Pandox AB (publ) (PNDXB) Earnings Call Transcript & Summary

Good afternoon, everyone, and let me add my welcome to you to Pandox's Hotel Market Day 2024. Now if there are some spaces in the middle of the rows, we are a packed house, so do squeeze in. For those of you who, like me, are returning to the event this year, it's great to see you again, and hello to all the new faces in the room and those following our webcast. I'm Victoria Hills. I've been Pandox's English Legal Advisor since 2017, and I'm delighted to be your host this afternoon. A lot has happened since we met here last year. We are in the biggest election year in history. 3.7 billion people in over 70 countries are making choices that will shape the future of our world. We are continuing to experience change at an incredible pace. So in an evolution of last year's event, which focused on what changes may emerge in the world, this year, as you can see, we will start by exploring what changes we will see unfold at a global level and what they are meaning for us here in Europe. After some gentle refreshment, we'll consider how these changes are going to affect the European hospitality market and what opportunities exist for all of us to grasp the opportunities of the future. Now it wouldn't be a Pandox event without a sprinkling of humor, so expect some lighthearted interludes, along the way, which we hope you will enjoy. We have some incredible speakers today. We really want this event to be interactive and for you to feel part of it. You will have seen the QR code around as you came in, and it will appear at various points throughout the day. Please scan it and use it to share your thoughts with us or to raise a question for one of our speakers. You may recall that we actually got you involved before you got here today. We asked you how you felt about the European hotel market. Is it in a good place right now? See what you said. I may as well go home now. There is nothing left to do. Great to see. Well, to kick us off and share his view on the European hospitality market, please allow me to introduce the Chairman of Pandox.

Dear friends of Pandox. As Chairman of Pandox, it is my privilege to wish you welcome to this year's Hotel Market Day. I should have done it in person, but I am now in the middle of the Atlantic Ocean, dead or alive. So what you see is a prerecording from our Ekebergparken Park in Oslo. As to the Hotel Market Day, it will feature impressive speakers that will augment our understanding of the world and the hotel market. I think I can promise you some real fruitful hours. My special contribution is to sum up how things are going to look 1 year from now. Will the hotel market be so bright, I need to wear shades? Or will it be so dark, I need to take them off? And the answer for 2025 is... [Presentation]

Thank you, Christian. Always an interesting take on where we are. Now the last 12 months have not only been full of change at a global level, things have also been incredibly busy for Pandox, including right up to very late last night. And who better to tell us all about that than their Chief Executive.

Please welcome CEO of Pandox, Liia Nou.

