The $100 Billion Travel Market Everyone Underestimates

0:23Seth Borko: The number of the week is 99.7 billion. That is Skift Research's estimate of what U.S. retirees spend on travel annually circa 2026. So that's nearly$100 billion from a segment the industry largely treats as, you know, sort of niche. So Seth and I have some thoughts. We're going to talk about the so-called silver tsunami and what it means for travel companies. And we are also going to give you a little bit of a preview into what Seth and I are looking forward to from Skift Global Forum, which takes place in New York City next week, September 22nd through the 24th. Be there or be square. So, Seth, this$100 billion, what do you make of it?

1:07Seth Borko: Yeah.

1:08Sarah Kopit: It's a lot of money. It's a lot of money. You know what I make of$100 billion? It's a lot of money. um no i think this was so um this was a new trend life cycle report that we put out on retirees and people who travel in retirement and um yeah we call it the silver tsunami lindsey roshky who's our um who's our senior research analyst who's an excellent uh analyst did this piece and she started looking at millennial and gen z and we've now moved on to include gen x and boomers and have started looking at retirement travel and um i think it's a really fascinating topic i think it's totally overlooked and in some ways it's an even larger opportunity than the gen z opportunity so it's fun to talk about gen z because we want to talk about um all the slang and um you know the delulu kids these days who are uh chops or whatever fairs fairs you see seth doesn't even

2:13Seth Borko: know see i don't even know i i have a 14 year old and a 12 year old yes i i i live with them i know the lingo but yeah fairs yeah i i don't know that's my fault it's what you would call a skill issue i believe uh on my is that what they call it is that yeah okay i don't know um but the

2:33Sarah Kopit: The point is, we love talking about Gen Z. It's the next hip, cool, new thing. We love talking the same talk about millennials. But what if we look upwards? What if we look a little older? And I get that the retirees are not the most exciting and coolest generation. And yet our new research found that they're going to spend at least$100 billion. And that's in the United States, by the way. It was really hard to get a global estimate. But the UN, the demographics numbers, suggests that there's going to be 2.1 billion people who are age 60 or above by 2050, which is within our lifetimes, up from an estimated 1 billion today.

3:15Sarah Kopit: So there are a billion travelers who are 60 plus, 2.1 billion in the next 25 years or so. That's almost basically the population of China or India, right? We would happily talk about a billion travelers in India as a huge opportunity. And here we have today a billion travelers who are 60 plus. And so it's really interesting. And by the way, you know, that 100 billion number is for the U.S., but actually the place where the population is aging the fastest is Asia and also Europe. And so this is just it's a massive, massive market. And I was really glad we got to do a deep dive into it.

3:56Seth Borko: Well, and it makes sense because, you know, when people retire, I mean, it is always the dream, like whether people get to actualize that dream, you know, is up for discussion about, you know, basically how old they are and how healthy they are. But whenever you ask somebody when they tell you they're going to retire, what are you going to do? Their hopes and dreams is usually spend time with the grandkids and travel.

4:17Sarah Kopit: That's it. So, yeah. And increasingly, those two things are not at odds, right? It's the same sort of thing. we asked gen x and baby boomers um some survey questions i'll actually share my screen really quick i've got a part a part of the silver tsunami will be pretty soon not it's not the peak of it now i'll show you another chart but they're getting there i mean gen x is not retired yet um but in this trend cycle we look out into like 2016 and by then they absolutely will be actually this report looks out this trend life cycle looks out so far actually includes millennial retirement which we'll we'll talk a little bit about but the point is well you know well seriously you know i'm giving a bit of a segue a bit of a preview for global forum which is our another topic but i'm going to give a presentation about you know the travel sack and one of the parts the travel sack is consumers and we're talking about things that are changing and one of my things is going to be demographics are changing how do you invest and if you gear towards later in life retiree family travel the challenge with the zoomers is that it's very trendy it's very trend forward and those trends will shift as gen alpha becomes and you know whoever comes after them beta i don't know charlotte whatever we'll call them and whereas the retirees they do kind of want the same thing and there will be wave after there will be a boomer retirement wave which we're in there will be a gen x wave and there will be a millennial retirement wave let me quickly share my screen.

