Can the Midterms Bring Tourists Back to America?

0:00Seth Borko: ZS is a global consulting and technology firm that partners with companies to improve life and how we live it. Working with the world's top hospitality brands, ZS brings together data, science, technology, and human ingenuity to transform ideas into customer loyalty. They're ready to help you elevate guest experiences, improve operations, and uncover preferences and motivations through their AI-powered solutions. With more than 1 ,700 clients in over 170 countries, ZS has built the expertise, fortitude, and vision to help you deliver impact right where it matters.

1:01Seth Borko: The number of the week is 291. That is the number of House and Senate seats picked up by the Democrats last night. Hello, everybody. Welcome. It is for us, for Seth and I, we are recording at 1.30 p.m. on Wednesday, November 4th. So for those of you keeping track with your calendars out, that means that it is the day after election.

1:26Sarah Kopit: The midterm elections. The midterm elections. Nothing to talk about, right? I guess there's nothing much to talk about. It's kind of uneventful, huh?

1:32Seth Borko: It was a casual night. That number, even though I think there were a lot of people who expected this to happen, certainly if you had been following the prediction markets, as I was, was expecting this to happen. But I think that number, that 291 number, and that's not even counting governor's races and some of the other races that were on the ballot. But it's just shockingly higher than anybody thought it would be. And so I think the big question for our audience, for all of you out there, for you and I to really talk about is, you know, what does this actually do for the travel industry? Like, is this a thing?

2:15Because, you know, I was talking to a source before the election in Washington who was like, you know, no matter what happens in the legislative branch, a lot of the things that have been impacting travel,

2:31Seth Borko: tourism, business, the United States of America, Brand USA, both the organization and like the more royal Brand USA has come straight from the executive branch, right from the desk of the president. of the United States. And there really isn't that much Congress can do about it. So I don't know. What do you think? What happens now? What are you watching?

2:51Sarah Kopit: Yeah, I think that's what's so interesting about the election day is that it's it feels in some ways like it was a monumental election and a huge sweep and huge wave for the Democrats and some states. Again, if you're not from the U.S., blue as Democrats, red as Republicans. And there was a blue...

3:13Seth Borko: I have my Michigan mug right with me today as a, you know, it's just a... Michigan was a... That's a myth. There you go. Michigan was a big, very watched race. And so we can talk a little bit about that too, vis-a-vis Canada. Yeah.

3:28Sarah Kopit: Yeah, a lot of tight races broke blue. There were some states that turned blue, which is, you know, where Democrats were elected, like Texas. where Democrats were elected for the first time in, I think, decades, if I'm not mistaken. So on the one hand, this feels like it was a major election, and in some sense it was. And then, yeah, you're exactly right, Sarah. We knew that politics would be the topic of this podcast from the time. And I was sitting down to make a list of where it would matter for travel and tourism specifically. And I was hard pressed to come up with too many answers, to be entirely honest with you.

4:08Sarah Kopit: You know, I think the border and Border Patrol is a branch of the executive office and it's had a separate funding deal. So the funding for Border Patrol is fixed and set through the rest of Trump's term. He has two more years. You know, I was thinking about interest rates, but the Federal Reserve is an independent body, you know, maybe technically part of the executive branch. but an independent body or actually is it what it's an independent body the interest rate environment is sort of its own thing but it's appointed you know governors are appointed by the executive branch i was thinking about the faa and air travel where secretary duffy will remain secretary that won't change and so i was kind of you know ticking through some of the things that that really matter and um i don't know it will be hard oh yeah yeah well i think so i mean i'll i'd

5:03Seth Borko: i mean we can we can bet the coffee on this although i'm still dreaming about my my peppermint latte but i digress um oh wait a minute we had did you do your homework

5:16Sarah Kopit: on uh how many times yeah on a.m.

5:20Seth Borko: I did I did well you're so good anyway back to the so how I think this could impact like tourism specifically tourism specifically is especially with the Canadians those people who had truly been boycotting the United States for philosophical reasons, not those who have fear coming to the United States and crossing the border for, you know, safety reasons or immigration status, any of that, like putting that aside purely because they did not agree with President Trump. Like you did a survey not long after the election or it was back in 2025 where, you know, it's like 70 percent of of people, international travelers, you know, didn't want to come because of the president, but they said that when the administration changed, they would reconsider.

