last check were higher. There were only about 20
stocks in the S&P 500 that were in the red today.
And as you pointed out, Isa, clearly a lot of cyclical companies leading the rally today with energy, oil stocks doing extremely well. Banks also.
But every sector in the S&P 500 is in green. So, this is a broad-based rally. There aren't many losers at all on a day like today.
SOARES: But Paul, what has changed since you and I spoke on Friday. Because like you said, there hasn't been any new voices when it comes to -- or
regarding the Fed, only dot plots. So, what has changed besides having a Saturday and Sunday for everyone to take stock?
LA MONICA: Exactly. It's a great question. I think the sentiment, obviously, has changed, even though the data has not. Investors are going,
I think, for the foreseeable future to have this continued tug-of-war over whether or not the improving economy is a good thing because people are
returning to the workforce.
They have more money in their paychecks from stimulus or just returning to their jobs and their spending. That's, obviously, good, but if this creates
inflation and the Fed has to nip it in the bud by tapering more quickly and raising rates more quickly, then that's the negative aspect of the
improving economy and I don't think there's going to be any resolution any time soon.
We have Jerome Powell speaking later this week. That's going to be very interesting. I think everyone will be paying extremely close attention to
what he says about the inflationary outlook.
SOARES: Yes, it's a fine balancing act and everyone will be listening to what Powell has to say on Wednesday, but those you have been speaking to,
Paul, how strong is the view that the Fed either needs to move quicker or the Fed is somewhat behind the curve here.
LA MONICA: Yes, I don't get a sense from that many people that the Fed is behind the curve yet. There are two risks, though, Isa. One is that the Fed
does wait too long to start raising interest rates and tapering and then they have to aggressively, quickly act. That would be a problem.
And then there are some who think that maybe, you know, especially since we saw that one dot that, you know, Jim Bullard, the St. Louis Fed had
admitted that he thinks maybe a rate hike could be in the cards next year, maybe that's too soon, and that other Fed members start to think that they
should raise rates at the end of next year instead of waiting until 2023.
Maybe they're acting a little too quickly to take away that punch bowl and that could put a crimp in the economy that we don't want or need right now.
So, no one really has a great resolution or great consensus about whether the Fed is going to act too quickly or too slowly, but that is the concern
that they are going to get this wrong, a policy error could lead to a market pullback.
SOARES: Yes, of course, and the recovery needs to be strong, it needs to be long, it needs to be sustainable. So, really, it is balancing it all out.
Paul La Monica there for us. Thanks very much, Paul. Good to see you this hour.
SOARES: Well, happening this hour in fact, in the Oval Office, if we can bring you those live pictures if we have them, the U.S. President is
meeting with his economic team, including Treasury Secretary, Janet Yellen, as well as Federal Reserve Chair, Jay Powell.
He is getting an update on the state of the country's financial systems and institutions following their first international trip last week. The Biden
administration is now preparing a massive push to pass an infrastructure plan at home. And it comes at a key moment for the U.S. economy, as Paul
and I were discussing as it moves into a post-pandemic phase.
You have inflation fears which are rampant that is keeping investors and economists on edge. You heard Paul La Monica talk about that. Then you have
American Airlines, they have canceled flights even though demand is hitting new heights and that is in part because they can't find enough workers.
That's a real problem, labor shortages.
And then businesses large and small are getting hit by supply chain disruptions and interruptions, which are squeezing profit margin. That
because COVID still, of course, rampant in other parts of the world.
Mark Zandi is a Chief Economist at Moody's Analytics and he joins me now. Mark, great to have you on the show. I am going to pick up, if you don't
mind from our discussion with Paul La Monica. We are seeing -- I know there's a lot of volatility, but we are seeing one of the best days in the
-- for the Dow in a while. What do you make of all the volatility following on from the Fed's guidance? What is your reading of it?
MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Well, I think we need to look through all of this ups and downs and all around. You know, we were
down big on Friday, we are up big on Monday. So, the net of all of that is we're not going anywhere fast. And I think that's the point.
I think as long as the prospects are that interest rates are going to rise and then actually do rise, it is hard to see the stock market going very
far very fast. So, you know, there's going to be a lot of up and down all around, day by day, but cutting through, I don't think we'll go anywhere
fast for a while.