Hi, everyone, and welcome to the Pandox Hotel Market Day 2024, and it is the 29th in order since 1996. And it's a great privilege to see you all here, to learn about new things around the world and also about our industry. And of course, for me, it's a super opportunity to be able to talk about my favorite company, Pandox. Our base is Europe. It's the world's largest tourism and hotel market. It's a pretty good place to be. We have freedom of movement, high disposable income and a world-class infrastructure of travel. Did you know that 90% of the demand in Europe is intra-European? And also that more than 85% of the demand comes from travel by car or train. We are a listed pure-play hotel property owner. We only do hotels. But within hotels, we are highly diversified. We have a unique portfolio of high-yielding assets. In total, we have 160 hotels as of end of September, not counting for the one in Edinburgh, we bought October 1. As of a market value of NOK 74 billion, and out of these 160 hotels, we own and lease out 138, and we run 22 ourselves. So the split in market value being 80-20. We are diversified by country, by destination and also by type of demand. So we are in 11 countries, in more than 90 destinations, cities, and 85% of our driver demand is from domestic and regional, which is the backbone of the hotel market. This one you've seen before. We also have one of the strongest networks in the hotel industry, operators, managers, external brands and their own brands. And this is a fantastic value in many ways, and many of you are here today. We have, from the start, been an active owner with deep hotel expertise, and we move along the whole value chain. So we understand both hotel business and hotel property business, and thereby able to create value. Our core is property management, means we acquire, we improve, and lease out our properties under revenue-based leases. But we also invest and develop our existing portfolio to create further cash flow and value and as well as we optimize future growth by selling and buying the right assets. We just love the turnover-based lease, the best innovation ever. It provides upside and aligns the incentives between us and the hotel operator, and it's a true win-win. For us, it also provides inflation and interest rate-protected revenue streams, as inflation and interest rates are closely linked to economic activity. The average yield on our portfolio is 6.3%. Our average interest on debt is 4.1%, securing a plus 200 basis points positive yield gap, which is relatively independent of interest rate environment. With a strong position and big toolbox, and with that, I mean our people, our network and our own operations, we see plenty of opportunities for growth and value creation. It is important to maximize the value of each property, creating attractive products based on the uniqueness of each asset. We do that in our leases, but also by transformation -- transforming our properties through our own operations. And additional to that, an important value driver is to have maximum optionality. That means, having opportunities to create even further growth and value in the future. And the magic word, continuous value growth. Let me give you some examples of -- recent examples of our value growth, which many of you are more than familiar with. Major investment and transformation of our hotel in Nuremberg. We acquired it in 2019, a fixed remaining 2-year lease. We had it closed and renovated for 2 years, and then it was being leased out to Scandic in spring this year. Another example, the large renovation and repositioning of our hotel in Glasgow, now finalized in 2024. Our Hotel Mayfair in Copenhagen, a lease we took back in 2020, at the beginning of COVID, undergoing renovation and will be finalized in 2025 as a new lease with Strawberry for the new Hobo concept or for the Hobo brand. And Stockholm, the acquisition we made in the beginning of 2023, closed and renovated each month this year, and now October 8 opened up with a new lease for the Scandic Go concept. And Citybox Brussels, an acquisition from NH in the end of '22, being closed for major renovation since April '23 and opened up its door this summer with our tenant, Citybox. And of course, are still our biggest ongoing project, the addition of 150 new rooms to our already existing 350 hotel -- room hotel in Brussels to be finalized in '26. And on we go and on we go. Another important aspect of growth and value creation is acquiring hotels with attractive yields and great value potential. And even though we haven't been as active as we were pre-COVID, we have still acquired quite a few, and the activity is increasing. In 2021, we bought 1 hotel, an existing lease for our first Aparthotel, Adagio, in Edinburgh. In 2022, we bought 2 hotels: the former NH Brussels Louise, closed for full renovation, opened up in July; and also DoubleTree by Hilton Bath. In 2023, 3 hotels: Queens - Leeds, 232 rooms; [ Magnificent ] hotel; further on, the property and operations in Stockholm, which now transformed into Scandic Go. And also, in 2023, Hilton Belfast, great city, great hotel. I am sure you get it by now. In 2024, 4 hotels. Great. You're getting it. A portfolio of 3 super exciting Aparthotels: the Residence Inn by Marriott in Central London. Aparthotels, larger room configuration, super high occupancy, limited service, limited banning, high profitability, real money machines, we love those. 350 rooms in Kensington. We have 87 rooms by Tower Bridge and 101 rooms, London Bridge. And the fourth, in 2024, announced in Q3, finalized October 1, DoubleTree by Hilton, Edinburgh. Again, super exciting city, magnificent building, performing plus 7% initial yield, with a further potential in further product enhancement. So 1 hotel in 2021, 2 hotels in 2022, 3 hotels in 2023, 4 hotels in 2024. Starting to become a pattern, so it's actually time to break that pattern. So breaking news. Today, we actually announced that we are acquiring Radisson Blu Tromso. And even though it's actually will be finalized Jan 1, so it's -- maybe not really. I'll have to account 5 for next year at least. Tromso is one of the strongest hotel markets in the Nordic region. It's in the north of Norway, with a high international demand. Radisson Blu, 269 rooms, 13 conference rooms, biggest one, taking a capacity of 650 people. Turnover-based lease with Radisson, good demand from both leisure, business and meetings, and a strong initial yield and a planned joint investment, taking it to a yield of approximately 8%. And on we go. So the people of Pandox, who are we? Well, for those who have been in our offices in Stockholm, this is some of our 4-legged employees. And actually, there are quite a few more. We have Knut, we have Sally, Stella, the girls, we have [ Cesar ], we have Dexter, my favorite, and we have [ Blum ] again, much more. And these people represent the mood of the office pretty well. We are, by nature, optimistic. We are energetic. We are fearless. We are cuddly, handsome and opportunistic. And if we tumble that all together and put it all together and then we ask AI, what do we look like? This is what we look like. The balanced optimistic kind, pretty cute. So we have a positive view on the hotel market, with stable demand in Q4 and with RevPAR growth expected in 2025, add to that our investment of repositionings and our great acquisitions. All economic activity drives hotel demand. The big unknown, which we'll talk about, is geoeconomics. And hopefully, today, we will gain some more insights to how global change, geopolitics and geoeconomics will affect hotels. So I hope you enjoy our fantastic speakers, I certainly will. Thank you, all.

I definitely want that dog. Thank you very much, Liia. Clearly, never a dull moment for Pandox, and I look forward to seeing you later to reflect on our day today. And welcome, Erik. You're part of Pandox's Investor Relations and Communications team. Thank you for being here in our lobby. Tell us what will you be doing today?

Yes. It's a true pleasure to be here on stage with you today, Vicki. So my role today basically is to be the link between you, our brilliant audience, and our top-class speakers on stage. You should all have seen the QR code perhaps somewhere around. Otherwise, it's on the screen right now. And by scanning the QR code, you will be able to take part in our polls that we will put out throughout the day, and your participation will be highly appreciated in those. And this is also an opportunity for you to ask questions to our speakers today. So please take the chance to ask questions, the more the better, and no question is too small.

Fantastic. Absolutely not. Please keep asking. Thank you, Erik. So last year, 2 of our speakers asked last year's audience, "Which of 3 scenarios or options for a new world order was most likely to come to pass?" They described each of those scenarios as follows. First, they said, "My country first." In there, there was a continuation of what has been the status quo for all of our lives, nation states collaborating, where it's in their national interest, but otherwise supporting themselves. Second, we had, "we first", a reduction in globalization and a rise of regional alliances, the West, the global South, China and its allies. The norm being that people would live, work, travel and trade within those regions rather than between them. The third option was "planet first", where the climate crisis would force global collaboration to reshape and reindustrialize our world in a way that protects the planet. The results last year were very evenly spread, as we can see. But what do people think this year? Let's see a quick show of hands. Who thinks status quo retains my country first? No one really likes that. What about, we first, the rise of the region? Definitely more popular. And where are the environmentalists who thinks the planet wins? Oh dear, that's a bit of a tricky situation. Thank you. Well, I'm delighted to say those same 2 speakers are returning this year for part 2, the sequel, to share how they think the world order has moved on. Their insights are always profound, intriguing and great fun. Remember to use the QR code if you have any questions for them, and please enjoy.