6:16Seth Borko: So I do wonder if for those people who are inclined to or want to come to the United States, who are in that pool, if this midterm election was enough repudiation of the president for them to be like, well, you know, I really wanted to go see the Great Canyon, so I'm just going to go now.

6:38Sarah Kopit: yeah i i mean i think for some it will be i mean we're there will be you know some of the changes i guess how do i put it some of the changes will be symbolic and symbolism is important like i don't i'm not trying to be like uh i'm not trying to be like a nerd here and be like these things don't matter they do matter and and i think that's exactly right and this is a really great piece of research we did and i love that you you you remember it so quickly i mean that's exactly right the very last question we asked was like, how permanent is this? And the answer was, it was very much. I memorized all your research, Seth.

7:09Seth Borko: Thank you. Every single piece.

7:11Sarah Kopit: I see even I had to do that. I had to search Skiff's intelligence. That's a plug. I had to ask the Skiff's intelligence system to bring up the stats. But that's exactly right, is that, you know, Trump has made so much of American politics about Trump. And this was very clearly a repudiation of Trump. So will the American electorate send a strong negative message to Trump? Will that message be heard around the world and attract more tourists? That is fundamentally the core question for the tourism and travel industry that comes out of this election, in my opinion. I think the other, you know, and it's so it's I don't expect, you know, yeah, I don't expect major changes to interest rates.

7:53Sarah Kopit: I don't expect major changes to legislation. I don't expect major changes to congressional funding. I think that's the one that is curious for me. 74 percent of those who had changed their minds about a visit in the U.S. said they would consider traveling again after Trump has left office. So I think that's an interesting question. I think the other area where there might be some impact, and this is very hard to tell, but it could be in Iran and by way of Iran on the price of oil, which matters dramatically for global airlines and global travel demand, to say the least. To say matters dramatically is to understate the case.

8:33Sarah Kopit: It matters dramatically. The most important thing you can possibly imagine is this. And so, you know, Hakeem Jeffries, who's going to be the new congressional speaker of the House for the Democrats, has said he's going to bring to the floor a vote on the Iran war. You know, they may not have enough of a majority, but some Republicans might cross party lines. There's already discontent there. You know, what can they do versus what can be done with executive action? Again, there's a lot of executive power, especially when it comes to the military. So it's hard to say. And by the way, if they open the Straits of Hormuz tomorrow, it's not entirely clear that the oil would start flowing anyways.

9:12Sarah Kopit: And so this is one of the challenges with oil markets. Have you looked at what oil markets are doing today, Sarah?

9:18Seth Borko: Yeah, oil's down today. I mean, that's the other thing. The market had a very strong opinion. Seth and I had a very busy morning. We were on a lot of calls together. And I just happened to, like, maybe in a lull during one of those meetings, took a look on the app on my phone, what the market was doing. I was just like, whoa. Like, whoa. I did not. I mean, kind of like the market really loves gridlock, apparently. Because that's exactly what's going to happen. We used to talk about that when I worked at JP Morgan.

9:50Sarah Kopit: We used to talk about that.

9:50Seth Borko: The market loves a divided government because the goal is just stay out of business.

9:56Sarah Kopit: Just fight with yourself. Stay out of business. Just don't do anything and let business be business. At the time of this recording, S &P 500 up 1.7%, but led by the tech sector. And I think that's because of thoughts around tariffs and semiconductors and supply chains and what that means. I think, what is it? Apple is up almost 6 % today because they're one of the largest losers from tariffs. But the whole tech sector, I mean, we were just looking up some OTA stocks, me and you, Sarah. Bookin today is up 10%. They reported earnings last night. Expedia, which hasn't even reported earnings yet, is up 12 % today.

10:38Sarah Kopit: And Airbnb stock is up 6%.

10:41Seth Borko: These are massive moves for these big companies, especially companies like Apple. 10 % move? Yeah. Like, these aren't little OTC companies, right? Like, these are, I mean, I'm sure Bloomberg will come out with it with the number, you know, how many trillions of dollars was made on paper today on the ledgers from the market. But, yeah, so the market loves this. I was actually I was wondering, going back to Iran, just. It's like, does the president dare. Bomb Iran again.

