Jump to content
DOSBODS
  • Welcome to DOSBODS

     

    DOSBODS is free of any advertising.

    Ads are annoying, and - increasingly - advertising companies limit free speech online. DOSBODS Forums are completely free to use. Please create a free account to be able to access all the features of the DOSBODS community. It only takes 20 seconds!

     

Would you invest in Airlines, Travel, Tourism, Catering, Hospitality....etc...


Recommended Posts

Here is the thing. There will be a fundamental change in where liquidity finds a home .
 

The approach to investment has changed. Let’s assume best case scenario and this Coronavirus ‘blows over’ by March.

Yes the current catering, tourism, travel stocks will bounce.... but....

.... they are not going to be a lure for investors long term. 

We can assume a similar virus will come along every 20 years or so. ( we had Hong Kong flu in the 60s and Asian flu in the 70s.. and etc). 

Would you invest a few million dollars in a new business in say....cruise liners...a restaurant chain.... a new airline.... a catering business.... a travel company......

Nope. I did not think so.

All this money and liquidity will find a new home.... industrials, energy, manufacturing.....

Thoughts? 

Edited by Vendetta
Link to post
Share on other sites

I'm not remotely worried by the virus, but they'll need to make shopping, going to the pub, etc less of a horrific experience before I start spending more in these sectors again.

I was offered work away and declined it.  I was never a fan of the inhumanity of flying before, and it would probably tip me over the edge now. :/

9 minutes ago, Vendetta said:

industrials, energy, manufacturing.....

You might like the 'Credit Deflation'thread.  :D

Edited by Loki
Link to post
Share on other sites
Posted (edited)
2 minutes ago, Loki said:

I'm not remotely worried by the virus, but they'll need to make shopping, going to the pub, etc less of a horrific experience before I start spending more in these sectors again.

 

You might like the 'Credit Deflation'thread.  :D

The thing is anyone with large amounts of money is not going to open up a coffee shop or travel business. No one in their right mind will begin a start up business in these sectors - far too risky when a pandemic comes along every 20 years....

Edited by Vendetta
Link to post
Share on other sites
12 minutes ago, Vendetta said:

Here is the thing. There will be a fundamental change in where liquidity finds a home .
 

The approach to investment has changed. Let’s assume best case scenario and this Coronavirus ‘blows over’ by March.

Yes the current catering, tourism, travel stocks will bounce.... but....

.... they are not going to be a lure for investors long term. 

We can assume a similar virus will come along every 20 years or so. ( we had Hong Kong flu in the 60s and Asian flu in the 70s.. and etc). 

Would you invest a few million dollars in a new business in say....cruise liners...a restaurant chain.... a new airline.... a catering business.... a travel company......

Nope. I did not think so.

All this money and liquidity will find a new home.... industrials, energy, manufacturing.....

Thoughts? 

Given the current climate, I would put anything i had int PMs and hard cash.  

Link to post
Share on other sites
9 minutes ago, Vendetta said:

The thing is anyone with large amounts of money is not going to open up a coffee shop or travel business. No one in their right mind will begin a start up business in these sectors - far too risky when a pandemic comes along every 20 years....

Loads of people will -- it is a dream, a bit like retiring policemen and pubs.  Perhaps my point is your phrase 'no one in their right mind' -- there are loads of them, and some have lots of money.

But it certainly is going to be a horrendous 2021.

Link to post
Share on other sites

@Vendetta, if I understand the deflation thread correctly, then the argument would be two-fold:

Catering, travel and tourism will not be growth areas in the coming cycle. There might be a short-lived bounce after the virus clears. There may also be certain niche sub-sectors as the new rich in the "roaring 20's" want to show off. However, this decade will be one of increasing struggle for a large part of the population as inflation eats real wages (and pensions) for many, and pushes up energy costs and the costs of debt. There will be winners in the industrial sectors that benefit from government investment and re-shoring of supply chains, but many losers, particularly among the over-leveraged.

In that sense, you want to be investing in the new growth sectors, including energy, telecoms*, commodities (e.g. mining), and later on some industrial sectors. Catering, travel and tourism will be in decline.

