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Quest Means Business

E.U. Energy Head: This is Worst Oil Shock in History; Sources: Trump Doesn't Want to Give Iran Time to Drag Out Talks; United Says it Will Raise Summer Fairs as Much as 20 Percent

Aired April 22, 2026 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[16:00:19]

PAULA NEWTON, CNN INTERNATIONAL HOST: I mean, you wouldn't know it from the Dow, but if we have a look at the S&P and the NASDAQ setting records today,

especially the NASDAQ, the tech heavy NASDAQ, you see it there up better than 1.5 percent. In fact it hit an all-time high. Those are the markets

and these are the main events.

Europe's Energy Commissioner tells us the Iran War could lead to a global economic crisis.

Iran says it seized two container ships in the Strait of Hormuz, as we are learning, President Trump plans to give Tehran a limited time frame to

return to the bargaining table, and with 50 days -- yes, 50 days to go until the World Cup, the tourism boom may not be playing out as expected

for the hotel industry.

Live from New York. It is Wednesday, April 22nd. I am Paula Newton in for Richard Quest and this is QUEST MEANS BUSINESS.

And a very good evening to you. Tonight, the worst oil shock in history, a threat to global economic stability and a major risk to the summer travel

season. That's what the E.U. Energy Commissioner told me, the bloc is now facing as a result of the conflict in Iran.

Now, I spoke with Dan Jorgensen hours after he announced a new package of energy relief measures. The bloc is trying to mitigate the extra $28

billion it spent on energy imports since the start of this war.

Now, the measures include optimizing jet fuel distribution and cutting energy taxes. Jorgensen told me he expects energy prices could remain

elevated for months, if not years, and I asked him how he would characterize the current situation.

(BEGIN VIDEOTAPE)

DAN JORGENSEN, E.U. ENERGY COMMISSIONER: Normally, when we speak about energy crises, we speak about oil crisis in 1973 and of course, the crisis

in 2022. That was an effect of Putin's full scale invasion of Ukraine that led the gas prices to spike, and this situation is actually worse because

it is a combination. This is both oil and gas, and it is the world market that has gone up.

For us in Europe, it really is a lesson. We have diversified our supplies of oil and gas, but even though we've done that, still we are hit very

hard. For me, it is very, very clear that there is only one way forward for us and that is to get totally rid of our dependency on fossils and instead

have more of our own homegrown renewable energy.

NEWTON: And I will get to some of those measures in a moment. But if you're a European consumer right now, you'd be forgiven for being a little

underwhelmed at some of the mitigating actions that you've put in place here. Its May until you get these amendments through. I think if you're a

European consumer, you're wondering what this will actually do to bring down the price of your energy.

JORGENSEN: Well, on one hand, I would say you're right because there is not one silver bullet, but on the other hand, I will say that actually we are

doing things to address this situation that can help even in a very short term.

One of them is that we are encouraging member states to lower taxation on electricity that will both help people pay their bills, but it will also

spark electrification and the deployment of more renewables. We are telling member states, please, people have gas boilers, let's state subsidize and

make it possible for them to change these gas boilers and replace them with heat pumps, electric heat pumps or district heating.

And we have a lot of these individual actions and tools that member states can use that will help not only in the long term, because these are also

parts of structural changes, of course, but actually also in a quite short term.

NEWTON: But it is the coordination of this across the E.U. that sometimes is a problem, right? I mean, a lot of those E.U. members do not have fiscal

room really to give their consumers that kind of a break.

JORGENSEN: That is very true. So in many ways, we are better situated at dealing with the crisis now than we were when we were hit by a crisis in

2022, because we have more renewables in our system. But on the other hand, we really haven't done enough to spark the investments that we need in the

renewable sector and that we need for renovations and other energy efficiency measures.

And therefore, we from the European Union side are also doing what we can to provide funding. So we do have different sources of funding in the E.U.

that can be utilized better than they are today, and direct towards energy instead of other purposes, just as we will be continuing to work closely

together with member states to coordinate, for instance the buying of gas to fill the storages.