Please welcome, Author, Economist and Adviser, Kjell Nordstrom; and Strategist, Author and Entrepreneur, Per Schlingmann.

Indeed, here we are again. Yes. And this year, we are going to do a little bit of time travel rather than scenario watching. Now in order to do that, we have to go way back and ask ourselves, this is today in a way, but who are we? Who are we? Why are we so successful in some senses? One sense being that we are almost 10 billion people soon. That's a success, you could say. The other apes, I mean, our fellow apes are not all that many, as you probably know, what's the thing with us? For those of you that have a sociological background, you know that to the best of our knowledge today, there is one thing that this ape can do that the other apes cannot as far as we know today. We can build networks of anonymous apes that together do something and move in the same direction. Ask any catholic. They've been working together, anonymous. They are in relation to each other. They don't know each other. They are still able to form a network and do something great together. How do you hold the networks together? And now we come closer to today. You hold it together with a leader. No. With a story. Networks are held together with a story, a saga. And mind you, ladies and gentlemen, that saga, that story does not necessarily have to be true. Ask your Catholic friends about the scientific support for what they are doing, and they will have some problems, as you see probably know.

Maybe we can ask Trump?

We could ask Trump, and that brings us to the United States, that you've been watching closely.

Yes. We now have an election result like 2 weeks ago. And I think it surprised a lot of us. And what we can say is, first, about the election result, is there's something to learn? I would say it's actually 2 things that I think everybody can learn from. The first is that being close to your audience, being close to the voter, to the consumer, to the guest, and I think that is something a really important point of this election. And the other thing I'd say is the importance of narratives. It's very, very strong. I think that make America great again was a narrative that you used from the beginning to the end. If that is the narrative, we all listen to, I think the narrative of being evoke is the other way around. We will see very little evoke in the future. I think another thing that is important and interesting is that we now have a President-elect, but you can also say we have a President Inc. He will be the first democratic leader who will run a company -- a country as a company. Maybe Trump will be a more traditional leader, but then we have the start-up guys, Vivek, Elon Musk, et cetera. But I think, of course, the most important question is, what will the U.S. election mean for the world? And I think it's 3 things. We will go through that. And I think a lot of speakers. And first, of course, we have a new geopolitical world order. I think from a European point of view, we have to play more of a home game. We have to do more things here for our security and a lot of other reasons. The second thing is, I would say, we are now entering a world with more trade barriers, and that is something that's very clear. Maybe this is good news for us Europeans. Because we have always complained that we are 27 countries, with legal structures and everything. That means that the European companies were quite good actually in handling this. And that was what we also have heard from a lot of companies. They're quite positive. And I think the third thing we will see is the relation between U.S. and China would be much more important. We will have a competitive war on AI, electrification, chip. So I think this is what we see. But if we take this vibrating, very formative time, if we put that in a more historical context, what do we see?

Yes, let's do that. Let's go back again. Time traveling a little bit back and forth. We have a long history, you know that, and you remember that from your history books. Some people say it's 70,000, some people say it's 200,000. It doesn't really matter for what I'm going to argue today. Our history might be long, 70,000 or 100,000 years. But our economic history is not very long. It's about 250 years, no more than that. You remember that, too. Jenny started it all in the U.K., spinning jenny with industrialization. Before that, no economic activity that you and I would recognize. We stole things. We went to war. We went to South America with ships. You remember, Columbus and the other guys, yes. But if you call your tax authorities, they will tell you that if you steal things you don't have to pay tax because it's not a usual transaction. It's not economic activity, the usual way. 250 years, that's it. All the wealth, all the hotels, all the airports, everything we are surrounded by, it's basically 250 years, the rest you can forget. And why I say this is because there are some links to where we're going. Aren't there, Per?

Yes, sure. And if we take this 250 years, it could be a quite long period. But if you look at the 40 years, maybe from the '17 and onwards, that has been like amazing. The world opened up. Asia opened up. Over 3 billion people went from like poverty to some sort of middle-class. And we talked about globalization, urbanization, digitization, we deregulated everything. And if we were standing here like 5, 8 years ago, we will talk about eternal growth, eternal piece. I was in politics at that time. The piece was eternal, everything was perfect. Money had no price. So that feeling, you remember that?

Yes, I remember it, 40 years, 4 decades, basically your life.

But what happened?

What happened? Well, some people say it was 2016, Brexit, 65 million people leaving the union. All of a sudden -- well, all of a sudden, depends how you see it, but they left anyway. You ask someone else and it says, "No, no, Brexit, not so important." 2019, Wuhan -- but later came to us. No, someone says, that's not so important. You have to think 2022, February, that morning when the tanks crossed the border into Ukraine, full-scale war in Europe. No. ChatGP3, you said 4. Spring 2024. Whole planet was like, "Wow, a machine that can do human stuff." And here we are after the election in the U.S., with someone rocking the boat from the White House, crisis after crisis after crisis, 40 years of growth, 40 years of openness, 40 years of optimism, all the things that Per was talking about, and now 8 years of consecutive crisis upon crisis upon crisis. What's next? Well, you talked about hotels, but how can you -- can you see the future? You, of course, can't see the future. But what you can do is that you can do certain tricks. You can put things in a historical context, which you always can do, but then there's one more thing you can do. You can look at extreme environments. Scientists has always done that in the area of medicine. In the area of the humanistic. We study the extreme to get a feeling for what will happen to the average, and that's exactly what we are going to do with you the rest of these precious minutes together. We're going to do a little bit of witching, in the sense that we look at some extreme environments and draw some conclusions on where are we going from now. And Per, you said it in the beginning...