5:46Sarah Kopit: So this is percentage of travelers of specific generations who agree with the following statement. The first is that I would rather spend my savings on travel experiences now rather than preserve them to leave them as an inheritance. 33 % of Gen X and 34 % of baby boomers strongly agree. A further 36 % of Gen X and 38 % of baby boomers somewhat agree for a huge super majority of almost 70 percent of um older travelers agreeing that they would rather spend the money on trips than pass it on to their next of kin what do you make it out yeah i'm actually surprised

6:24Seth Borko: it's not bigger i'm surprised that that dark blue the strongly agree isn't isn't larger i don't know i do i've i keep on telling my parents to spend the money go spend it go take that well i think that's one of these interesting things this generation is going to bequeath a travel

6:43Sarah Kopit: inheritance yeah right i think they want to they want to you know you can't take it with you spend them either spend the money now or better yet spend it on trips with your family well all of you are still around absolutely and similarly that's interesting that's i i'm i've

7:03Seth Borko: jumped ahead of you. I'm now on the second question. I feel a stronger sense of urgency to travel now than I did 10 years ago. Yep.

7:10Sarah Kopit: Yeah. I really like that one. And here you see Gen X in that prime sweet spot. As the baby boomers get older, the problem with traveling and retirement is that you have more time to do it. You have more money to do it, but you are frailer. The body is in less condition for it. So there's a sweet spot where you're there and baby boomers are start are reaching that sweet spot but gen x is still uh what is it fit in fit in um it's still fit and they're all the things they can see the they can see the the light at the end of the tunnel the metaphorical light at the end of the tunnel that's it i mean that's the thing not to

7:53Seth Borko: like philosophical here on the skiff travel podcast but i will allow me for a moment i mean gen x is I'm a younger Gen X. I fancy myself a Xennial. We've hit that age where we are all mortal. I've never been to Italy, Seth. I've never been to Italy. So this statement, this I feel a stronger sense of urgency to travel more now than I did 10 years ago, that hits me in my core. So that surprises me none. It only surprises me that the dark blue is not bigger. That's it.

8:31Sarah Kopit: And listeners, audio-owned listeners, it's Gen X 34 % strongly agree. Baby Boomers 25 % strongly agrees. But Gen X has that big gap. And then both Gen X and Baby Boomers 36 % somewhat agree. So the majority of travelers agree, but Gen X really outweighs them, perhaps because, as Sarah suggests, this is a generation starting to come to grips with its own mortality. which is an awfully deep topic for the skiff travel podcast and yes i mean we we were so we're so glib about the idea of a bucket list but it came from a movie of all things about yeah in the bucket and so i i think that there is strong motivation there to travel i mean i believe it

9:12Seth Borko: was just last week on the skiff travel podcast set that i disclosed to all of our dear listeners that I had my new instinct AI agent delete my subscription to the death clock. You did. I forgot about it. So I believe this lines up perfectly with the research that we're talking about just this week. Yes.

9:41Sarah Kopit: I think the lesson for travel brands is how to build the right product for these kind of people. We don't have a baby boomer representative of on the podcast but my parents are baby boomers and they have found they are in their cruising era in the luxury cruising era they love um explora is their new favorite brand they will not stop talking about it we know them i know we do yeah yeah we know them yeah um and then the gen x i think a little more active they want that trip to italy um and then interestingly this is our projected travel spend, we think retiree travel spend, we said 99, almost 100 billion today, we think it's going to continue to grow pretty dramatically out until 2035.

10:24Sarah Kopit: And we think it will peak at about$150 billion in the US in 2035. So within the next 10 years, this trend is going to only grow and continue to peak. That is when there will be enough baby boomers alive to still be in retirement, but also Gen X will have entered their peak retirement. And those two tsunamis, those two silver waves of baby boomers and Gen X will coincide. What's interesting is that there'll then be a pretty steady decline in travel spending.

10:53Seth Borko: What's going on in 2041?

10:56Sarah Kopit: You want me to be morbid about it? I mean, you know what's going on. I know.