[16:05:13]

This is something we do every summer so that we are ready for the winter time. That's very expensive for member states now because of the high

prices.

But when we coordinated via the E.U., we can make sure that the prices are lower, thereby create some fiscal room to make some of the investments that

we are looking for.

NEWTON: Right. But I hear you, that challenge of getting that storage done before the winter months is going to be, you know, quite difficult at this

point.

Another difficult challenge here is jet fuel. I don't have to remind you, Lufthansa already saying 20,000 flights cancelled now in order to preserve

that jet fuel. In terms of the measures that you've announced, how much of a coordinated effort can you muster here, especially when you know as well

as I do, you always risk the point that in some E.U. members, it will be every man for himself, that they might even hoard some of these jet fuel

supplies?

JORGENSEN: Well, actually, I do sense a large degree of solidarity, maybe not only for idealistic or naive, some would say reasons, but because we

are all in the same boat. The European Union is so closely connected, our economy is so closely connected that if things go bad in one country, they

go bad in all countries. So, we do have tools.

We are now setting up an observatory where we will get the overview of exactly how much fuel have we got, where have we got it? For how long have

we got it? How much do we import? How much do we export? All of these things that are needed for us to if this indeed becomes a security of

supply crisis and we will need to redistribute and share the stocks that we have.

NEWTON: Given what you've put in place here, how would you now characterize the risk, though, to that all important summer travel season in Europe?

JORGENSEN: Oh, but it is a big risk and if there was one thing that I could do or we could do as policymakers that would solve this, of course we would

probably do it. But the fact of the matter is that what determines whether or not this will be a long lasting crisis and how serious it will be, will

be the duration of the crisis and the severity of the crisis in the Middle East.

So all we can do is try and prevent and try and limit the negative effects. But we are totally dependent on the geopolitics in this case, I am afraid.

NEWTON: And if I may, you've made the point, right? Even if this ends tomorrow, this crisis will go on. It will linger. It is likely not to end

tomorrow. So, what is the worst case scenario look like here? I mean, many say that this is possible to go on through the rest of the year.

JORGENSEN: Yes, so unfortunately the worst case scenario can be very, very bad. If indeed this situation continues and the duration of the crisis will

be very, very long, then it will affect not only the energy sector.

We are already starting to see effects in other sectors. Fertilizers, for instance, so affecting our food production. Semiconductors and other things

that we need, technology that we need for production of many, many goods in our society.

So what I really fear is that this will lead to an economic crisis. And by the way, if that happens, then that's not isolated to Europe. This will be

a global economic crisis that none of us wish for, of course.

(END VIDEOTAPE)

NEWTON: A blunt take there from the E.U.'s Energy Commissioner.

Now, meantime, energy prices are moving higher today after Iran's Revolutionary Guard says it seized two vessels in the Strait of Hormuz.

U.K. maritime officials say the Iranians fired on one ship without warning. A third ship, which is Greek owned, is disabled off Iran's Coast after

being targeted by the IRGC.

Now Iran's top negotiator says the U.S. blockade violates the ceasefire and prevents the Strait from reopening. Sources, though meantime, tell CNN that

President Trump will give Iran limited time to get negotiations back on track.

Our Nic Robertson remains in Islamabad, where those negotiations are supposed to take place.

You know, Nic, just last hour, the White House Press Secretary, Karoline Leavitt, you know, denied that there was any kind of a timetable here. But

there is no clarity, is there, Nic? I mean, what more are you learning about the possibility of negotiations.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, here is another interesting thing about the ceasefire. The Pakistani mediators asked for

yesterday, and President Trump gave and he said the reason he was giving it was because the mediators asked for it. The Iranians have said, well, we

didn't ask for it. They have also said we don't have a response to this extension of the ceasefire either.

It is a little bit curious, and I say that because, you know, some of the behind-the-scenes diplomacy here yesterday, sort of would have indicated

that this was why the mediators here in Pakistan came up with this suggestion for the United States.

