Circling Back to International Travel, Staffing Shortages, and Bets on Demand
This week, we’re circling back to cover updates on some big topics from previous shows. The EU is reopening to international travel, staffing struggles have escalated, and Disney doubles down on demand bets by raising prices.
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International Travel Is Coming, and It’s Making a Worldwide K Shaped Recovery
“Under the E.U. plan, the bloc would accept visitors who have completed their immunization at least two weeks before their arrival, using one of the shots approved by its own regulator or by the World Health Organization. That covers the vaccines from AstraZeneca, Johnson & Johnson, Moderna, Pfizer-BioNTech and Sinopharm, according to a draft of the rules” seen by The New York Times.
But to open those attractions, you’ll need staff
The Staffing Situation Is Nuanced, Yet Simple – Pay Up.
This is complicated. While attractions were closed, many workers didn’t just sit at home. Many shifted to other jobs with regular schedules or invested in learning other skills.
Amazon, for instance, added more than 400,000 employees last year, and on Thursday said it was planning to hire an additional 75,000 workers. It will offer a $1,000 signing bonus in some locations, and pay an average of $17 an hour.
Where does that leave the landscape?
Other companies that have recently announced pay increases include Bank of America, Chipotle, Costco, McDonald’s, Walmart, J.P. Morgan Chase and Sheetz convenience stores.
Bank of America announced Tuesday that it would raise its minimum hourly wage to $25 and insist that contractors pay at least $15 an hour.
Where does this extra pay come from?
I’ve seen the argument that this comes from cutting budgets. Ideally however, it would come from profits (a focus on long term strategy over the recent obsession with short term gains).
“As a share of gross domestic product, worker compensation is lower than at any point in the second half of the 20th century. Two main causes are corporate consolidation and shrinking labor unions…”
“Corporate profits, on the other hand, have been rising rapidly and now make up a larger share of G.D.P. than in previous decades. As a result, most companies can afford to respond to a growing economy by raising wages and continuing to make profits, albeit perhaps not the unusually generous profits they have been enjoying.” Check out this graph!
How much profit are you making? Can you invest that in wages?
Cedar Point to pay $20/hour
Cedar point had a disastrous reopening and is making a hard pivot.
“…bumping its wage package to $20 an hour and needs to hire 3,000 employees immediately. The company also will provide jobs with flexible schedules through the end of October.”
The announcement means “the park will be paying two times the hourly wage it was paying last year… The park also announced on Friday that it would not open on Tuesdays and Wednesdays in June due to being short-staffed right now.”
Speaking of making profit, Disney is betting that demand will remain high despite higher prices.
Bets on Demand
DCL Fan reports that “Disney Cruise Line Releases Pricing for the Inaugural Season of the Wish” with prices ranging from $3-9K.
Meanwhile, “Hong Kong Disneyland has posted its worst net loss on record at HK$2.66 billion (US$347 million) – the park’s sixth straight year without a profit – amid a series of closures and a near-complete absence of tourists because of the coronavirus pandemic.”
Yet SCMP also reports – HKDL “has pressed ahead with a HK$10.9 billion expansion drive that will continue through 2023.”