SOARES: So, let's look at the micro. I mean, it is a very difficult needle to thread for the Fed, kind of a mouthful of that -- you know, we've got
signs of a strong economy, we've got high inflation, fiscal and monetary support and there are questions as to how the economy will respond once
tapering begins really.
Do you think the Fed can tighten without creating some sort of negative effect here?
ZANDI: Yes. I mean, it is a bit -- I think you said threading the needle.
ZANDI: So, it's going to be a bit tricky -- of course, we have a little bit of history here. You go back after the financial crisis in 2013, then Fed
Chair Bernanke started talking about ending their quantitative easing at that point and markets had a hard time with that. Interest rates rose
quickly. The stock market declined.
You know, it is easy to do. But, you know, they have that experience. So, I think they have a better cookbook today than they had about 10 years ago.
So, I think they'll pull this off, but it's going to be tricky. It's not easy.
SOARES: I heard -- I was hearing Secretary Mnuchin -- former Treasury Secretary Mnuchin say today, Mark, that the markets are underestimating the
inflation risk. What is your view?
ZANDI: Yes, I think that's probably right.
ZANDI: I do think we will get a fair amount of inflation here going forward and the rate of inflation is going to be an issue. And you know, in most
typical times, I'm not sure that's a big deal for markets, but markets are very highly valued. They've come a long way in a very short period of time.
Valuations are very stretched.
There are signs of speculation. I mean, meme stocks and Archegos and SPACs. These are signs of a market that is very frothy. So, if you anything
doesn't stick to the script, then inflation may not stick exactly to script, then that will be a problem for the stock market.
So, I do think it is vulnerable to higher rates of inflation or anything else that could go wrong.
SOARES: Yes, and at the same time, as we have those inflation concerns, we keep hearing the economy is roaring back. But so much of it, of course, is
supported by fiscal and monetary support. How real is that roar really?
ZANDI: The monetary and fiscal support is massive. It is key to driving the economy's growth, and the economy is very strong. And you know, I think we
do need to step back a little bit. I mean, it is good news that the economy is creating lots of jobs and it feels like we are going to get back to full
You know, the side effect of that is the higher rates of inflation and potential for uncomfortably high inflation down the road. But you know, I
take it. I think it's a good thing to get back to full employment as fast as possible, particularly given what we've been through over the past year
or year and a half.
SOARES: Yes, you bring up a good point, Mark, and I was wondering if you can explain this, you know, make sense of this economic picture for our
viewers around the world. We still have millions of people who aren't employed and millions of jobs without workers. Why are we seeing this
ZANDI: Well, the economy is reopening very quickly and all kinds of businesses all at once have put up the proverbial "Help Wanted" sign and
said, hey, I need you to come into work. And you know, people have lives. I mean, they've got things going on. They've got to rearrange things to get
back to work, put kids back in school and child care; their parents, their elderly, you know, what will I do with -- to take care of them?
And you know, many people lost their jobs permanently. Their former employer bailed during the pandemic, so they've got to have to find a new
job and that doesn't happen in a day, a week, maybe not even a month or two. It takes a little bit of time.
So, we'll sort this all out and I think by fall, September-October, you know, things will settle back in. But you know, between now and then, it is
just going to feel a bit uncomfortable and inflation is going to be high. But yes, again, at the end of the day, this is a high-class problem to
We want jobs. We want growth. We want to get back to full employment. That's the number one objective here.
SOARES: So, by autumn we should be seeing a slightly brighter picture there. Mark Zandi, great to have you on the show as always. Important,
thanks very much, sir.
Now, a sure sign of the post-pandemic recovery, there is more traffic at U.S. airports. The T.S.A. announcing this morning that its offices screened
more than 2.1 million people in airport checkpoints across the country on Sunday. That is the highest number since the pandemic began. Still down
though 25 percent compared to daily traffic two years ago.
Some airlines are having trouble just keeping up. American Airlines canceled 150 flights on Saturday and expects to cancel 50 to 80 flights a
day through at least mid-July.
Two years ago, American only canceled about 11 flights a day on average. Just to give you a bit of perspective. It is blaming this month's
disruption on labor shortages, surging demand, as well as bad weather.
Pete Muntean joins us now live. And Pete, this is -- I mean, this is incredible that this is happening right now. We have restrictions opening
up. Americans getting vaccinated. And people really preparing trying to get organized to go on holiday. So, explain to our viewers why this is
happening and only happening to American and not happening to other airlines crucially?