10:59Seth Borko: I do. Yeah. I got you.

11:02Sarah Kopit: So then the retirees will...

11:03Seth Borko: We can skip that. Yeah.

11:05Sarah Kopit: We'll enter the next phase of their life. But at that point in 2041, millennials will then pick up, will then be entering retirement and they will pick up. And, you know, I think it's overlooked. You know, the Gen X generation, the constant complaint is that they are overlooked. And it's true because they are they were significantly smaller generation to be. Baby Boomers were, of course, born in that post-World War II, which feels so long ago. But in that post-World War II, you came home from war. You never talked about it again. You started a family, white picket fence, two and a half kids. And they had the Baby Boom.

11:38Sarah Kopit: The Gen X was that in-between middle generation. And then the Baby Boomers, which were the largest generation in history ever at the time, then had their kids, which would be the second largest generation, the millennial generation, who have in turn shaped all these trends. And I think the Zoomers are the kids of the Gen Xers, and they might have the same fate of being another sort of in-between generation. So this is a really interesting trend. I'm really happy with this new trend lifecycle report. And I think it speaks to sort of that transformation. You know, it even speaks to something we heard not at the Global Forum, but at the Data and AI Summit.

12:13Sarah Kopit: And I wonder if it'll come back up at the Global Forum. Weren't we joking? Who was it who said on stage at Data and AI that they wanted to take their hotel brand and expand it into elder communities?

12:28Seth Borko: It wasn't on stage. It was us in the green room.

12:32Sarah Kopit: That's right.

12:33Seth Borko: You and I started building our own travel business, Seth.

12:39Sarah Kopit: That's right. But I thought it was inspired by a comment someone made on stage. But I think we are increasingly going to see these ideas of, you know, hotels are increasingly merging with residences. We've seen that in how, you know, Four Seasons Residences is merged, is increasingly merged with Four Seasons Resorts. I hear that strategy all the time. We're now increasingly seeing, you know, communities. I'll be interviewing, one of the people I'll be interviewing at Skiff Global Forum is Steve Case, the founder of AOL back in the day. And he's now focused on these exclusive, things called the exclusive resorts, exclusive collections.

13:12Sarah Kopit: these kind of community-based resorts. And increasingly, as the boomer generation, which really built the travel industry, which defined it, which is still their core customer as they age and as they retire, they started with traveling. Then they bought the Four Seasons condos and they lived in the hotels. And you do have to wonder what will come next as this generation, that's why we're seeing the boom of luxury cruises. I mean, there is clear capital infrastructure, building and investment. behind whatever the boomers do next in their lives. First, it was the all-inclusive resorts. Then it was the four-season condos.

13:48Sarah Kopit: Now it's the luxury cruises. And I do think there is. We were sort of joking about a hotel-branded retirement community, but I think there's something to the idea.

13:59Seth Borko: I would agree. I would agree. So you mentioned it a little bit, but who are you most excited to talk to or hear from next week at Skiff Global Forum? Seth and I will both be on stage, like, running around. So if you're planning on coming, come say hi.

14:15Sarah Kopit: I have a serious answer and also a serious answer, but a more fun answer. I'll give you my serious one first. Sean O 'Neill, who's just one of my favorite reporters, one of my favorite human beings, is doing a session with Decius of Amadeus and Steve Singh of Spotnana. and these infrastructure companies that actually feature prominently on our newly, like as of this week, just released new power list about the builders that you and I work closely on. Yeah. These infrastructure builders, global distribution systems, these back-end corporate travel platforms, super interesting. They are putting a lot of money into AI, a lot of money into agents.

15:00Sarah Kopit: I think you're going to, you have a lot of opportunities to hear from, and I'm still excited to hear from Glenn Fogle, but you have a lot of opportunities to hear from the Glenn Fogles of the world. And they're always going to tell us that it's all about brand, that no, don't worry, we're going to, we're not going to be disintermediated. They obviously have to say that. They might be right, but they have to say it whether they're right or wrong. I'm excited for that, that deep, that deep travel infrastructure panel to talk about where they are seeing those builders themselves are seeing AI go.