That said, to quote @DurhamBorn, declining sectors can make you good money. This happens because nobody wants to invest, so there is less competition for the remaining players. For this to work, it needs to be a sector where there is a barrier to entry, and it is those companies who have already made the investment to clear that barrier, and who are in relatively good financial shape, who will benefit as their competitors go bust, and no new competition enters. I don't know what that would look like for the sectors you mention. Perhaps cruise ships? - but that sounds very risky, as they are the epitome of non-essential spending, and are ground zero for the pandemic impact.

From a personal perspective, maybe the most important "investment" is learning to be genuinely happy while consuming less and less?

 

*Telecoms incumbents probably straddle the two classifications: there will be investment, but the ones who have already put in their networks will do really well from lack of competition and barriers to entry (because it will be expensive for new entrants to borrow to invest). Big oil also probably benefits from both factors.

Link to post
Share on other sites

top end travel will probably do well, as I suspect a lot of people will have stared mortality in the face and say 'fuck it - me and the wife are going to see the pyramids before we die, expense be damned'.

Bottom end travel and entertainment is, I think, dead for the foreseeable.  They work by packing people in, and in general they are the customers that WILL travel when ill, WILL ignore social distancing, etc etc.

So an exclusive cruise sailing experience might do very well.  a huge cruise liner with thousands on board - nah.

Link to post
Share on other sites
24 minutes ago, wherebee said:

top end travel will probably do well, as I suspect a lot of people will have stared mortality in the face and say 'fuck it - me and the wife are going to see the pyramids before we die, expense be damned'.

Bottom end travel and entertainment is, I think, dead for the foreseeable.  They work by packing people in, and in general they are the customers that WILL travel when ill, WILL ignore social distancing, etc etc.

So an exclusive cruise sailing experience might do very well.  a huge cruise liner with thousands on board - nah.

Ha, I take it you've never been to Egypt. 'High-end' isn't the expression that springs to mind!

You're lucky if you escape without a dose of the shits... 

Link to post
Share on other sites

Airlines have never been a good investment - always lost more in bad times as they make in good times.

Business travel is going to be low for the foreseeable future. 20 years ago I had to fly to Paris as the company didnt have an email account. Today, I tend to remote access boxes, one way or another.

Business expos n conferences have been dying for 10 years - business have little spare heads to let out for jollies. Most are so short staffed they really dont want them away. You can see this in the price of getting a company developer (that's not technical support)  onsite to deal with issues. Before, it was priced high to discourage/make money. Now the dayrates are ruinous - the companies have no spare and font wxnt them out the office.

Most UK tourism and catering has always been rank amateur idiots.

Edited by spygirl
Link to post
Share on other sites

There is more liquidity in the system now than before the crisis and that will find its way in the end into real assets.In a low inflation,what i like to call dis-inflation cycle that would be houses and property type companies due to low debt service costs and growing incomes of consumers.During an inflation,or actually really a reflation situation money flows into areas that can front run inflation,that is as far back along the chain,or simple,but dominant areas with good price elasticity.

There will be some growth areas i suspect ,Whitbread for instance might do well when things settle down as people look for lower cost weekends away etc and a tough market forces out small B+Bs,hotels etc.

 

 

Link to post
Share on other sites
23 hours ago, Craig said:

Ha, I take it you've never been to Egypt. 'High-end' isn't the expression that springs to mind!

You're lucky if you escape without a dose of the shits... 

I have been, yes, on a posh cruise on the nile, with proper tie and jacket rules at all time. 

You plebs on the shore can do what you want.

Link to post
Share on other sites

Again, all the above sectors tend to be run/operated by wimmin of a certain type.

The smaller scale the more insane woman.

Mam Spy - Oh Mrs DaftBintCantDoMaths is having some problems running her [BnB | Cafe | Sandwich shop] Could you have a look at her books spy

Me: No, shes mental.

Mam Spy: I said you would, so you have to.

fast forward ....

OK, I can see the problem here. You are effectively selling £10 note for £5.

 

 

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Recently Browsing   0 members

    No registered users viewing this page.

×
×
  • Create New...