PETE MUNTEAN, CNN AVIATION CORRESPONDENT: It is so true, Isa, and so many passengers will be so surprised by this because airlines here in the United
States have been so surprised by the sheer volume of people coming back to travel. You mentioned the T.S.A. numbers from Sunday, 2.1 million people
passed through security at America's airports in one day alone.
That is the highest number we have seen since March 7th, 2020. The fifth time we've seen a number higher than two million this month alone, and
that's so critical because that number is about 75 percent from where we were back in 2019, pre-pandemic. So, the number just keeps going up and up.
And now American Airlines says it is struggling to keep up with this major surge in demand. It says it has had problems with the weather, it has had
problems with staffing issues, and maintenance issues, so it had to cancel about six percent of its flights on Sunday, about 188 flights individually.
But it is taking this one step further, taking a proactive measure, cancelling about one percent of all of its schedule from now until mid-
July. That accounts for 50 to 80 flights each day.
This is so significant because the airline is trying to get people to come back and they're going to have to push some people away. They're still
trying to minimize the impact here, though, to make sure that people aren't too inconvenienced by this.
SOARES: That's quite a significant cancellation, 50 to 80 a day. Do we know, though, Pete, what areas they are short staffed? I mean, are we
talking pilots here? Are we talking fueling services?
MUNTEAN: Well, it is so interesting. The crews are the big issue for the airlines trying to get them in the right spot. And airlines really drew
down their operations in a big way because of the pandemic, because things were so depressed. They didn't have the passengers and the demand there.
Now, the demand is back up, there's a bit of a lag. A bit of a rubber band effect for people trying to come back to the airline who may have been
sidelined because of the pandemic. So, it's the airline employees themselves.
The airline is also blaming this a bit on contractors, too. There aren't enough wheelchair attendants and fuelers to keep planes moving through, and
a lot of airlines got smaller in the pandemic, just in the size of their fleets. They parked some airplanes permanently, so that is making things a
little bit harder to get back to normal.
SOARES: Pete Muntean, thanks very much. Pete, appreciate it.
Now, as we continue on the show, later this hour, I'll spoke to Chip Rogers. He is the President, as well as CEO of the American Hotel and Lodge
Association. Hotel owners are also sounding the alarm and say the worker shortages, as Pete was talking about is threatening their recovery.
And still ahead, Tokyo turnout. Spectators will be allowed at the Olympic Games. We'll reveal how many, though, next.
SOARES: Now, Japanese sports fans will now be allowed to attend the Olympic Games in Tokyo. Organizers have decided to allow up to 10,000 people into
the venues until they are half full.
Spectators will be asked to keep quiet and wear masks. The IOC President says he expects the vaccination rate among athletes and officials within
the Olympic Village to be well above 80 percent. CNN medical analyst, Dr. Leana Wen is in Baltimore with more.
Dr. Wen, great to have you on the show. I want to get your thoughts. As you heard me read that story, what is your biggest concern? Can the Olympics be
safe if it is hosted this way? I think we are talking about 50 percent capacity here roughly.
DR. LEANA WEN, CNN MEDICAL ANALYST: Well, I would have preferred from a health standpoint for there to be no spectators. Look, I want the Games to
go on, right, we all want these athletes who have been working their entire lives to be able to compete, and there is already a risk in bringing the
athletes and their coaches and all their staff from all over the world.
There's a way to minimize that risk which is to have them also do masking and quarantining and testing, but now we're introducing spectators. And,
look, if vaccination were required of these spectators, I would feel a lot better.
The problem though, is in japan, the -- only seven percent of the population is fully vaccinated. And so, I do really worry about, even
though it's only at 50 percent capacity, there's definitely still the risk of spreading COVID-19.
SOARES: Yes, like you said, it's only seven percent that have been inoculated. The government though is expecting 20 percent of the population
to be vaccinated before the Games begin. But it is still a huge risk.
WEN: Well, again, I would prefer that all those individuals who attended in-person are fully vaccinated. I think if lieu of that, the government and
the IOC can still do something else, which is they can also require testing on the day or 24 hours before. That would make it safer still. And I also
hope that the spectators attending will wear masks indoors at all times and, very importantly, to avoid other celebratory activities.
I don't want people wearing masks at the Olympics in the stadium only to be going to bars and restaurants afterwards and letting down their guard.