15:29Sarah Kopit: It's a bit of a nerdy topic, but that's sort of the point of the Global Forum is to, in the funnest way possible, to nerd out on travel. Who are you excited for?

15:41Seth Borko: So, I mean, it may be like kind of cliche, but I am legitimately looking forward to listening to Rafa, Pepper, or Brian Chesky with questions about turning Airbnb into a hotel brand. um i i'm you know it's such an interesting topic that airbnb is going into hotels so strongly i mean it seems kind of like like an oxymoron um but you know they're going there and i'm i i had the opportunity to talk to him about this oh i was out in san francisco I think in the spring and you know he it was just it was so interesting to listen to him talk about like how he'd kind of taken his eye off the ball with hotels and you know for quite a long time he'd never stayed at a hotel it's like I don't know he's like I started Airbnb like I I just they weren't on my radar and now how they're kind of not kind of they are getting into that business

16:44Sarah Kopit: they're not kind of they're they're very much getting into it um um you know the um oh i'm just playing my name jesse um they hi i mean i've interviewed him before they have this great leader in their hotels business jesse yeah who is is building it out with a serious mandate to grow and i mean the most recent quarterly earnings that airbnb reported was just um a beast in the in the in the positive sense of it, in that they just posted huge growth, expansion into hotels, into services, into experiences. Their CFO was very smart about quantifying their AI, and AI, not just we're using AI, but AI in terms of how we're driving ROI out of AI.

17:31Sarah Kopit: And I think, you know, it's interesting. Chesky has been a really thoughtful thinker about AI. He's been deeply involved with the YC, Y Combinator community. Y Combinator backed Airbnb. Y Combinator was run by this guy named Sam Altman, who went on to found this company called OpenAI. So Brian Chesky himself has a lot of deep connections into Sam Altman, his community, and the AI world. And yet they felt a little bit like an AI laggard. They were not eager to do all this stuff. And now as a lot of companies are like, oh, we're struggling to see ROI on our AI, Airbnb is like cost to serve our chatbots down 16%.

18:13Sarah Kopit: We've got this launched, we've got this quantified, and we're growing, by the way. So I'm really impressed with how they've played that, both actually implementation and how they played the press and that Wall Street game, so to speak.

18:27Seth Borko: So we also, speaking of OpenAI, we have Brett Taylor, who's going to be on stage on the first night of Global Forum. And he is the chairman of OpenAI. And he is currently also with Sierra.

18:43Sarah Kopit: Which is another AI company, another like broad AI infrastructure platform.

18:47Seth Borko: Yeah, I mean, we were kind of joking about it earlier, but, you know, I don't think we talked about it last week on the pod, but, you know, this kind of, there was this zeitgeisty eruption of conversation about how our robot overlords are actually going to end human civilization, which this is not a new conversation. like I think we you and I have talked we've talked about it a lot and we've talked about it on this podcast yeah we talked about on this podcast a lot but it it was interesting that it kind of peaked kind of the the broader social it's what everyone was talking about you know like my mother called me and she's like are the robot overlords gonna kill us all right like it's is a very um it went mainstream is what it did.

19:40Seth Borko: Donald Trump talked about it on the golf course, you know, like that type of thing. It takes a lot to get there with any conversation these days.

19:47Sarah Kopit: And what's clear, so and what we're referring to specifically is this one specific tweet from an AI, an AI researcher who was in one of the large labs, I forget which one, quit, resigned. He was anthropic.

20:00Seth Borko: I think he also worked for OpenAI. I think they all worked for

20:03Sarah Kopit: all of them at one point but yeah quit and posted an open letter on twitter saying i morally can't support this because i legitimately think that there is at least a 10 chance that ai ends human civilization and the the debate has been more or less than 10 percent with some way in saying it's way more than 10 others saying it's way less than 10 but it's kind of this interesting thing about press cycles media politics where what is the risk of ai killing us when it was just a sort of vague risk of AI risk. And what does alignment risk mean? And what does misalignment risk mean? But now everyone has sort of anchored onto this 10 % figure.