Yes. Let's go into the witch mode, so to speak. And last year, when we here, we talked about what we call momentum. And since then, a lot of things has happened. So what we actually see now is like we have one planet, but we see 7 momentum, 7 forces. And we also know that every force, every momentum, every change also means business opportunities. So this is an environment for new business. And just ask like Elon Musk. He's sitting on the knee of the grandmaster of change and chaos, and he's doing a lot of business, isn't he?

Yes, he is. But let's start with the geopolitical level. The one that Vicki was referring to, that we voted on last year, think of the world for a moment as a Polaroid photo, the old school version. We take that pic, and then you sit and look at it and you can see, "Yes, yes, yes, you are there and there you are." It takes 6, 7, 8 minutes. And in a way, the planet, our planet is in such a state now that it is like a Polaroid photo and that you gradually can see that you can discern what this will be. You can see China moving in its own direction. You can see it clearly now. We couldn't see that last year when we met. You can see Russia sealing itself off to the rest of the world. We, to them, moving in their own direction. Of course, you can. You can see 5, you can see 6, you can see 7, maybe 8, small empires now being formed out there in the world, building the walls. Again. For the Nth time in human history, this ape now build walls again, the Fins to the Russians, the Americans to Mexico, and the walls around Europe to block out Chinese electric cars, we're building them again. And remember that night, that morning when the tanks went across the border into Ukraine, the world order fell to pieces. 70 years of a world order fell to pieces. We know that today. We didn't know that, that morning, and Putin has said it. "I not only want Ukraine, I want another world order." And he's been very firm on that. There will be another world order. There was a world order. You and I are unfortunately in between. That's where we are today.

Yes. And one part of this world order, you mentioned this 250 years. It was 250 years of growth, but it's also 250 years of climate change. And I think what you can say is that the train has left the building. And that means for some of us, it will be a competitive platform if you make green steel or whatever. But I think it's something very important for most of us, climate change will not be a competitive platform. It's necessary, but not sufficient. And I also think -- and we have talked about that last year, that what we see now is actually maybe an era of 20, 30 years of growth and transformation, maybe the biggest transformation of industry ever been made. And I don't think Trump can stop that. Some problems in green investment cannot stop this. So it's something really. We have one generation to fix it, and that would lead to growth. And what we can say is simultaneously with this climate change, we also see something else happening. And that is how our communication landscape is shifting. And we're actually moving into a landscape of mass conversation. Just a little bit of history here. I think all of us here -- in here, we are grown up in the era of mass communication, where one center company could reach a lot of people, and budget was important. But what we see now is that we all have conversations with each other, with the cell phone wherever we are. And this has some real dramatic consequences. That's why stories, narratives are so important. And let's take a narrative, take the narrative of over tourism. That's something that is happening, but it's also narrative, and the narrative has powers. We know that it affects consumer behavior on places, on hotels, on everything, that affect us today. And it's also the burst of influencers. I don't know if you watch boxing or UFA -- UFS -- UFC or MMA, maybe you here, I'm not a supporter, but Jake Paul, he was an influencer. So we see it all over the place, how the communication landscape is shifting, and everything is story-driven, leadership is story-driven, consumer behavior is story-driven, politics is story-driven. And one story, one narrative is about demography. Maybe it's not only a narrative, maybe it's a reality. What do you say?

It's pretty brutal, I would say. We are next to [indiscernible], the organization for the Swedish municipalities, no babies in Sweden. 1.48 baby was the number in May this year, which is the lowest number ever since we started to measure the number of babies per woman in Sweden. We thought we were immune. We thought that the Nordic welfare model delivered on high birth rates just 10 years ago when we sat here in another group on another occasion, saying 2.3, 2.4, increasing in the cities because we live in the cities and we move to the cities, 1.48 and falling. We will have to close schools. We will have to close day care centers, and they are working on that in the building next to us here. And we checked the day before yesterday, the figures look roughly the same in the rest of the Nordic countries. So now the phenomenon that started in the South of Europe has a rolled across Europe up and then clear up to us here in the North. Denmark, Norway, Sweden, Finland and Iceland, significant impact. The world has some kind of PIN code. This is a way just to memorize. The PIN code of the world used to be 1, 1, 1, 4. 1 billion people in the Americas, 1 billion people in Europe, 1 billion people in Africa and the rest in Asia, easy to remember. But now we are in transition to this. 1, 1, 2, 5. 1 billion people still in the Americas, 1 billion people here in this grand market of Europe, fantastic as it is, 2 in Africa and 5 in Asia. And this is probably the PIN code that you and I will live with for the foreseeable future, but take into account the situation in the Nordics whenever you plan for this area.

So you mentioned this more global PIN code. There is also a local PIN code. The authority for statistics in Sweden has just launched new numbers, from the development, the demography in Sweden from 2023 to 2033, 10 years. And that creates a new local PIN code that I would say is quite dramatic. We have some numbers. This is the first one. Minus 8 -- it should be 8.9 actually, something has happened. This is the amount of people from newborn to 19, the young people, the coming 10 years. So we've had 9% less young people. Next number, 2.7. That amount of people in the work age, 20 to 64 years. And then you have the number, 65 to 79. They are in the same area, like it's 3.7. But then we had the real dramatic shift. People plus 80 years is plus 38%.

So some daycare centers and opening...