11:21Sarah Kopit: He said he would. He said he would. I know. Well, anyways, crude oil futures are down eight percent. And as a result, Delta Airlines stock is up six point seven percent, almost the exact same amount that oil is down percentage wise delta is up and so it's just been interesting to see the reaction i think those are fundamentally the two areas where these midterms change things for travel industry oil and sentiment fundamentally it's those two things i don't think it changes like there's a lot of small things that can happen at the margins but fundamentally change uh yeah faa budgets gridlock interest rates you know even even affordability even affordability even inflation will be hard to fight but i think those are the two big ones oil prices and inbound sentiment that matter for for the travel industry even um speaking of the

12:19Seth Borko: faa there is one looming issue that even though it's not directly a travel issue it always ends up being one and that is there is another another government shutdown looming we are only funded until december 11th and so i didn't know that i mean that yeah that's yeah we're funded through december 11th and so that's to be this way we didn't used to have a government shutdown place a year every year no and so i it's like i almost can't even wrap my mind around what a lame duck congress does with that especially this lame duck of a congress and a second term president

12:59Sarah Kopit: and a term limited president who is donald trump who has just gotten a personal who will take it personally uh a lame duck president who has taken a loss personally with a lame duck congress with a flipped majority coming in yeah you're right i mean and that is just in time for for christmas to FAA air traffic controllers just in time for Christmas. And then, you know, the other thing that I just noticed,

13:25Seth Borko: this is just a general observation when I was watching last night. Well, for one thing, I have, I will say, I have not watched TV, like, watched, like, cable or network television, probably since the last election night two years ago. The commercials have gotten so much worse. Like they're poor. They're just an abomination. They're just they're terrible.

13:51Sarah Kopit: On this very serious podcast, I will mention to you that we've been watching a lot of Dancing with the Stars in my household, which we watch on linear broadcast television. And so I've just been bombarded with campaign commercials for the last two weeks. So I'm just so happy. Now I can go from my shitty campaign commercials to shitty pharmaceutical commercials for next next week's episode. Get back to normal.

14:18Seth Borko: Yeah. But anyway, as I watched all of the various speeches and like people, the winners talking, going on stage, the thing that struck me in a good way was just how young the candidates were. you know and and it's the first time this may be because i'm getting older so they all look younger but it's the first time that i looked at candidates and didn't think those are like old people yeah in my lifetime like as a as a as a consumer you know it seems like there this was the election where there was a generational change.

15:09Sarah Kopit: Yeah, it does feel like... I hope you're right. I mean, it's felt like everyone's getting so damn old. I mean, societies are aging, just period. Everyone is getting older in every position.

15:22Seth Borko: And healthier and staying in their jobs longer. You know, that's all a good thing. But there does become a point. Yeah, you're right.

15:28Sarah Kopit: I mean, I think this was an election, though, where people want new leadership. They want change. I mean, I was going to say, I wonder how much of it is also like Barack Obama was a very young president and he was the change president. So I think, you know, not the... But yeah, I mean, there are some historic firsts also who were elected in, I think, like LGBT and candidates of color. And there were some pretty and younger people and new generations. There is some very interesting and in many ways exciting new candidates that are being considered. So, yeah, it does feel like there is a shift. There's definitely a shift.

16:11Sarah Kopit: I mean, there's definitely a shift underway.

16:13Seth Borko: I also like for many of those firsts that you're talking about, like I know exactly which ones. And I was I actually was surprised. I was like, huh, I'm surprised at this point in the year of our Lord, 2026. I was surprised that there wasn't like that. They were the first person of the identifying community that had been that had held that office for for many people. And so I'm kind of wondering now. If like the identity politics of that. We're now we're all done with that, like going forward as well, is that and there was something that I noticed during the election as well. I forget which, which, which candidate it was, but it was like, she was running.

17:00Seth Borko: And like the fact that like, she was a woman and she, you know, was a, I believe it was the governor of Texas. Like it never came, it never came up. Like she did not, she did not campaign on it at all.