SOARES: And that's a very good point you made because it's something that we have seen and we have heard from the Olympics organizers that they don't
want people to congregate and celebrate and drink in streets, et cetera, because obviously, it makes it incredibly risky.
But there are concerns, Dr. Wen, and I'm sure you will tell me this, about variants. The fear that we've heard that this could be a super spreader.
So, these steps if put in place could work out, preferably if they didn't have spectators, it would be better?
WEN: Well, I mean, I think what is the most advantageous in this case is they are saying that only individuals within Japan are able to attend, so
we are not going to have international spectators. I think that will lift - - that will eliminate or at least reduce the risk of transmission of variants by a lot.
WEN: At the same time, we have people coming from all over the world who are athletes and staff, and so, I think the risk of super spreader events
and also a further spreading of more contagious or more virulent variants is definitely still there.
SOARES: Let me ask your thoughts on this. A Japanese research team from the National Institute of Infectious Diseases in Kyoto University and Tohoku
University said the number of infections there could increase by 10,000 cumulative if the Games are held with spectators versus without it.
Is this -- do you see that potential -- is this a potential reality?
WEN: It is certainly possible. We have seen how quickly COVID-19 spreads in crowded places, when a lot of people are gathering, and we're talking
about, even though it is 50 percent capacity, it's 50 percent capacity at each event. So, overall, it's not the same 10,000 people who are going to
be attending each event. We're talking about potentially hundreds of thousands of people who are attending and then they also will be
interacting with friends and family members.
The vaccination rate in Japan is just so low at the moment even when the Olympics begin. And so, when you don't have that level of community
immunity, you could see coronavirus spread like wildfire the way that it has throughout the pandemic.
SOARES: Dr. Leana Wen, always great to get you on the show. Thanks very much.
Now, in Brazil, the Copa America is showing how hard it really is to host international sports during a pandemic.
Brazil's Health Ministry says 82 people involved in the tournament tested positive for COVID during its first week. Half of the teams playing have
reported cases. More than half a million people in Brazil have now died from COVID-19, and it is only the second country in the world to surpass
that number behind only the United States.
Many Brazilians blame President Jair Bolsonaro's handling of the pandemic.
In Rio de Janeiro, a memorial of red roses was set up on Copacabana Beach in memory of those killed by the disease.
Well, sadly, children in Brazil have been dying from COVID-19 at higher rates than really anywhere else in the world. A local scientist say there
is barely a person there today who hasn't lost a loved one to COVID-19.
SOARES (voice over): Little Sara Gois was born this January in Brazil. In the midst of a ravishing pandemic. Her 22-year-old mother naturally
besotted with her precious princess.
But even an abundance of love wasn't enough to stop her daughter from contracting COVID-19.
SAMEQUE GOIS, MOTHER OF CHILD WHO DIED OF COVID-19 (through translator): I thought it was something I had done. Maybe I passed on the virus. I didn't
know what was happening around me. I knew that the only thing I could do was to get on my knees and pray.
SOARES (voice over): Despite all her pleas, little Sara died. She was only five months old.
GOIS (through translator): When she died, when they gave us the news, I was able to hold her. I was able to feel her one last time.
SOARES (voice over): It's a loss that is felt much more often in Brazil than in many other countries. While the Brazilian Health Ministry says
1,122 children under the age of 10 have died since the start of the pandemic, one research group argues the death toll is actually closer to
This year alone, more than a thousand have lost their lives. And doctors tell us the gamma or P1 variant first identified in Brazil may not be to
DR. ANA LUIZA BIERRENBACK, EPIDEMIOLOGIST, VITAL STRATEGIES: It is that kids have been dying more in Brazil, it seems the original variant was
here, so it was not the addition of the P1 variable that made kids die even more than in other countries.
SOARES (voice over): Despite the rising numbers, baby Sara was only tested for COVID-19 twelve days after she developed the first symptoms. Her mother
tells me doctors assumed she had something else. A common misconception in Brazil, tells me pediatricians, Andre Laranjeira.
DR. ANDRE LARANJEIRA, PEDIATRICIAN (through translator): A lot of pediatricians had a resistance when it came to requesting COVID-19 tests
for children when they're exhibiting those typical symptoms on their respiratory tract -- runny nose, cough, fever -- practically all children
have those symptoms this time of the year.
SOARES (voice over): But Dr. Laranjeira says this alone doesn't explain the higher death rate across Brazil.