That's just the beginning. And we all knew what this means. Fewer younger people has to support more elderly people. We have seen that a lot of time. This is a Swedish phenomenon, Nordic phenomena, a European phenomenon. But coming into machines, it's interesting because we have a lot of discussion about AI, automization and everything. And often, we have a quite negative discussion on machines. They are taking jobs from people. We are quite scared. But I think looking into the numbers of the local PIN code, the question should be, "Will machines, fast enough, replace human work?" I think that's the right question. And maybe there's another dimension coming to technology. And I don't know if you remember, Nicholas Negroponte, he was the Head of MIT Media Lab. He said one thing. He said that everything...

For 30 years.

30 years. Yes, yes, he's been -- he said that everything that can be digitized will be. And here we are. But maybe we have to add one thing, and that is everything that's digitized will be humanized. And that's what we see right now, how our relation with technology changes, how technology becomes more humanized. And I think like ChatGPT, it speaks human. The vacuum cleaner robots, I don't know if you have any, we give them human names. And we have robots in elderly care. They take human jobs. So all we see technology and demography. That's 2 key areas for the future.

Speed it up by the fact that chip technology and fundamental science drives us into new business models and allows us to do something that has been only a dream for entrepreneurs and only a dream for theory efficient, namely to be able to charge exactly for what the client and the customer use. Now you can do it. With the help of sensors and microchip, you can basically stream money. Ask any airline company today, they don't own the engines on the jet airliners, Rolls-Royce own the engines, and then there is a stream of payment depending on how you fly that plane. You fly hard, you pay. You fly soft, you pay less. You can do it with eyewear. You can do it with cars. You can do it -- we already do it in a number of industries. What we see is probably a transformation, a fundamental transformation of the smallest unit of analysis in capitalism called the transaction. The transaction is changing shape and form right under our noses. And we move from what is called stock, one big thing, to flow, a continuous stream of payments. And basically, that means new business models. We will come back to that in a moment.

Yes. And another thing that we also talked about a year ago and when asked what will be a part of the new world order, I think coming to work, even though we see now a battle on the narrative, will the work be flexible or not? We can say that flexibility, especially in how we work, we have discussed a lot of where we're going to work as a consequence of the pandemic, but of course, working more remotely is a naturally integrated part of how we are working. So I think that could be check in that box actually. But it's maybe more important what this means for how we run business.

Because business -- the fundamentals of the business is trivial in a sense. If we're going to earn money, we had to make money. The question is the vehicle, the tool, the entity that we use for making the money, it's still about creating temporary monopolies, competitive advantages, a moment in time when you're perceived to do something unique. But let's try to see the firm again over time. And then you can probably see something. You can see and I can see and we can see when you look at this time line because we all come from this. This is before 1926. Everything that we human beings did together in these networks that we talked about earlier, the Army, church, companies were hierarchically organized, like this. It's called a functional organization. And everybody that has a background in organizational theory knows this. This is the result of the last Elon Musk, Henry Ford. This is an invention from 1926, when we understood that you can build small functional organizations within a big functional organization, we call it divisions. McKinsey, Boston Consulting Group, Bain & Company has traveled the world for 70 years and sold that model to us, Europeans...

Yes, their actual business idea.

That's the business idea that, "Oh, I see, you have 1, you should have 3 of them or 4 or 5." Fantastic. Extremely powerful innovation. Now we are taking the next step in the '60s, NASA put a man on the moon, the matrix organization, you take one functional organization, overlay it on the other one. Every person has 2 bosses, extremely powerful for multinational, international complex organizations. We are here now. We are here now. And this is your job to hold this thing Liia together. And the rest of you, this is what it looks like. You know that and I know that it should come as no great surprise that some researchers now say, it's what not, what the firms do anymore, it's how they do it, how they are able to fix this. And here, stories, sagas is probably the only way...

It's the only way to run this.

You can't hold it together in any other way.

You can have a lot of dotted lines. I love dotted lines.

I know you do.

In organizational charts. But the only thing that can make this is actually to have a story and an aspiration forward. Social, let's sum up a little bit. We've had 7 momentums in rapid speed, you can say. We talked about last time, we are active, worried, optimists.

Whenever I say that to someone they go like, "Why? What are you optimistic about?" Well, worried they understand that we are, that I am. But the optimistic component goes like, "What? Why?" Well, didn't you hear what we were saying earlier today, there is a fog of war in Europe. Of course, there's still some virus in the air, a fog of virus. There's a lot of fog that makes it difficult to see. The super cycle that probably is ahead of us. The super cycle that probably will do the same thing for us here as the last one did for us 20, 25 years ago. When the U.S. grew 8% a year during the Clinton years, can you remember, driven by globalization and information technology. We know that today, it was a super cycle. Our super cycle, smart machines, call them whatever you want, AI or smart machines, plus the need to rebuild the global industrial base in less than 30 years will drive a lot of growth. Can't see it now, there is a fog in the air, but a possible super cycle.

Yes. And I think there is actually another reason to be optimistic. And in contrary to the general discussion, I think it's actually Europe. And of course, we know that growth is too low, competitiveness too weak. We have an aging population, but we also know one thing more, and that is when we come under pressure, we human being, we act. And I think whatever we think about the new U.S. President, we will see high growth in the U.S. in the coming years. We know that China will not be on the lazy side, India neither, and this leaves us with no choice. Europe must improve competitiveness. So next time we stand here, we maybe not only talk about MAGA, Make America Great Again. Maybe we'll also talk about MEGA, Make Europe Great Again. Why? Because we have to. Thank you very much.