17:13Sarah Kopit: I mean, even to that extent, yeah, absolutely. I mean, even to that extent, you know, it's kind of funny. Like, every once in a while, I'll see Marco Rubio speak Spanish. And I'll be like, wait a second, what? Like, you know, and, you know, we are, we, well, anyways, let's not proclaim the end of, you know, a post-racial, post-identity politics in America just yet. We might be getting too far ahead of ourselves on that claim. I think there's still plenty of identity politics to go around. But yeah, it was an important midterms, right? Like it was an important midterms. It was a big midterms. And we can expect, I think you're right.

17:53Sarah Kopit: We can expect to see a lot of, quite honestly, gridlock, right? Like we can expect to see a lot of investigations, a lot of gridlock, a lot of, a lot of vetoes, a lot of, a lot of filibuster kind of stuff. And I think it's going to, you know, this vote was a big, like we said, repudiation of Donald Trump, but he's not out of office just yet. And we should expect a fight, to be honest with you. That's my opinion.

18:25Seth Borko: So, but it wasn't just politics this week. We had a lot of other things going on this week. We had a lot of earnings this week. There were a lot of things that will be impactful for the travel industry that are going on and still going on. We had some hotel earnings. What do you think of Hilton and Marriott and Marriott, mostly Marriott, Marriott was last week?

18:48Sarah Kopit: I think it's very interesting. I continue to be impressed by how strong the U.S. is, right? I mean, we saw that with also with Book and Holden's report earnings last night as well. I continue to be strong, how strong RevPAR continues to be, you know, mid single digit, high single digit RevPAR growth. continues. I think the thing that I want to get your take on, which is interesting, is the divergence. And Sean O 'Neill, our senior hotel reporter, has called this out years now. And I mean, it's no secret. Marriott doesn't make all of its money off of revenue growth, RevR. It makes plenty of its money off of fees.

19:34Sarah Kopit: And fees come from something called NUG, net unit growth. Can you open more and more units? Marriott has invested very heavily in its net unit growth. And as a result, its fee revenue has really exploded. And so I think, and I'm not actually looking at the article, so I'm trying to do this off the top of my head. So dear listener, forgive me. Let me just pull it up and get you the exact numbers actually. But there was a pretty dramatic, I think fee revenue grew by what? What was it? 14%, I think. Yep. So I think it's just really, it's just an interesting dynamic that's happening there. The asset light, basically the asset light model just continues to prove itself.

20:15Seth Borko: Continues to work. They continue to make a ton of money, the brands. So there has been, unsurprisingly, a lot of talk from the owners coming out of 2Q, where there were some concessions made. We've talked about that a lot on this podcast. and unsurprisingly, analysts have asked about it. Marriott specifically said it met with actually an owner's group and they are paying out more than ever under their programs, not just Marriott, some of the others as well. So it's, I don't know how much longer, if the owners continue to feel the pressure of inflation and the fees continue to show such growth and just even just the top line, they continue to do so well.

21:14Seth Borko: They're doing better than ever. As you said, the asset light model continues to show that it is a absolutely spectacular business model on the side of the asset light partner. I don't know. When, like in that push and pull, when the next push to the pull is?

21:31Sarah Kopit: Well, I mean, I think, yeah, I hear you. And I mean, I mean, I, again, I know we've deeply reported some of these struggles and the inflation side of things has been incredibly difficult for hotel owners. You know, I think when I have a couple of thoughts.

21:47Seth Borko: And the interest rate.

21:49Sarah Kopit: Oh, yeah. Well, yeah. Yeah. So I think that's exactly right. I've got a couple of thoughts on the cost pressure side of things. Oil is not oil matters for the airlines. It doesn't matter quite as much for the hotels. I mean, you got a heat and oil, you got to pay. And it matters. It matters on like the heat inside of things. And it matters on like the demand side of things. If customers are spending more money at the pump. But their biggest cost, like unlike an airline where like other than people, the biggest cost is fuel for hotels. other than people, their next biggest cost is probably like financing is very high up there.