Outside Marcia Brai (ph), the hospital on the outskirts of Sao Paulo, one family is counting their blessings.
CAROLINA BASTO, MANUELA'S MOTHER (text): I'm overcome with emotion. I'm so happy.
SOARES (voice over): Her nine-year-old daughter, Manuela is finally out of ICU after some five days on a ventilator having contracted COVID-19.
Back at home, her parents reveal their ordeal.
BASTO (through translator): Her kidney was no longer functioning. Her heart was beating irregularly. It was the end of the line for me.
KLEBER DE OLIVEIRA, MANUELA'S FATHER (through translator): We were desperate. Our world had collapsed.
SOARES (voice over): They say it took four doctors to diagnose Manuela. But in the end, she was admitted to an ICU and got the best possible treatment.
But not all in Brazil can have access to this type of health care.
LARANJEIRA (through translator): When you take the fatalities within the pediatric age group, more than 60 percent are from vulnerable socioeconomic
groups. It's impossible to turn a blind eye to that.
SOARES (voice over): Here, this disparity can be the difference between life and death. Between a family that gets to celebrate and one that's
forced to mourn.
SOARES: Now, there is no single reason why we are seeing a rise in deaths in Brazil, but we know, there is low testing rates, a lack of contact
tracing, and also the misconception that children don't get COVID-19. But principally, as you heard Dr. Laranjeira say there, it's mostly
I thank the family of Manuela and little baby Sara.
Now coming up, as more people get their COVID shots, more places reopen to tourists, the hotel industry runs into new challenges. We'll tell you what
those are, next. You are watching QUEST MEANS BUSINESS.
SOARES: Now, nightclubs, festivals, and concerts will soon be returning in France. It's the final step in the country's reopening. Concerts can resume
next week. Nightclubs can reopen from July the 9th. In most cases, people will still need to show they've been vaccinated or don't have COVID.
In Italy, all but one of the country's regions have relaxed their COVID restrictions to the lowest level.
For more let's get Cyril Vanier who is in London. And Cyril, you know, Europe finally, slowly opening up ahead of these critical summer holidays.
But there consensually must be the variants in particularly the Delta variant here in the U.K.
CYRIL VANIER, CNN CORRESPONDENT: Yes, absolutely. Look, Isa, the Continental Europeans are looking at what happened in the U.K. And then
they know that they are a month, maybe two months behind that curve. And it was true in December, January, with what was known here in the U.K. is the
Kent variant that Europeans are referring to as the Alpha variant. It rose and increased in prominence in the U.K. throughout the month of December
and caused a full-fledged panic, frankly, here in January.
And Europeans got it, what? Just a few weeks later. So they know that the same thing may happen to them with this Delta variant. Right now, the
French minister says that the Delta variant is only accounts for two to four percent of infections in France. That number is probably an
underestimate, according to several scientific opinions. But still, it's a tiny minority of infections whereas we know in the U.K. it's the vast
Ninety-nine percent of infections are down to the Delta variant here. So, Europeans know that this is going to hit them that they probably cannot
stop it. They expect it to become dominant, but they hope to be able to slow it down. And sorry to use this overwrought cliche, but once again, it
becomes a race between the variants, the Delta variants, and the vaccines with vaccinations obviously progressing across the continent.
SOARES: We'll get to the vaccination. Let me ask you about really the club's opening up in France, how are they -- what they're going to show,
they have to show they've had a vaccine, they have to show a COVID test. How is this going to work?
VANIER: Yes, so clubs will reopen in France, a little under three weeks from now on July 9th. It was just announced and bear in mind clubs have
been closed for 15 months, more than a year. So, there's a lot at stake financially, economically and also just in terms of enjoying life for so
many people who haven't been able to, you know, partake in that kind of thing. So clubs will reopen, but patrons will have to show a health pass
that will indicate either that they have had a full vaccination protocol, they're fully vaccinated.
Or that they have had COVID and therefore have some level of immunity or they will show -- they will have to show a negative COVID test. And clubs
will be allowed to provide rapid testing just outside the front door. So quickly, it should be possible to go to the club even if you haven't been
vaccinated as many people won't have been by then and get a rapid test and that will then allow you entry into the club.