Thank you.

Per, Kjell, you've done it again. Thank you for such a powerful and energetic session. I can only imagine what it must be like in your minds. I'm sure that must -- that's a whole debate for another day. I'm sure that must have spurred some questions from you. So Erik, are there some questions?

Yes, we're off to a really good start.

Rolling in?

Yes, absolutely. So the questions are flowing in. So here's one. How can we tear down the economic walls that you mentioned? What needs to happen to build bridges to avoid isolation?

Okay. There's 1 thing. Put it like this. 50% of world trade, flat, is international companies and multinational companies. So 50% world trade, think a 1,000 organizations, and you are roughly right, account directly and indirectly for 50% of all trade in the world. It's the Siemens, the ICIs, the Volvos of the world. These companies were, listen to this, created to handle a world full of walls. That's why multinational companies exist in the first place. Otherwise, you don't need them, ladies and gentlemen. They exist because there were walls. That's why Scania makes trucks in Brazil. It's not because they like the rainforest or something. It's because they had to set up manufacturing in Brazil in order to sell something in Brazil. Multinational companies are made for this world and can serve this world. And European multinationals have a history of serving walls like this. It's usually business that break through the walls. That was the long answer to the brief question.

And Do we have time for 1 more question? I think we do.

See if we got one here. So what signals are we picking up from India? Should we expect them to take a stance or continue to be opportunistic?

Yes, I think we see a lot of interesting pattern shifting now that companies are leaving China moving to like Bangladesh, Vietnam and also India. And I think that India is making real stance. I think we had a discussion, I think, last year about where will India go. Will they like be -- we talked about the [ oligons ]. And I think from our point of view, it's quite clear that they are going quite strong on their own. And I think maybe the scenario is that China is moving more with like U.S. tariffs towards a low-cost company, again, a low-cost country again, and that actually India can be boosting from that. So I think that India is extremely important for us to see, and they have great opportunity to think as well, especially if they are more open-minded towards trade.

A quick one to keep an eye on. 50% -- is all that 50%, 50% of the growth in a country is usually babies, demography. It's 50% is increased number of people in the market. China has a falling population. India has an increasing population still, and will have for the next 3, 4, 5 decades, which means that we see a major shift in terms of where the growth power is driven by, yes, the babies, which is usually half.

Yes. But also if you take a trade war between U.S. and China, it opens up enormously opportunities for India. And Europe because if you talk like protectionism, Europe, we have a lot to do in Europe in terms of the inner market. So we can do a lot of things ourselves.

Thank you very much.

Thank you.

I know you're coming back later. So if there are more questions, please send them in to Erik, we'll make sure you get to answer them. But for now, everyone, Kjell Nordstrom, Per Schlingmann. We're now going to look at how some of those geopolitical and macro forces are impacting European business leaders. Our next speaker is an expert on EU trade, economics and business regulation. A dedicated public servant, he has served the U.K., both in Brussels and at Westminster. Sadly for him, he saw the inside of some of the Brexit negotiations. Let's meet him.

Please welcome Partner and Associate Director of BCG, Tim Figures.