20:42Sarah Kopit: And now we have a real proper anchor that I think the average American and average global citizen can really understand of like one in 10. Well, I've got 10 friends and one in 10 of those, I know what that means. And that's probably a lot higher than I thought it would be. Yeah.

20:59Seth Borko: And 10 % is not nothing.

21:02Sarah Kopit: What was your take on this whole thing?

21:06Seth Borko: So it was, for one thing, I was surprised it reached the mainstream level. I was surprised that it got out there only because, like, it's almost impossible with the algorithms these days for anything to break through each of our, like, siloed algorithms to get there. So that was the most surprising thing to me. Also because this is not a new conversation. Like people have been having it for the last couple of years. So, you know, he's just the most recent one. So why he broke through and others didn't, you know, that's another conversation. But, you know, I think that being a Xennial, you know, I watched war games many times.

21:54Seth Borko: And it feels a little bit like that. It feels like we may have to come to terms with some mutually assured destruction. The concept of that.

22:04Sarah Kopit: I didn't feel the war games. And for our Zoomer listeners, what is the plot of war games?

22:11Seth Borko: Oh, gosh. Matthew Broderick, a very young. It was Matthew Broderick, right? Yes. Yes. Yes. Okay. Matthew Broderick starts playing a game. I don't remember where the game came from, but he starts playing a game.

22:27Sarah Kopit: he's a computer hacker and he accidentally hacks into the department of defense computers and he doesn't realize he's not playing he thinks he's playing a game and it's actually geothermal

22:37Seth Borko: nuclear war that's what he that's what he thinks gosh i haven't thought about this in forever and so then it's kind of like a it's a bit of a chase they try to catch him but then there's the there's an infamous line at the end where they they start playing on the big board with you know the fate of the world's on the line they're playing tic-tac-toe and they play and they play and they play and they play and then the computer comes up and says well whoever i think the only way to win is not to play yeah and yes you know yeah well i i will say i felt this week very much

23:17Sarah Kopit: the nuclear war, nuclear weapon analogy creep in because there has been a lot of talk about AI risk and just in general AI burnout. I think people have become very disenchanted with AI-generated imagery and AI-generated signs and AI-generated emails and data centers. We've heard all of that before. And it's clear that there's been a growing bipartisan political backlash against AI in the data center movement. And I think that was sort of the stepping stones. But what was so interesting to me is I was, you know, listeners will know I'm a big reader of the Wall Street Journal. And the Wall Street Journal immediately, I learned this from you, Sarah, but their day two story, their day one story was, of course, 10 % chance of ending the world.

24:07Their day two story was, oh, and by the way, China doesn't care.

24:11Sarah Kopit: They're pushing ahead anyways. China's, China, China, or it was something, hell there's something like china's worried about risk but first it wants to beat the u.s and that that mutually assured race to the bottom was the first time i really i mean maybe i'm just slow but it was the first time i really felt that that really not even loose connection but really sharp connection between the nuclear war arms race and the ai model arms race where it's like now there's all of a sudden by by bipartisan concerns that have gone fully mainstream about ai development and the immediate response is well yes but if we don't build it someone else will

24:52Seth Borko: china russia yeah you know and so i don't know i i i do think that it will be regulated i i have i'm not a you know a yeah or a political scientist but i think the united states will ultimately regulate it like banks and airlines and all the other stuff like nuclear

25:16Sarah Kopit: like nuclear weapons which are incredibly heavily regulated there hasn't been a new nuclear power plant built in 50 years because of regulation kind of regulated as i as i know you do not agree with

25:26Seth Borko: seth yes that's right but uh but but yes yes i do i don't like i said i have no idea where what that how that works with with china and russia but yeah well and it's interesting i mean we are

25:40Sarah Kopit: not to get too philosophical not to get too geopolitical so i apologize if this is your early morning wake up and this is what we're talking about i i deeply apologize but you know we're still figuring out the the actual question of nuclear weapons and nuclear proliferation it's not what it was during the cold war but but look to iran to see that it is far from a solved problem you know absolutely 60 70 years after the bomb so this will not be something that like it reminds me that there's nothing new under the sun and that we will work towards a solution but this will be far from solved and then there will be another generation that doesn't even remember what we were scared about well just like with nuclear power and nuclear weapons where there's a new generation that's like i don't understand why we we're worried about the environment worried about clean power we're worried about coal and we have this this beautiful potential limitless atomic power why didn't we do more with this and it's like you don't even know how scared people were scared out of their minds in the 50s 60s and 70s and so the millennials will be retired by then

