Chief executives of global companies in six industry sectors offer their assessments of the business environment they expect to be facing next year. The interviews were conducted by Editor in Chief Arnie Weissmann.
I think that we’re seeing some pretty negative trends at present. From a world economic point of view, I think it’s going to be a weaker year than 2015. The China domestic market is not growing. Markets are low for oil, which has hit the Middle East and Russia. You’ve got Brazil, they’re in a collapse similar to the 1930s.
However, the United States is doing well, and of course, we’re strong there. Out of Europe, I think the U.K. will do well. As far as Abercrombie & Kent is concerned, what I’ve done all my life is to spread myself out over seven continents. One thing that will enhance our position is that our major market is the USA, where the dollar is strong. We operate mainly in emerging markets, which have lowering currencies, so this is a strong driver for us.
We’re very well cushioned against [economic fluctuations] because our clientele, for the most part, are over 55 and have a very, very high net worth. So they’re not particularly worried about what is going on, whether or not there’s a collapse anywhere. Our forward bookings are right on budget, and we have planned for an increase over last year. We’ve got a lot of new products, too: flying expeditions. We launched the first, to Palau. It’s only been out about a month, and we only have three cabins left.
I think people will not be rushing to do-it-yourself vacations so much [because of recent terrorism events]. I think they’ll go to well-known tour operators. It will probably lead to the luxury tour sector outperforming other sectors.
We’re taking our private [Boeing] 757 to Cuba and South America, the first private jet tour to Cuba. And then going on to Colombia, Peru, Easter Island, Chile, Argentina and Brazil. So I think we’re actually looking at a very good year, despite what I just said about weaknesses in some economies.
[As far as new destinations], we’ve seen a huge increase in Sri Lanka. More from European markets. I think India will continue to grow. I just got back from Hyderabad, and what a time we had. We had 50 Americans there, and we had two entertainers from Bollywood come in and do a show. We had fireworks. I had forgotten that the Nizam of Hyderabad was the richest man in the world at one stage, and his palaces make Buckingham Palace look quite small. I know India’s not new, but I see it becoming more popular.
[Following the terrorism in Paris], I think what will happen, inevitably — we’ve seen it before — right afterwards, there’s a dreadful shock and rightly so. Unfortunately, these are not unique events anymore. This can happen anywhere. It happened in Paris. In the United States. I think in some ways it will help Abercrombie & Kent because we have boots on the ground. Everywhere we go we have our own operating company. We spend an inordinate amount of time, and have for 53 years, to make sure our clients are safe. And so I think people will not be rushing to do-it-yourself vacations so much. I think they’ll go to well-known tour operators, ourselves and other great brands. It will probably lead to the luxury tour sector outperforming other sectors, actually. Our clients have a better understanding of the world and will continue to travel.
Ultimately, tourism creates sustainability. I know this is a hackneyed phrase, but we cannot let terrorism win. The people of Paris showed amazing stamina. They would not let [ISIS] disrupt their lives. And by the way, I’m probably going to Paris next week. I couldn’t care less.