Thank you very much. It's great to be here with you this afternoon. Thanks for that great introduction, Vicky. And I should just say as someone who's hometown is Leeds, how pleased I am to see that the Queens Hotel, which definitely is the best hotel in that great city is in such safe hands these days. So we've heard a lot about the overall forces impacting the business landscape and the great uncertainty that they bring. I spend a lot of time going around Europe talking to business leaders and investors at events like this, really to try to explain in a bit more detail what this geopolitical uncertainty might mean. And the #1 question I usually get is when will this uncertainty end? Can you tell me what is going to happen? And unfortunately, the honest answer to that question is no, I can't, and I don't think anybody can. But that's not very helpful in terms of addressing the challenges that business leaders have to face. So how can we think about geopolitical uncertainty and help business leaders navigate this landscape? Well, you'll be pleased to know I'm not going to sell you a change to the operating model, although some of my BCG colleagues may be interested in doing that. Instead, what I'm going to offer you are 6 forces that I think are shaping Europe's business landscape. Because if we can understand the forces that are driving this uncertainty, then that might help us unpack what might happen and think about the range of future possibilities. And you can see the 6 that we've come up with at BCG here, ranging from the geopolitical tensions and the division of the world into a more multipolar environment. Questions around competitiveness and talent. Uncertain politics, particularly European focus on ESG and trade, the challenges of energy, security and resilience that we're facing in Europe. And finally, the fact that growth in the future according to our trade predictions is going to be concentrated more in emerging markets than in developed markets. But let me start with the one that I think is going to be at the top of many people's agenda. Europe is subject to increasing geopolitical tensions, and these take a number of forms. I'm going to talk about the U.S. presidential election a little bit later. But of course, we are seeing just in the last few days, in part as a consequence of that election result, an uptick in tensions with Russia and in Ukraine as different side seek to gain advantage before the U.S. administration changes. We have a conflict in the Middle East, which has had relatively little impact on oil prices. But diversions of European bound cargo from Southeast Asia via the Cape of Good Hope have added something like 15% to the shipping costs that we're all paying for those types of goods once they get to our market. But I do think one we should really focus on is the development of increasing tensions between the European Union and China. The decision on the 31st of October by the EU, opposed by a number of large member states, including Germany, to impose tariffs on imports of Chinese electric vehicles is a significant step forward and a good example, another brick in the walls that we heard the previous speakers talking about increasingly being built in our continent. Now the European Union, I don't think is likely to take as hawkish a stance as the United States. If you just look at the level of those tariffs, 25% to 35% in the EU, 100% of the equivalent tariffs imposed by the United States a few months ago. But I do think increasing trade tensions with China are likely to be here to stay, and that's a significant force that we need to watch as we go through the next few years. Now you heard from the previous speakers about MEGA as opposed to MAGA. And there's no doubt -- and this is my second key geopolitical force that Europe as a continent is facing significant challenges around competitiveness, talent and demographics. One analysis says, just to take those Swedish numbers that we saw a few minutes ago, if you look at it at the EU level, by 2040, the EU workforce is likely to be shrinking by around 2 million people a year. That's a very, very significant reduction. Demographics are aging, particularly in countries such as Germany. In some parts of Europe, particularly in Southern and Eastern Europe, we're also seeing a talent outflow. There are a fewer young people, and the young people that are in those economies are leaving and going to markets where they see greater opportunity. And as technological change accelerates, we're starting to see an increasing mismatch between the skills demanded by employers and the skills that workers in the labor market have available. And addressing those challenges will be key to ensuring the competitiveness and growth of Europe in the future. But here, I think, are the key points recently developed by the former Governor of the European Central Bank, Mario Draghi, in thinking about, well, what might the MEGA, if we want to call it that, agenda look like. And what I thought was particularly interesting was in his report, he framed Europe's challenges in a geopolitical context. And what he says very clearly, and I agree with him. I think this is a great analysis, is that for 20 to 30 years in Europe, we have relied on 3 geopolitical tailwinds to drive our competitiveness and our growth. Firstly, an open global trading environment. So a trading environment without those walls that we were hearing about a few minutes ago. Secondly, a relatively benign security environment, but we didn't have to worry too much about the security of our neighborhood, and we didn't have to pay that much in defense budgets in order to maintain our security. And then thirdly, access to competitively priced energy, such as gas from Russia, which drove our industrial competitiveness. All those 3 tailwinds have either gone or in the process or are in the process of disappearing. And so it's against that context, Europe has to think long and hard in my view about our future competitiveness. Now you can see there are the 3 key call outs that Mr. Draghi mentioned in his report, that Europe is over-reliant on relatively low growth sectors and under-indexed in high-grade sectors like tech. Secondly, fragmented capital markets make it harder for European companies to get the investment that they need to grow. And then thirdly, the complex regulatory structure of Europe and decision-making processes are holding back innovation and growth. Now he's come up with a number of very bold suggestions. One, the one that got the news was the massive amount of investment required at the European level, both public and private. But I do think it's important also to mention the completion of the EU single market, particularly in areas like energy and telecoms, where it remains highly fragmented, and also improvement in European decision-making processes to deliver the kind of dynamic regulatory environment that we need to grow. And the key geopolitical question, as a new European Commission takes office in Brussels in a few weeks' time, is will it and the European member states be able to deliver on that ambitious agenda. Because the future of Europe's growth and competitiveness is genuinely at stake. Now Vicky mentioned at the start that 2024 has been what some people have called the world's greatest election year with something like half the world's population eligible to vote. And here in Europe, we have had key elections in countries such as Poland, France and the U.K., the European Parliament and slightly surprisingly, I should say, a bonus election now coming in Germany in February next year. Now if you look at the outcomes of all of those elections from a right/left wing perspective, you don't actually get any particularly clear outcome. Some countries have moved more to the right, others have moved more to the center. But maybe the thing that combines all of those things together is a desire amongst voters to push back or protest against incumbent governments. Voters, whether it's in Europe, the United States or elsewhere, are very dissatisfied principally about the economy and the lack of growth, which is why Mario Draghi's prescriptions, I think, are so important, and they tend to punish incumbent government. Now I guess the final main election in that great election year was just over 2 weeks ago in the United States. Now I'm sure a lot has been said and will continue to be said about that election and its outcome. What I'd just like to focus on for the moment is what I think the prospect of the second Trump administration means for the European Union and for Europe more broadly. And I think there are 3 key areas to look out for. Firstly, on foreign and security policy. The next U.S. administration has said that it wants to bring a swift end to the war in Ukraine, but also to focus more on how European members of NATO pay for and contribute towards our own defense. And I think that will be a significant issue with ongoing consequences for how we conduct defense in Europe, how we pay for it, what levels of taxes are needed in order to pay for it, which will become clear very early on in 2025. Secondly, we've already heard a bit about the prospect of increased trade tensions. The next U.S. administration will use tariffs much more extensively than the current one, and it previously did. What we can expect from what they've said it potentially is tariffs of somewhere between 10% and 20% on most goods being imported into the United States, maybe up to 60% in terms of tariffs on imports from China. And what that would do is further erect the kinds of walls that we were talking about. That will have significant consequences on the configuration of global trade and supply chains. And the European Union, as we know, is preparing if that happens in order to retaliate against the United States. So as we head into the prospect of significantly increased trade tensions, thinking about what that means, what they might mean, sector by sector, but also in terms of the broader macroeconomic outlook will, I think, be very important. The third area to focus on will be around climate. Now again, the next U.S. administration has suggested it would withdraw from the Paris Agreement like it did last time around. If that happens, then that leaves the European Union as the remaining major global economy committed to net zero by 2050 and regulating in order to achieve that. I'd expect in that scenario, the calls from European industry to think about and maintain and recover what it perceives as lost competitiveness will grow. And the next European Commission and member state governments will need to think about the balance on the one hand of regulations and penalties, and on the other hand, of incentives that are necessary in order to maintain a balanced approach to achieving the energy transition. Three other forces, just very quickly, I'd like to share with you. Now the European Union, particularly over the last 5-year mandate, has been very much focused on this concept that it calls values-based trade. And here, the EU has been really globally at the forefront of linking access to the EU single market to a requirement to maintain high ESG standards throughout global supply chains. Three key pieces of legislation agreed and coming into force over the next few years that will really drive that trend: the carbon border adjustment mechanism, the world's first carbon-based import tariff, levying carbon-based charges on imports of energy-intensive goods like steel, aluminum and cement into the European Union. The EU deforestation regulation delayed for a year, but coming into force, impacting supply chains in sectors like soybeans, agrifoods, wood and so forth. And the Corporate Sustainability Due Diligence Directive, or CS3D, which will require larger European companies to conduct and maintain ESG supply chain due diligence. The war in Ukraine has focused European efforts on improving energy security and resilience. And actually, the EU has been good at finding alternative sources of energy to replace gas and oil coming from Russia. However, those changes in our energy flows have created new dependencies on countries like Norway, the United States and some Middle Eastern countries. And of course, as we move more to new technologies such as electric cars, which can help improve energy security, the European Union needs to take care to avoid simply swapping reliance on hydrocarbons to single sources of other products like critical minerals. And it's really important to see how diversification efforts, how successful diversification efforts, particularly away from markets like China, are during the next period. And it's worth remembering that despite those significant improvements, European industrial gas prices are still something like 4x to 5x higher than those paid by U.S. companies. And finally, if we look where growth is going to be in the world, certainly in terms of our BCG projections, it looks like emerging markets -- and I was very interested to hear the question about India a moment ago -- are likely to be key areas of opportunity. Every year, we project what we think future trade growth will be out for 10 years. And here are our latest projections. We're just about to redo these, by the way, but these are our latest available projections for how we think European trade is likely to grow in 2032 compared to 2022. And apart from that big green arrow that you can see with the United States, which is mostly LNG imports by the way, to my previous point. You can see that the big factors of growth are in emerging markets, including China, Africa and indeed, India. So thinking about where opportunity lies, those markets need to be considered. That's why right now, European leaders are debating whether to finalize a long overdue free trade agreement with the MERCOSUR group of South American countries. And if that agreement comes to pass, it remains highly controversial, I don't know whether it will, that would indeed help deepen the EU's trading relationships with the key emerging market. Now before I stop, just to leave you with a few suggestions. When we think about how businesses can respond and prepare, here are 5 things to be thinking about. I won't go through them all in detail. I think the key one is the top one. I started this presentation by saying nobody knows in a world of uncertainty, what is going to happen. The best way to cope with that is to build geopolitical muscle in your corporate decision-making and to prepare for a range of future scenarios so that you aren't caught out by some unexpected twist or an assumption that the future will simply be the same as the past. Whatever happens, if you follow these principles, then I think you'll be well placed to whether what will be a challenging and uncertain future. Thank you very much.