The real -- without facemasks, the real limit, Isa, will be attendance will be capped at 75 percent of capacity for the clubs, at least in the first
SOARES: Whole -- the whole new experience when you're going to nightclubs. But on the question of getting your vaccinations, where are we in terms --
in terms of France on that vaccination front? How -- have they -- have they started vaccinating the younger part of the population? Those who might be
attending said nightclubs?
VANIER: Yes. Vaccinations are now open to everyone. But the vaccination rates and uptake is for the moment much lower than what we've seen in the
U.K. Of course, which has been best in class in which has been the envy of its European neighbors. The good news, however, is that the vaccination
rate, the speed at which France is now vaccinating is very high. They're vaccinating more than half a million people a day.
More than the U.K. was vaccinating at the time when, you know, it was being held up as an example to its European neighbors. So, a quarter of the adult
population in France now has a full vaccination protocol has, received the two doses. And just above half have received one dose. The good news is
that obviously it's going to be a much more favorable picture. Three weeks or a month from now and even by the middle of the summer or two months from
SOARES: Cyril Vanier with some good news at last. Thanks very much, Cyril. Good to see you. Now, reopening is bringing its own challenges in the
United States. Early this hour, if you remember we told you how American Airlines is canceling flights because of staff shortages. U.S. hotels say
labor shortages are threatening the post pandemic recovery too. As hotel guests returning larger numbers, some workers have had to pick up double
duties and some hotels have had to leave rooms vacant.
Unemployment in the accommodation sector is more than three times higher than the rest of the economy. We're joined by Chip Rogers, president and
CEO of American Hotel and Lodging Association. Chip, great to have you on the show. Let's talk about these problems that we are seeing, you are
seeing across the hotel industry. We are starting to see signs that you U.S. economy is roaring back.
SOARES: But that doesn't seem to be reflected in the hotel industry. Or is it?
CHIP ROGERS, PRESIDENT AND CEO OF AMERICAN HOTEL AND LODGING ASSOCIATION: Well, partly yes, partly no. I mean for about 15 months we were trying to
find guests anywhere we could. We were hoping people would travel in some capacity to help the hotel stay open. And now that the guests are back,
leisure travel is really doing well. We can't find employees in many critical places. So, this has been a huge, huge challenge for us.
SOARES: And explain to our viewers around the world why that is -- why you can't find employees because unemployment is very high. And there are so
many jobs in the United States.
ROGERS: Yes. A couple of things at play here. First and foremost, many of them that were laid off during the pandemic have moved on to other jobs. I
mean, they couldn't sit around and wait for 14 or 15 months to find a job. Second thing, the enhanced unemployment, no question about it, it has
created an economic decision for many people. Should I stay home and make almost as much if not more money.
Not working as opposed to going and working? So there are a number of factors here, we had a structural problem before the pandemic began. It has
become even more enhanced now that leisure travel is back for the summer.
SOARES: Is there any way that -- or are you thinking at all have any way to create some sent device workers to come back? You've just put up, paints
the picture, well, why should I go to work when I'm getting, you know, seeing different amount of money or the similar amount of money if I stayed
at home. Is there anything the industry can do to incentivize people to come back?
ROGERS: Well, that's a great question. We are trying everything right now. In fact, for housekeepers, since January of this year, the average wage
rate has gone up 25 percent. So wages have increased significantly, people are trying hiring bonuses, retention bonuses, flexible schedules, pay on
demand, where you work during the day and get paid later that day, just about anything and everything to try to get people back into the workplace.
SOARES: Is this the -- is this the biggest concern would you -- say, Chip, from hotel CEOs? Is this what's keeping them up at night?
ROGERS: In the short term, it is because we see all this demand from the summer. Long-term challenge really is business travel meetings and
conventions. Because keep in mind, this industry cannot survive on leisure travel alone. Business travel meetings and conventions comprise about 60
percent of annual revenue. We really need to see that white-collar business travel come back in the fall, followed by meetings and conferences and
conventions in 2022.
SOARES: So are you -- sorry, let me just double check that with you. Are you expecting that business travelers will start coming back in the fall of
this year? Is that when you expect a bit -- a brighter picture, let's say, Chip.
ROGERS: We're hoping, yes. We're starting to see a little bit of it. Many folks who said they weren't going to come back until post Labor Day in the
fall have now moved that back into the summer. So we're seeing these towers and urban city centers begin to open up. And that's what we really need. We
need people back in the offices because that's what creates the business travel.