[16:10:09]

So there is that part of it on the ceasefire. Iran is not saying that is what we wanted and that is great. Now, we are going to come to the talks.

They are saying the opposite.

The thing President Trump said in his Truth Social post that he wasn't giving, he wasn't going to lift the blockade and Iran has made that the

central issue. Most of what the sort of top line speakers have tweeted about from Iran today on X has been that unless that blockade is lifted by

the United States, they cannot see themselves coming into talks.

Whether the diplomacy really is behind-the-scenes or not, all of that isn't clear. But again, trying to read between the lines and see what we can't

actually see, I think The White House spokesperson's response Karoline Leavitt today speaking with Fox, when she was asked, essentially what is

going to happen about those ships that the IRGC fired upon and took under their control, it appears just off the Coast of Iran, what is going to

happen to these or what is the reaction going to be to this action against these container ships?

And the answer was essentially, they're not ours. They are not Israel's. No action. So in a way, the United States is not responding to Iran's sort of

ratcheting up the tensions, if you will, in the Strait of Hormuz, which again, seems to be a sort of diplomatic signal. Of course, it can all

change. As we know, President Trump takes the key decisions. But that sort of signaling tells you and the optimism that is still being expressed here

in Pakistan by the mediators here, it still seems to indicate that diplomacy can more formally get back on track.

The Iranian Ambassador here was meeting with the Prime Minister today. Publicly, that sort of signaling as well, but it is what -- I think your

point really it is what we can't see going on what is happening behind-the- scenes, that's the key to it all.

All right, Nic Robertson for us in Islamabad as we continue to follow this. Appreciate it.

Now, Ukraine's President Zelenskyy says Iran must not distract the West from Russia's war on his country. Mr. Zelenskyy spoke to CNN's Christiane

Amanpour. He admitted that the war with Iran had taken the U.S. and Europe's focus away from Ukraine, particularly when it comes to talks with

Moscow.

President Zelenskyy says that Ukraine's partners can focus on both conflicts.

(BEGIN VIDEO CLIP)

VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT: We speak about security in Europe and we speak about security in NATO where the United States is the leader

of the NATO.

So I think that I am sure that the challenge with Iran is important and I am sure that Americans and Europeans, by the way, have to think about it,

how to help people, just ordinary people. Again, I am not speaking about one country or another just to help people to stop this war.

And I think this is the most important, but not to forget or not to think that -- we will speak about it a little bit later. Ukraine is not a little

bit later. Ukraine is already in such a big tragedy. So we have to find a way how to think and manage in parallel way.

(END VIDEO CLIP)

NEWTON: All right, major airlines are raising their prices in response to the energy crisis. United says it will hike summer fares by as much as 20

percent. We will discuss with the top aviation consultant after the break.

(COMMERCIAL BREAK)

NEWTON: Returning to our top story, the E.U. Energy Commissioner says a spike in oil prices has put Europe's summer travel season at risk, and

airlines are warning of pain to passengers as well.

United said it is raising fares this summer by as much as 20 percent. CEO Scott Kirby says demand is still strong enough to pass the cost of higher

jet fuel on to customers.

Kirby also said those higher fares will likely remain in place, even if the price of jet fuel falls.

Pete Muntean explains.

(BEGIN VIDEOTAPE)

PETE MUNTEAN, CNN AVIATION CORRESPONDENT: Not a huge surprise here. Airlines run on thin margins and historically, fares don't really come back

down once they go up. Here is the new warning from United Airlines CEO, Scott Kirby from Wednesday's earnings call.

Passengers are paying about 20 percent more per mile than they were a year ago. And Kirby says even if fuel prices fall, those higher fares are likely

to stick around.

The data from travel site, Going shows just how much prices have jumped. Domestic airfare up 18 percent for the summer, international fares up eight

percent. That's about 13 percent overall. Labor is still the single biggest cost for airlines. But remember, jet fuel is number two and the price of

jet fuel has roughly doubled since the start of the war with Iran, meaning airlines have no choice but to adjust.