22:23And there's no way that interest rates are going to get, they're not going to get substantial

22:29Sarah Kopit: financing relief. Let's put it that way. And the people side of things, which is, you know, from a hotel owner says it's a cost, but from a people's point of view, it's wage. And there's demand for more wage growth. You can't put wage growth back in the bottle, nor by the way, from an economist point of view, which you want to, but you can't put wage growth back in the bottle. People don't take kindly. They're not machines. They don't take kindly to wage cuts. And so that wage growth is there. The demand for more is coming. We know some of it's even baked in. I mean, I know in New York City, you know, the union signed multi-year contracts.

23:05Sarah Kopit: So some of those costs are baked in. The financing costs are not going to move dramatically. If anything, they're skewed towards higher if inflation remains persistent. So there's not a ton of relief coming other than maybe automation. There's not a ton of relief coming for the hotel owner's side. That said, I would tell you when I read Marriott's earnings report, yes, fees increased. But let's just go through some of these numbers. I mean, Revpar is how the hotel owners experience their year revenue per available room that's a that's an owner and management company metric let's just see what what i have here for the numbers because they were here um marriott reported rev par of six and a half percent growth year on year so they charged more per available room six and a half percent more this year than they did last year far above the three and a half to 4 % the company had projected in August.

24:09Sarah Kopit: Now, management teams do always like to lowball those projections, but you imagine they're lowballing by a point. So you imagine if they say four, they mean five. They came in at six and a half. That's pretty strong. And we also know they raised their full year outlook, expecting RevPar to grow between 4.5 % and 5 % for the full year. That's 2026. With all of the oil stuff, with all the craziness, with everything, 4.5 % 5 % of the year. In February, it had forecast 1.5 % to 2.5 % rev car growth. So rev car growth is happening. The strength is there. And that is being experienced by the owners.

24:46Sarah Kopit: And interestingly, a lot of the fee revenue is coming from incentive fees, which they only earn incentive fees when they hit certain performance goals. So incentive fees are basically bonuses paid to management companies when they do well. Marriott is mainly a franchise business. They also have a management business and, you know, they're kind of getting paid their bonus, their year, their management year end bonuses because RevPAR has been so strong. So, you know, the fee story is there and the fee pressure is certainly not going to lighten up anytime soon, but it was broadly, it was a broadly very positive report.

25:28Sarah Kopit: I do wonder, and I know that a lot of this is also skewed towards, you know, towards different segments and chain scales as well. Marriott just by nature, like Marriott's entire portfolio skews upscale. So it was an interest in earnings quarter. That's for sure. I think Hyatt also raised its outlook, if I'm not mistaken.

25:48Seth Borko: They all did pretty well.

25:50Sarah Kopit: Hyatt lifted its 2026 Revpar outlook to 5 to 5.5 % but all inclusive Revpar fell so the resorts were under pressure but the overall business grew but that's in that same ballpark as Merit which was like what their full year is 4.5 to 5 so all of these companies are pretty much telling us that they've got visibility through the end of the year and it's going to come out as like a mid single digit top line growth year for the hotel industry. That's pretty good, all things considered. The question is increasingly becoming how long can the consumer hold up against a hundred dollar barrel of oil?

26:31Seth Borko: Yeah, because affordability, just circling back now to the election and what happened last night. Yeah, affordability. There is, I suppose, a group of people who don't want this war in Iran for for purely philosophical reasons. But there's a whole lot of people that don't want this war in Iran because it makes everything more expensive for them here in the United States of America. So affordability, it was definitely on the ballot. It was. And decided.

27:07Sarah Kopit: And I mean, who is it? Is it James Carville? It's the economy, stupid. I mean, the whole reason why Trump won a second term was affordability, was the economy. And now again, it's always the economy. If people don't feel good, they vote out the people in office. If they feel good, they return them to office. I think it is, I'm oversimplifying, but I'm not oversimplifying by that much. And I think it's clear that, again, maybe you disagree with me, maybe you think the war on Iran was a smart move from a geopolitics or even national security perspective, but it's increasingly clear from an affordability increasingly clear even from an affordability from an oil price standpoint that the there will there has been the impact has been felt in affordability and the blowback has been expressed

27:59Seth Borko: at the at the ballot that's very clear yes yeah so it would not be a podcast if we didn't do

28:05Sarah Kopit: a little bit of tech talk well before we go my research can i tell you a little bit of tech talk something interesting because we just put out some new research about ai and destination

28:14Seth Borko: discoverability and visibility yeah you know what can i just before we get there tie it back to this midterm steam you know what was arguably not even on the ballot because it was so unanimously agreed upon what data centers oh of course could there is there one thing in this united states of America that everyone has agreed to hate rabidly data centers.

