The second half of 2021 "is going to be a lot better than everybody thinks", the chief executive of the Hilton hotels business said.
The hospitality industry is "still in the eye of the storm" caused by the Covid-19 pandemic, and the next 60-90 days are going to be "very difficult", Christopher Nassetta, president and chief executive of Hilton told the Bloomberg Year Ahead event on Tuesday evening.
"There are parts of the world that had been doing well that are doing less well – Europe, Asia Pacific, even China more recently," Mr Nassetta said.
Despite this, "the light is at the end of the tunnel," he added. "Objectively, you can see the steps in place. We have a political cycle over with, a new administration, an intense focus on getting us through the crisis in terms of what’s going on with the rollout of vaccines."
Like many companies in the hospitality sector, Hilton has witnessed a significant fall in revenues as movement restrictions to stem the spread of the virus have been put in place in countries around the world.
The company's revenue for the first nine months of 2020 more than halved to $3.4bn, leading it to declare a loss to shareholders of $491m for the period, compared to a profit of $706m in the prior-year period.
Occupancy rates across its hotels stood at 40.4 per cent for the first nine months of 2020. Hilton had 6,333 hotels containing a total of 998,282 rooms in properties it either owned, managed or franchised as of September 30, 2020.
"What I’ve said to our team is the first quarter is going to be really challenging, the second quarter is not going to feel great and we’re going to be transitioning, but I think there’s going to be a real opportunity for the third and fourth quarter, where we get to the other side of the health crisis, to be a lot better than people think."
Mr Nassetta said the recovery is dependent on the rollout of vaccinations going well, with support from the political systems in terms of providing a "bridge" for workers and small businesses, so that "liquidity issues don’t turn into solvency issues".
Hilton will "strongly encourage" its workers to be vaccinated when appropriate, but will not require it, Mr Nassetta said.
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
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Label: Parlophone/Atlantic
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How to join and use Abu Dhabi’s public libraries
• There are six libraries in Abu Dhabi emirate run by the Department of Culture and Tourism, including one in Al Ain and Al Dhafra.
• Libraries are free to visit and visitors can consult books, use online resources and study there. Most are open from 8am to 8pm on weekdays, closed on Fridays and have variable hours on Saturdays, except for Qasr Al Watan which is open from 10am to 8pm every day.
• In order to borrow books, visitors must join the service by providing a passport photograph, Emirates ID and a refundable deposit of Dh400. Members can borrow five books for three weeks, all of which are renewable up to two times online.
• If users do not wish to pay the fee, they can still use the library’s electronic resources for free by simply registering on the website. Once registered, a username and password is provided, allowing remote access.
• For more information visit the library network's website.
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BEETLEJUICE BEETLEJUICE
Starring: Winona Ryder, Michael Keaton, Jenny Ortega
Director: Tim Burton
Rating: 3/5
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The specs
Engine: 3-litre twin-turbo V6
Power: 400hp
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Transmission: 9-speed automatic
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Virat Kohli (captain), Rohit Sharma (vice-captain), Shikhar Dhawan, Ajinkya Rahane, Manish Pandey, Kedar Jadhav, Dinesh Karthik, Mahendra Singh Dhoni (wicketkeeper), Hardik Pandya, Axar Patel, Kuldeep Yadav, Yuzvendra Chahal, Jasprit Bumrah, Bhuvneshwar Kumar, Shardul Thakur
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Kane Williamson (captain), Martin Guptill, Colin Munro, Ross Taylor, Tom Latham (wicketkeeper), Henry Nicholls, Ish Sodhi, George Worker, Glenn Phillips, Matt Henry, Colin de Grandhomme, Mitchell Santner, Tim Southee, Adam Milne, Trent Boult
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Napoleon
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Power: 420kW
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