German carrier, Lufthansa is cutting 20,000 flights through October. That includes about 120 flights a day through May. The goal is to save money as

fuel costs surge. This is classic airline playbook: When costs go up, airlines start slashing capacity, fewer flights means fewer choices, and

the routes most likely to disappear first are the ones that weren't really all that profitable to begin with.

But here is the kicker, demand for air travel is still very strong, and airlines admit that they think travelers will keep paying these prices and

so far, they are right. Pete Muntean, CNN, Washington.

(END VIDEOTAPE)

NEWTON: Now, shares of Spirit Airlines closed nearly 200 percent higher as it moves closer to securing a half billion dollar bailout from the Trump

administration.

A source tells CNN that the deal would include the U.S. government taking a stake in Spirit Airlines. A spike in jet fuel that we were just talking

about has derailed the budget airline's plans to emerge from bankruptcy protection.

Mike Boyd is the president of the aviation consulting firm, Boyd Group International, and he joins us now.

Good to see you.

A lot of action here and let's begin with Spirit Airlines.

This is quite a turn of events. How do you think this will go for Spirit Airlines itself? And what about the government actually taking a stake in

it. Is that a good idea?

MIKE BOYD, PRESIDENT AND CEO, BOYD GROUP INTERNATIONAL: It is a terrible idea. Number one, Spirit is not a winning airline. They haven't made money

in six years. They went into bankruptcy once and said they're going to make a quarter of a billion dollar profit, and they lost that much, had to go to

bankruptcy a second time.

So what the government might be getting out of this is paper, because everything else has been mortgaged over Spirit, and it is a shrinking

airline.

I really believe this is a really bad deal for everybody because Spirit, it really is almost becoming a non-sequitur to the U.S. airline system.

NEWTON: I hear you, Mike. And yet, if you're a consumer at this point in time with so many airlines talking about consolidation, and look, I know

that President Trump pretty much, you know, said a flat no to a merger between United and American Airlines, but any kind of competitor exiting

the market here is not good news.

BOYD: Well, first of all, there aren't many airlines left. There are not so many airlines out there. You've got Spirit and Frontier, both of which are

excess airlines, really, unfortunately. You've got American and United. That's out of the deal. Then on top of that, you've got Alaska and you've

got Delta and you have Southwest.

[16:20:10]

There is not a lot of airlines to merge out there anymore, and not many that make any sense because if Spirit goes away, it will be two weeks

before everything is back to normal. They are just not a big player, the same thing with Frontier. So putting more airlines together is not a big

solution right now.

NEWTON: Where does that leave consumers though at this point? We are talking about the price of jet fuel and United was quite blunt, as I am

sure the other airlines would be, too. I mean, look, these fares will remain higher for longer and that probably has a lot to do with capacity.

Right? It is so strained.

BOYD: It certainly does. But keep in mind, the capacity of say a Spirit has is mostly almost entirely to leisure destinations. So the majority of

Americans really aren't affected by Spirit, regardless of what some consumers say.

So in terms of lack of competition driving fares up, what is really going to be driving fares up is the fact that you've got increased labor costs,

you've got increased fuel costs. And Mr. Kirby is right, if the passenger is out there in the big world will pay 20 percent more now, they will pay

20 percent more when the fuel prices go down, too.

NEWTON: That's not -- that is really not good news and I think consumers are pretty smart at this by now when they look at things like to have to

pay to select a seat, baggage prices.

I mean, where do you see this going? Because for those of us who still remember what it was like to get a cheap airfare ticket, is that in our

future at all? I mean, where is this going to go in the future years?

BOYD: Well, we've got a strong air transportation system, but in terms of any of the white knights coming over the hill to save us from high fares,

it is not going to be there. The average cost of airfare is going to continue to go up because the costs that drive airlines are going up as

well.