28:42Sarah Kopit: I was reading a Twitter or X thread that was basically documenting all of the local and state anti-data center ballot initiatives. And I think there was 40 or 50 of them. And I think with a single exception, every other one passed. I think it was like 43 out of 44 passed. And on both sides of the aisle, Republican and Democrats, they both ran against data centers. So the one issue not on the ballot because it was so unanimous to agree with. I think it says something about and I mean my opinion is that people don't actually care about data centers or server racks or GPUs. What they care about is AI and I think this is a symbol of how uncomfortable the general public feels about AI and expressing their backlash.

29:36Sarah Kopit: Yeah.

29:37Seth Borko: I mean, we sometimes, I think, you and I in our industry, the media, like B2B business, I think sometimes we lose sight a bit of just how detached and unpopular the concept of artificial intelligence is out there in the world.

30:02Sarah Kopit: Yeah. And our producer, Will Slickers, is leaving a little note about the resources involved in AI consumption.

30:11Seth Borko: That's what my kids always say whenever they see me using ChatGPT and Cloud, they're like, Mom, the water. The water.

30:18Sarah Kopit: By the way, is that true? I think that there is some debate over the actual resource intensiveness of AI data centers. But whether it's true or not it actually doesn't change the fact that people believe it um and i was going to say this exact thing which is that i had my first in the while i give we you and i both sir we give a lot of conference talks again shameless plug if you want us to come to your conference please reach out we'll do it and i gave my top my stand increasingly standard spiel uh about you know well actually it's not standard because it changes every couple months but my what i felt like a standard spiel about ai and for one of the first times i had someone come to me and say everything you said about ai was great but i just can't get behind the environmental damage and and i was like oh like it's a very i was surprised to hear that at a at a at a business conference yeah i think the backlash is is here and it is real uh and that's that is one of the few bipartisan things i bet you will get past in this congress maybe jeff maybe jeff bezos will put them on the moon he'll put them on an asteroid yeah maybe who knows it's fine the noise doesn't bother anyone up there yeah well yes and there's no water anyways uh you know whatever whatever ice specks we found on the moon will quickly burn up in a to cool a data center uh i mean they definitely need cooling water i mean there's no doubt about that i just don't know if the scale is as big.

31:46Sarah Kopit: Whatever. It doesn't matter. We're not a tech podcast purely. We just did some interesting work on AI visibility, and I want to just share some research about it. I think I've already spoken about some of this before, but we went into a bunch of large language models, your favorites, Claude, Chachipiti, a couple of others, Grok, Gemini, and we asked it to give us some travel recommendations. And also to match us up and say like, hey, kind of, you know.

32:19Seth Borko: Like just kind of like find me a restaurant in Clinton Hill, Brooklyn, like that type of thing?

32:23Sarah Kopit: Well, it was more detailed than that. It was kind of like sell me this pen. So it was like, hey, I'm a traveler and I'm looking for, I have a family and I'm looking for this. I'm a solo. I'm looking for this. That's my first anniversary. I'm looking for this. Sell me this pen. What do you think I should, where do you think I should go and what do you think I should stay? and one of the things we found is that we asked ai to pitch us pitch us on a destination the number one thing it pitched us on it sold destinations on you want to guess well i guess

32:55Seth Borko: it would depend upon give give i will guess but who were you some options no no who who were you

33:01Sarah Kopit: like who was the traveler across all profiles across all traveler profiles aggregated in

33:07Seth Borko: So my first guess was affordability, but maybe it's just stuck in my head. That's right. Yeah. That's right. That's right.