26:41Seth Borko: they'll be on their cruise vacations by then they will they will we did have one other um i mean it's like skift is is firing on all cylinders right now i will say we have a very big winner of the week this week don't we we do we do the winner of this week is amadeus's desius

27:00Sarah Kopit: who i'm desius it's val morbida right desius val morbida of amadeus who i actually mentioned earlier and he's our winner of the week this week because we actually ranked him number one on this year's iteration of the skift um power list power rankings the skift power rankings um every year we give a theme to the power rankings. Well, year one, we didn't. We just ranked pure power, but we got to keep it fresh. And so we've had themes in every year since. This is year three. And the theme this year was what we call the builders. Now, Sarah, this was your brainchild, your baby. Tell us what the builders means.

27:37Seth Borko: So it seemed very 2026 era, like the vanguards right now, the people who are really changing the world, frankly, are the ones that are behind the scenes building products, shipping products, building technology, just because there is, I mean, it's happening so fast. A lot of it is linked with AI. But so we went through, Seth and I, and the editorial team, the research team, we went through and we like cast a wide net. We try to look for all of the people who are really making significant plays, really taking like audacious big swings and building new things and embedding themselves into the infrastructure of the travel industry.

28:28Seth Borko: And we did a methodology. We whittled them away. We came up with our top 25 list. It's a mix of, you know, smaller companies who are really being incredibly innovative and really doing things that are different and new and changing the way that the industry operates and the way it looks. And then we also recognized, of course, the bigger stalwarts who have kind of their fingers or their tentacles in every single thing. Like they are building the products that underneath, like when you go down one layer, the whole industry shuts down if what they are doing goes away. So that's how we kind of looked at this year's list.

29:13Sarah Kopit: One of the internal talking points we used a lot was what we called the 72-hour test, which is if your technology is down for 72 hours, what will happen? What are the dependencies that you were built around and what will happen? And that was one of the big reasons why Amadeus came first. I mean, this is essential infrastructure for so many parts of the travel commerce ecosystem. And they are aggressively investing in AI and agentic bookends and MCPs. So it's really exciting to see this sort of stuff. But I thought there was a really nice mix within, let's say, the top 10 of our list, where we had the big incumbents who are working to reinvent themselves.

29:55Sarah Kopit: That's the Amadeus of the world. We have the startups of yesteryear, but who have gone public and IPO'd with the basis of their technology and are making a real impact and shaking up their industries. That's Navon in corporate travel. That's Airbnb, of course, in the short-term rental space. And then we have the real aggressive startups who are innovating, both the startups who are not public but have reached scale, like the Muse and the CloudBeds. Yeah, like Muse and CloudBeds. And then the startups that are still feel a little fresher, but have reached unicorn status, like Fora, who is rebuilding the travel agency model with AI at its center.

30:36Sarah Kopit: Or like Nuity, not a unicorn, but another really aggressively growing startup that's still in that hyperscaling growth phase. So we've got the hyperscaler startups that are really AI native. We've got the larger startups that are unicorns, are big companies that are doing great stuff and have raised. We've got the recent IPOs that are transforming, have already transformed their space. And we've got the legacy players who are Oracle as well is up there, who just the industry cannot operate without and who we would be remiss to not include on a list of builders. Because if you build something that is so essential, you have to get some recognition as well.

31:15Sarah Kopit: Now more than some, you have to be recognized, not just some recognition, Yeah, they're pretty high up on the list.

31:20Seth Borko: So, yeah, so we recognize these companies and the builders behind them, the actual people who are the ones leading the charge within their organizations. So, yeah, they are. So congratulations to all 25 winners or, you know. Yeah, winners. We call them winners. Very powerful people who are on this year's Skift Power Rankings list. So check it out. It's on Skift.com. As for loser of the week, I don't know, Seth, we've already gone through like potentially humanity.