I mean, like Frontier Airlines, you know, they've got a pilot contract that is delayed. It would be another $100 million in debt right there for them

to pay that off. So what we are looking at is a situation where all the dynamics point to higher fares, and we can't do much about that.

NEWTON: So when you look at the industry as a whole though, is it better then to be healthier, but that this will really strap consumers, consumers

that were used to being able to fly really anywhere in the world, and that would be for middle class people just like you and I just trying to book a

ticket can no longer be able to do that, that these costs will really become incredibly prohibitive.

BOYD: Well, the real issue here is like, you know, Mr. Kirby at United said people are still flying, you know, and the real issue here is how flexible

or how movable, if you will, are people's travel plans.

And I think the real hit will be here, some of these small communities that think they're going to get air service are getting hornswoggled by

consultants. They are the ones that are going to get fined out. An airplane is not coming into town. Get in your car and drive. That's where the real

hit is going to be, if you want to call it a hit.

But the real point here is, we are not going to be cut off from being able to fly. It is just going to have to replace something else in the budget to

pay for it.

NEWTON: Okay. Mike Boyd, we will leave it there and we will continue to keep an eye on the Trump administration if it does indeed make that

investment and take that stake in Spirit airlines. Appreciate your time.

BOYD: Thank you.

NEWTON: Now, the prediction market, Kalshi has suspended three political candidates from its platform for political insider trading. An internal

probe found they bet on their own campaigns.

The suspensions and fines are the most aggressive enforcement actions taken to date by a prediction site against political candidates. Now, the

announcement did not identify the users facing punishments. A source familiar said they were candidates for federal offices.

Marshall Cohen is in Washington.

Marshall, I have to ask you, they likely took this action because they know that there is criticism, especially from state governments, about who they

are and how they run their businesses and how much it is at risk of corruption. What more did you learn about these kinds of fines?

MARSHALL COHEN, CNN REPORTER: Paula, you're absolutely right that there is a ton of scrutiny swirling around this exploding industry that almost came

out of nowhere now and has billions of dollars in, in weekly trading revenue.

This case with Kalshi, they are calling it political insider trading. Remember, on these prediction sites, you can bet on almost anything from

sports to entertainment -- the Grammys, the Emmys, the weather, and also elections and that's what happened here.

According to Kalshi, they did an internal investigation and they found that three candidates running for federal office in the midterms this year bet

on their own campaigns in violation of company rules.

Let me read for you a quote from the head of enforcement at Kalshi, who announced these findings today, Robert DeNault. He said, "Regardless of the

size of a trade, political candidates who can influence a market based on whether they stay in or out of a race violates our rules."

[16:25:10]

He said, "Any trade that is found to have violated our exchange rules will be punished." And Paula, that's exactly what happened.

Today, they announced fines against all three of these candidates and five- year suspensions as well. But that's where they stopped. They said they were not referring this to the Justice Department for potential

investigation, criminal investigation and prosecution. And the legal experts I spoke to said that that's probably right.

The technical definition of insider trading does not properly cover a candidate betting on their own campaign, even as unsavory as it might seem,

and even though clearly it does have the ability to undermine the integrity of these prediction markets and also put into question the integrity of the

midterms as well.

Paula, one last note, CNN has a partnership with Kalshi. We use their data for editorial purposes to cover major events like elections and major

cultural moments, but we do not use their prediction platforms to place any bets ourselves -- Paula.

NEWTON: Marshall, I am glad you pointed this out for us, but when we go back to regulation in the states, right, the states are saying, look, this

is no different from playing a basketball game and betting on yourself about whether or not you're going to win or lose, or whether or not you're

going to make five layups or whatever it is.

Can they really avoid the regulation at this point in time? Because so many states attorney generals are looking at this and saying, this is gambling,

this is gaming.

COHEN: So there is a major dispute right now between the federal government and the states. The federal government position under the Trump

administration is that these products on the prediction sites are derivative swaps of financial instrument that is only able to be regulated

by the federal government, an agency called the CFTC.