SOARES: And then the long term, what are the biggest concerns that you're hearing from hotel CEOs? I want to get a sense of, you know, if you're all
together in a room on Zoom, what are people -- what are they telling you?
ROGERS: It's the long term labor issue. And that is, again, as I mentioned earlier, even before the pandemic began, here in the U.S., in January of
2020, we had 900,000 job openings. Now, you layer on top of that, the number of people that have left our industry and we're trying to rebound
and rebuild at the same time. So, we're looking at a structural labor problem for quite some time.
We've not been able to get many work visas into the U.S. for people who would want to come here and work. And so, there's a lot of challenges in
and around labor and that's going to last for many years.
SOARES: That is very interesting, indeed. Did -- what you're putting in place to try incentivize to try and get that labor force ready for work.
Now, I know, Chip, that you have been lobbying for more aid to the hotel industry. How much realistically do you think is needed here?
ROGERS: Well, there's a big difference between what's needed and what we're asking for. You look at just 2020 alone, the industry lost over $100
billion in revenue. That was more than half of all revenue. This year, even though circumstances are improving, still going to lose about 25 percent of
that 2019 revenue. What we're asking for with respect to direct data, the industry right now is around 20 billion.
Which is a very, very small amount. But keep in mind, you still have some folks in your urban cities centers that have food and beverage jobs that
have not been able to come back because there aren't conferences and conventions. You've got owners that are still struggling to make payments.
You can't overcome what happened in 2020. And in 20 -- early part of 2021. It's not going to be made up overnight. It's going to take many years.
SOARES: And do you -- I mean, how likely do you think? Are you hearing the right signals at least from government that this is at all possible?
ROGERS: It's going to be a struggle because right now everybody sees everyone going on vacation, they see the hotel is filled up. And I think
they're discounting the fact of the pain that the industry has had gone through -- go through over the last year and a half. Keep in mind, many
owners had to take the debt that they owed and put it onto the end of the loan or they had to pay interest only on their debt for a little while.
ROGERS: And now those notes are coming payable and the property taxes are coming in. And there's a -- it's an enormous cost drivers are coming in.
And yet leisure travel is the only thing that's trying to carry the industry right now. So got to have business travel back. I don't know that
elected officials see that right now because everyone's on vacation.
SOARES: Great to have leisure travel but really business travel was really what you need right now. Chip Rogers, always great to have you on the show.
Thank you very much, sir. And wish you the best of luck.
ROGERS: Thank you so much.
SOARES: And that is QUEST MEANS BUSINESS. I'll be back at the top of the hour for you as we make a dash for the closing bell. Up next, though,
Living Golf. Do stay right here with CNN.
SOARES: Hello, I'm Isa Soares. It is the dash to the closing bell when just in fact two minutes or so. Let's show you the Dow. The Dow set to make a
really snap, a five-day losing streak in style. Looking at the number, 604 up almost two percent there. So, a very good change since we started the
hour. We've seen a sharp contrast really from last week. If you remember when the Fed signaled it can move to raise interest rates sooner than
And we saw a sea of red very different stories today. Every stock on the Dow is green. As you can see. Inflation fears, supply chain snags and labor
shortages are all contributing though, to the volatility and we'll continue to do so.
Airlines canceling flights, hotels keeping rooms vacant. We spoke to the head of American Hotel and Lodging Association about the crisis in tourism
reliant interest. Take a listen.
(BEGIN VIDEO CLIP)
ROGERS: Even before the pandemic began here in the U.S. in January of 2020, we had 900,000 job openings. Now you layer on top of that, the number of
people that have left our industry and we're trying to rebound and rebuild at the same time. So we're looking at a structural labor problem for quite
some time. We've not been able to get many work visas into the U.S. for people who would want to come here and work.
And so there's a lot of challenges in and around labor and that's going to last for many years.
(END VIDEO CLIP)
SOARES: Chip Rogers there on the challenges ahead for the industry. Let's look at the gains which are broad base, we have a look some of the sectors,
every sector really on. The S&P is up, the Dow up, the S&P 500 up almost 1- 1/1 percent. NASDAQ almost up one percent. Value stocks have been outpacing growth stocks as investors gauge, the Fed signals on interest rates from
SOARES: And growing evidence of course of strong U.S. economic comeback. So, really a sea of green for the first time this Monday. And that is your
dash to the bell. I'm Isa Soares in London. As you can hear it, it's the closing bell. It's ringing.