33:16Sarah Kopit: The number one thing, but it almost didn't matter what you told me. I'm a luxury traveler. It's my anniversary. I'm with kids. The very first thing, it sold you almost price. And it also sold a lot on connectivity. Oh, from where you're based, it's like fairly easy to get there. I think that's a huge miss. those are commodities like that is selling your destination position in your destination as a commodity affordable and easy to get to which is a million destinations and you will never you know that's a trap that's very hard to get out of for a destination and so it's just like really interesting like novelty comfort culinary romance nature privacy relaxation all these things showed up in like 4 % or less of AI pitches, whereas price showed up in one fifth of all AI pitches.

34:07Seth Borko: I wonder if that's because that's what most people search for.

34:11Sarah Kopit: See, this is the debate I've been having with myself and I'll open it up to our listeners. Is AI really that different or is it just reflecting back what we want? And we just are like, we think that we are these sophisticated travelers looking based on the, and it's like, really, like, I just want somewhere easy to get to within my budget. It's cheap.

34:30Seth Borko: Yeah. Well, but the thing that I'm surprised about that I would have thought that the large language models could have corrected for is if you basically told it, I'm a luxury traveler and I don't really care about that. And it still gave it back to you?

34:47Sarah Kopit: I'm not sure. I think maybe the luxury set gave slightly different sets. The other stat I have is we counted up each destination or recommended, say, give me a list of like five destinations. and we tally them up. And the top five most recommended destinations were recommended in 38 % of all AI recommendations. The same top five destinations get visited by 40 % of international arrivals. I think I've shared that before on this podcast. So basically, what AI recommends is highly concentrated, but guess what? The actual destinations in the world that are visited by travelers are also highly concentrated.

35:27Sarah Kopit: They're power laws to where people go and power laws to what AI recommends. And so I think it's so funny because I think it's interesting we see these problems and we call them AI problems. AI is not selling my destination properly. AI is not discovering my destination. AI is only recommending the top five. AI is not recommending. And it's like, are those AI problems or are they just travel problems? And because we haven't solved them as a travel industry, why should we expect why should we expect AI to solve a problem first that we haven't solved ourselves

35:59Seth Borko: yeah no it's a mirror I mean it's why they say you know it gives you all of the it has all of the same biases for good and usually not good that humans have that humanity has that is on the internet you know trained on the internet it's not a moral compass

36:19Sarah Kopit: it's exactly right it's not a moral compass and like we like don't like yeah we don't like what we see but it's trained on all of our comments and history and the websites that we've chosen to build and that get tons of traffic so yeah um just some some thoughts on on ai and technology as we as we wrap this session all right i wanna i wanna know if i'm getting my other coffee i'm putting up my christmas tree by the way

36:45Seth Borko: i am i don't like winter everyone i am a summer i am a summer summer summer child i enjoy and i i see fall as the precursor to winter and if there is there if there's only one thing about winter that is okay it is the glow of the christmas tree with the lights off in the living room That's it. That's the only thing.

37:12Sarah Kopit: It does sound wonderful. It does sound crazy. And so I have decided that, I don't know, I started to get all these Christmas ads.

37:20Seth Borko: And I was like, you know what? There is no law. There is no law. I am just, Halloween is over. I am going to put up the Christmas tree. And so that is happening tomorrow at the Copas house. I'm very excited. Also, though, speaking of the holidays, before we get to my peppermint latte, Which is why I even thought about the Christmas trees, peppermint, Christmas trees, all that stuff.

37:43Sarah Kopit: Makes perfect sense, of course.

37:45Seth Borko: Seth. And we will get this photograph of you for Will for you to put it into this podcast. So it was Halloween last week. Seth Borko. Now, we've talked about Seth scuba diving on this podcast before. Seth goes and cleans the fish tanks at the New York City Aquarium in Coney Island. I too. He went to the aquarium, ladies and gentlemen. He got in the fish tank. And when I say fish tank, I mean, you know, the enormous fish tank with all of the exotic fishes. Dressed as a shark. I did. Yeah. I don't think I will ever. And there is a photograph of this, which we will which we will post. I don't think I've I will never see a picture of Seth that I enjoy more than the one of the children looking at him while he's scuba diving as a shark.

38:38Sarah Kopit: It was so fun. We all dress up for Halloween. We call it a scarium. And all the kids come and they ask us questions.