They are event contracts. They are derivatives. They are not gambling in the eyes of the Trump administration, in the eyes of several federal

courts, and of course, in the eyes of the companies themselves. But on the other side, as you noted, there are nearly 40 states that have been arguing

no, no, no, this is gambling. I don't care what you call it, if it is some fancy financial instrument, it is gambling, it is betting, and you need to

get licensed under our state gambling laws.

The dispute is still unfolding in courts across the country. A lot of experts think it will eventually go up to the Supreme Court to make a

decision once and for all. But you're absolutely right that that tug-of-war is a defining feature of this market as it gets more and more popular with

more and more trades and more users, almost every single day.

NEWTON: Marshall, thanks for bringing this story to us. It certainly got our attention, something we did not see coming.

Marshall Cohen for us in Washington. Appreciate it.

Now, the World Cup is less than two months away and the hype, yes, it is building. We've all seen the sky high ticket prices, right? But how much

does the hotel room cost? We will take a look, next.

(COMMERCIAL BREAK)

[16:31:09]

NEWTON: Today is Earth Day and it comes with an alarming signal from the Arctic.

Its winter sea ice levels dropped to the lowest on record. Scientists say the melting ice could accelerate global warming.

Bill Weir has gone all the way to Svalbard, Norway, to see the ice for himself.

(BEGIN VIDEOTAPE)

BILL WEIR, CNN CHIEF CLIMATE CORRESPONDENT: Happy Earth Day from the top of the world. We are among the northernmost humans on our big blue planet

because we are way up north, Svalbard, Norway.

We are trying to reach the pack ice that is that floating pack of ice at the top of the north pole that just gets smaller and smaller as Planet

Earth overheats under a blanket of fossil fuel pollution.

This year is an all-time record low for the ice, an area twice the size of Texas, half a million square miles, missing. That open ocean means a lot

more of the sun's energy is absorbed and held, a lot less is reflected back into space, which just accelerates the warming more and more. And we've

seen it play out affecting literally every form of life.

There are the polar bears you've heard about. Well, they've adapted. Polar bears here are now hunting reindeer instead of ringed seal, because the sea

ice is no longer there and their hunting grounds have completely changed.

For people, it has been tragic to see what happens in places like Longyearbyen, the biggest town in Svalbard, recently lost a local resident,

experienced skier who went into a melting crevasse because the melt, this year's spring thaw came a month early. That affects tourism.

All of those snowmobiles and dog sleds for the tourists are parked in the mud right now a month early. And then there is the geopolitics of it all.

Ever since Russia invaded Ukraine and were ejected from the Arctic League of Nations, they haven't had a real -- there has been a real tension

geopolitically up here. Norway trying to flex their sovereignty. Things have gotten tense and at the same time, Donald Trump and the United States

pulling back on climate science, showing a real antagonism to the people who live and work up here, trying to understand our overheating planet.

I talked to several yesterday at an amazing little town, New Olmsted, this former coal mining town that is now full of scientists from around the

world, and they expressed some frustration with what is happening down in the United States politically around the world, as they're watching these

seismic changes happening, that everybody needs to prepare for, because what happens in the Arctic does not stay here. They determine weather

patterns in the Atlantic and in the jet stream, and the currents that flow down these conveyor belts of warm water, all of that is shifting literally

day by day.

So this Earth Day, one more reminder to pay attention because what is happening up here is just the opening attractions for so much of the rest

of the planet.

Let's send it back to you.

(END VIDEOTAPE)

NEWTON: Our thanks to Bill Weir. What a vantage point there.

Now, FIFA has released more World Cup tickets with just 50 days until the tournament begins. They are on sale to the general public. First come,

first serve and the drop includes tickets to all 104 matches in the tournament.