31:53Sarah Kopit: Humanity.

31:54Seth Borko: Humanity. Anyone else come to mind this week? You'll forgive me for nerding out, but this Chairman Warsh, the chairman of the Reserve.

32:08Sarah Kopit: Oh, what happened? He is stuck between a rock and a hard place, Kevin Warsh. Yeah. Let's check. This will be will be airing on on Friday, but we are recording this live as as the Federal Reserve makes its its rate hike. And let's see what they have decided. We will have we should have an answer right now. Fed raises rates for first time in three years voting against Trump's wishes.

32:34Seth Borko: What what a rock in the hard place between a rock and a hard place for Kevin Warsh.

32:39Sarah Kopit: Yeah, that's why he's our loser of the week for sure. I mean, he can take it because he's been appointed to one of the most powerful offices in the land. But he was appointed by Donald Trump with the express, express intent to cut rates. And in his first major decision, he has raised rates to fight inflation.

32:59Seth Borko: Because he had to.

33:00Sarah Kopit: Because he had to, because he had to fight inflation. Inflation, many causes of inflation, some of them more complex than others. about money supply and more money chasing fewer goods and wage growth. This was a very simple cause, case of inflation. Sometimes we get a simple A to B relationship and oil above$100 a barrel is about as simple an inflationary relationship as you can possibly get. Yeah. So Donald Trump appointed Kevin Warsh, chair of the Fed, to cut rates. He instead raised rates to fight inflation against$100 oil caused by... By his boss. Donald Trump. Donald Trump. And in doing so...

33:44Seth Borko: There's your economics lesson for this week, everyone.

33:49Sarah Kopit: It's a big deal because, you know, the 10-year Treasury has already been trending, touching the 5 % interest rate mark. And this will only continue to put upward pressure on rates, as we would say in the bond markets across the curve and we you know we had skipped like let's talk about travel for a second we don't need to talk broad economics i wonder what they just saying about boomers we built resorts for them and we built condos for them they built cruises for them cruise ships are in let's just talk cruise ships incredibly expensive they take multiple years you know how you do it you take you issue debt you raise you borrow money and that cost of borrowing is going up you know how does disneyland live tourism how do you attract how do you build stadiums for the world cup how do you build stadiums uh for for concerts how do you build cruise ships how do you build hotels it all comes down to the cost of borrowing this is not just like an indie abstract conversation this is a serious business conversation yeah i i would be unsurprised if every major travel CFO is not having this conversation, looking at their borrowing costs, if they have not done so already.

35:05Seth Borko: Yeah. Last week in my newsletter, I wrote that it must have been a hell of a week for real financial longs who had the civilians in their life coming up to them and be like, so tell me about what's going on in the bond market.

35:22Sarah Kopit: it's exciting times for them i was always an equity market guy and the joke was that equity markets are like yeah we market guys are like dumb brutes stock go up yeah burdens up stock up and the bond market guys would be like french phds talking about yield curve and inflationary expectations and all that stuff um it's i mean this is a big deal it's gonna it's gonna affect everything i mean it's gonna affect the housing market it's gonna affect the mortgage rates which Which is in turn going to affect, you know, short-term rentals. It's going to affect Airbnb's short-term rental supply. It's going to affect hotel development.

35:56Sarah Kopit: It's going to affect everything.

35:59Seth Borko: Unsurprisingly, it actually didn't have much of an effect here, like live. But it was because it was already baked in. I mean, you and I said it. Like, before we started recording, we didn't know what was going to happen. And you and I were both like, well, he has to raise.

36:11Sarah Kopit: He has to raise.

36:13Seth Borko: The street knew that, too. So there you go. All right. I digress. I think we should let everybody go for the week.

36:19Sarah Kopit: All right. Yes. Let him go.

36:21Seth Borko: And we will see you. Yes, we will see you next week at Global Forum. If you haven't got your tickets, please go buy one. Seth and I will be recording live on Thursday, actually, a day later. But next Thursday, we'll be recording live from Skip Global Forum. So come and say hi.

36:37Sarah Kopit: We'd love to see you. Have a good one.