38:47Seth Borko: That's what I'm... That was... It wasn't... Fish tank was not the word. I was saying fish tank. I meant aquarium. It was a fish tank. It was a fish tank, yeah.

38:54Sarah Kopit: And we have these little dye slates we can write on underwater. And we'll hold them up to the glass so the kids can ask us questions and we can answer questions about diving in the aquarium. and uh and and my favorite is always um well how are you writing to us and the answer is always pencil pencil how can you write underwater pencil so great um maybe we all know what a pencil is

39:20Seth Borko: in 20 years with all the yeah exactly exactly um but i digress that yeah there we go there it is

39:27Sarah Kopit: there it is look at that look at that costume all the kids yeah oh i love it so much and the guide was dressed as a as a pirate yeah yeah which is also you know just very very honestly

39:42Seth Borko: did you did you did you swim near the shark is the shark in that tank no there's no shark in

39:46Sarah Kopit: the tank the scary animal behind the tank was an eel a mori eel who's very big a big one yeah Yeah, it's huge. It's actually a huge eel. It kind of freaked me out.

39:55Seth Borko: Yeah, I don't enjoy the eels swim. I prefer the sharks.

40:00Sarah Kopit: Oh, me too. By far, I prefer the sharks. A thousand percent. Yeah, absolutely.

40:05Seth Borko: Did I ever tell you the story about when, we are getting long here, but did I ever tell you the story about when, I'll just tell you the story. So we were diving in the Bahamas. It was somewhere sharky. and you know how like when you're wearing your mask you still can like see your buddy's like facial expressions like it's a little bit you know masked but you can still see them so i'm looking at my husband my buddy and he just has this like grin on his face and i'm like what and he's like sure that's the same and like i look i i turn and this enormous nurture i bet it was huge it was like yeah they get so big it's just like swam right over me and it was it was so cool it

40:58Sarah Kopit: was it was so cool i love sharks this is a very pro shark podcast we love it yeah pro pro shark podcast um okay okay so so all right so the bet is no no we don't know yet the bet is uh just repeating the stakes the bet is um number of ai mentions on earnings calls from the big otas so we we i went through i counted how many times glenn fogel arian goran and brian chesky mentioned ai on their earnest calls the answer is 53 times expedia and airbnb have not yet reported so we're going to learn tonight but glenn fogel mentioned ai 27 times last quarter this quarter he mentioned it 18 times so i'm on track for the peppermint coffee right now sarah i'm sorry to tell you this

41:47Seth Borko: my my my uh ai agent is quaking in its boots right now it can hear us i think and it's it's

41:56Sarah Kopit: getting scared um so i'm on track but we still have aria i mean arian in particular and and brian can talk a lot about ai and save you brian chesky is gonna save me brian if you're listening Come on Ryan

42:10Seth Borko: Come on do me a salad

42:14Sarah Kopit: But we will know the full winner by the end of this week And next week When we record our live Podcast at the Commerce Summit Where we will be drunk On stage I think we decided it was an Irish Government coffee I think And so we will have the answer For you The suspense is built in Thank you for listening all the way to this part of the podcast

42:42Sarah Kopit: But we'll know on stage next week where we'll be talking about OTAs, agents, commerce. All things commerce. All things how you buy stuff. By the way, you don't have a ton of time to tell us, so get in quickly. But if the thought strikes you, if there is a topic in travel commerce that you would like to see discussed on stage, shoot me or Sarah an email. We're going to be on stage. We're going to be interviewing people. We're going to be having these conversations. would love to work in to the event for our listener podcast. So let us know.

43:13Seth Borko: All right. I think that's all she wrote. Thanks for listening. Sounds right. And we will see you in person next week. Have a good one.

43:28Seth Borko: ZS is a global consulting and technology firm that partners with companies to improve life and how we live it. Working with the world's top hospitality brands ZS brings together data, science, technology, and human ingenuity to transform ideas into customer loyalty. They're ready to help you elevate guest experiences, improve operations, and uncover preferences and motivations through their AI-powered solutions. With more than 1 ,700 clients in over 170 countries, ZS has built the expertise, fortitude, and vision to help you deliver impact right where it matters.