Now, FIFA says it will keep making last minute tickets available throughout the World Cup until the final match in July. Now, what about hotels and

host cities? They are setting nightly rates, of course, in anticipation of the World Cup. No doubt many fans attending matches though in this area,

right? They will be attending them at MetLife Stadium in New Jersey, but they will want to spend the night, usually in New York City.

So let's check out the Courtyard Marriott just to understand what we are doing with those hotel prices. So I want you to have a look at this. If we

look at the month in general, what really sticks out here is June 23rd, over a thousand dollars, and if you go to the 17th again, over a thousand

dollars.

Some nights, as you can see, sold out, others reasonable. June 26th, $512.00.

[16:35:07]

But now, if we try and do this for comparison's sake and go to May, have a look at this. You're looking at some real reasonable prices here.

May 22nd, $281.00. The World Cup isn't on yet. You've got the 23rd, $360.00. There are some nights that you are not available and others, there

is an event here on the 19th. I think that's probably another event in New York.

But the point is, even if you look at the week going into the World Cup, look at this, some pretty reasonable prices at the Courtyard.

What we wanted to know, though, was whether or not the hotels are making any money off of what is supposed to be a tourist boom.

Vijay Dandapani is CEO of the Hotel Association of New York City, the group that represents nearly 300 hotels, roughly 80,000 hotel rooms.

Now look, we get it, right? High demand, high prices. But I want to know from you what are you seeing in terms of bookings?

VIJAY DANDAPANI, CEO, HOTEL ASSOCIATION OF NEW YORK CITY: Well, Paula, it has basically been flat and let me point out there are plenty of other

bargains besides the Courtyard Marriott that you pointed to.

You can stay at the Part Time Square for $240.00 for June 11th, and you can stay if you want to go a little more upscale, the Lotte Palace at $320.00

for precisely the Opening Day, so it varies all over the map.

But the biggest point I would like to make is that the demand that was projected way back in December of last year, that is going to be a

cornucopia, billions of dollars coming, at least for the hotel industry, it is pretty much flat.

So the pace, if you compare it for this year as compared to last year when there was no FIFA, it is essentially the same.

Obviously, there are some outliers and there are some hotels that are doing well, that are booked well in advance. But in general, it is not the

promised bounty promise that was held out back in December.

NEWTON: Why do you think that is?

DANDAPANI: Well, there are several reasons. One is obviously, I would point to in fact, you talk about high prices, FIFA ticket prices are

extraordinarily high. You compare it to the last tournament that was held in Doha, Qatar. Here, you've got Finals tickets that could be going for as

high as $10,000.00.

Obviously, you'll get a few that are at a less number than that, but even early stage matches are going for a thousand bucks. And so that's

considerably higher than what prevailed in Doha, Qatar, four years ago.

On top of that, you've got other issues, macroeconomic issues, you've got visa issues that has resulted in somewhat of a break in expected travel to

the United States. One of your earlier correspondents pointed to Lufthansa cutting flights. Similarly, Air Canada has cut flights from June 1st

through, I think, the end of October to JFK, one of the busiest airports from Montreal and Toronto.

So you've got these issues because of high fuel prices, but also the high ticket prices, I would say, point to that.

So hotels generally, you know, they adjust as demand comes along. As you pointed out at the outset, we do what is called dynamic pricing and when

demand drops. As it is dropping and it is not certainly where it is expected to be, you'll get plenty of bargains.

I just pointed to a couple of examples. One in the mid-market and one in the high end, if you will, where it is very affordable. So, you know -- go

ahead, sorry.

NEWTON: It is interesting that you're pointing to the ticket prices and so, conversely, if people are able to attend these games, they keep dropping

more tickets. Do you believe that this situation could improve? Perhaps not in terms of getting very high prices for these hotel rooms, but that the

entire complexion of what this looks like could change as we get to the opening of the World Cup.

DANDAPANI: Well, if history is a guide, it will change to some degree. The Paris Olympics is a good example if you look at it and what ticket prices,

excuse me, hotel prices there were skyrocketing until they dropped just six weeks before. And here too, we expect a better result.

The one big difference I would like to point out is the Paris Olympics were held in Paris. The United States Tennis Open is held in New York City.

This, as you said earlier on, is held in Meadowlands, New Jersey. So of course, people want to stay in New York City, in Manhattan, Brooklyn, et

cetera. But the fact that it is across the pond makes a slight difference, you know?

So I think that you'll see hotel prices could fall even further on account of that alone. But the proximate cause is visa, high ticket prices and

difficulties in getting visas, which I already said. Yes.

NEWTON: And Vijay, we've done, you know, a good look at FIFA and that one event, but you are pointing to larger problems. It is not just, you know,

the problem with airlines, it is also the problem with visas and the reputation of the United States.

Do you see that as a headwind in the coming months and maybe even years?

DANDAPANI: Well, definitely. I mean, look, the visa process, if you're from a visa waiver country, too, is more intrusive than before. The process

previously used to be almost automatic. You got it in a couple of minutes. Now, they asked for social media handles, visa, excuse me or e-mail

addresses et cetera.

[16:40:04]

And if you have any issue, then you get into the regular queue of a visa country where you need a visa. So that is definitely a headwind. Theres a

perception problem. It is not helpful when some former senior officials in FIFA have actually actively set up a website that says, you know, do not go

to the United States. This is really bad for us.

And I might point out that, you know, tourism and events like this are big foreign exchange earners. I think its somewhere eight or eight in the list

of foreign exchange earners for the United States.

NEWTON: Certainly, some sobering information you just gave us. I think we understand the situation a little bit more clearly for the fans. Hopefully

they will get a little bit of a bargain, but we will continue to keep an eye, certainly on the tourism industry in this country.

Vijay Dandapani, thanks so much. Appreciate it.

DANDAPANI: Thank you.

NEWTON: Now, if a thousand dollar hotel room sounds a little too pricey for you and me, how about spending just 40 bucks? The only catch? Well, it is

going to be a bit claustrophobic.

Barry Neild tried out the world's largest capsule hotel in London, where he says each room is basically just a sleeping pod.

(BEGIN VIDEOTAPE)

BARRY NEILD, CNN TRAVEL GLOBAL EDITOR: This is the extent of it. Walls here, ceiling here and there is really not a great deal of space.

NEILD (voice over): That is me about to sleep in a 7.3 by 3.3 feet square box. One of almost a thousand that make up the world's largest capsule

hotel here in Central London.

I am staying here as I have an early flight the next day, and with most hotels around here being quite pricey, for just 30 pounds or $40.00, I've

decided to downsize for the night.

So what's it like?

NEILD (on camera): I mean, it is quiet. The mattress, it is okay. Its comfy enough. The sheets are Egyptian cotton.

NEILD (voice over): Capsule hotels originated in Japan in the 1970s, but are now popping up all over the world, offering sleeping pods for commuters

and travelers who want the privacy of their own room, but are on a very limited budget.

Claiming to redefine the hostel experience, this hotel offers individual capsules or cocoons, as they call them, which really are just designed for

sleeping. All other amenities are either shared or available at an extra cost, like storage for larger luggage.

NEILD (on camera): It is quite warm, really hard to move around and claustrophobic, but if you just want to sleep, it is probably just okay.

Let's see.

NEILD (voice over): I've had a really bad night's sleep bumping into my bag at the bottom of the bed, clunks and things, and at times just sort of mild

sense of rising panic. Probably something to do with being stuck in a tiny box surrounded by a thousand other tiny boxes right in the heart of London.

So I've had a shower, I've checked out, and actually I am feeling not too bad. I've certainly had worse night's sleep for more money, and for 30

pounds in the center of London. That's actually quite a bargain.

(END VIDEOTAPE)

NEWTON: Yikes. I guess it beats the park bench.

That's it for QUEST MEANS BUSINESS. Up next, "MARKETPLACE EUROPE."

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[16:45:43]

(MARKETPLACE EUROPE)

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