Thank you, Tim. That point about the shrinking talent pool for us in the hotel industry, I think, is really important. Do send any further questions in for Tim, and we will put them to him later. Now you've been sat still for quite a while now. And when I start to look at the heart rate monitor behind Erik, I think you're getting a little too comfortable. Let's see if we can pick things up a bit. I think I have just the thing for you. First, we need some music. That's starting to have the desired effect, but I think we can go higher. For that, we need sugar. Send out the snacks. Please pass it on. Help them all. We're very desperate in the middle here. There's a barren patch out here, very hungry people. Well, please enjoy your very, very special chocolate bar that continues to make its way around. You may notice that on the wrapper, there's a QR code. Don't forget, get scanning, there's a slightly amusing question that you should all answer. Oh my goodness. Look at the monitor behind us. I think we can say, mission accomplished. Thank goodness for the cocoa bean. I think most of you are done with your question answering. So let's see what the result was to our question. How much do you feel this is the best day ever, bearing in mind we've given you chocolate? Well, I think we definitely need to have more in this column. So we will try a bit harder for the remainder of the day. Thanks for taking part. Now you are nicely energized. Let's continue. You're now going to hear from an award-winning financial journalist. He has previously held roles as Head of Research at SEB and is a proud Board member of Grand Hotel Lund. So he beautifully straddles for us, the world of finance and hospitality. Please welcome him to the stage.

Please welcome adviser, analyst and columnist, Henrik Mitelman.

Thank you so much. I love hotels. I love the hospitality business. I know Pandox probably thought that I would be up here on this stage to talk about macroeconomics, business finance, but I would like to talk about hotels. Is that okay? Yes? Okay. Well, I stay in hotels. I calculated last year, I stayed 150 nights in hotels. And we're not traveling for business. I resided in France, obviously, in a hotel. And many people say, but how come? Why do you want to spend your time in a hotel? You could probably buy an apartment, that would be much cheaper. No. Because they don't know about alternative costs. That's the business of economics. I mean, if I would buy an apartment in France in this particular village, I would pay like EUR 1 million for a 2-room apartment. EUR 1 million, 4% interest rate, EUR 40,000 every year, that gets me lots of hotel rooms. And if you stay like 30, 40 nights in a hotel, you tend to be treated very, very well. You leave your bags, you get breakfast for free. You can go to the bar in the evening, you get a drink for free. They treat you very, very well. I love hotels. And it also gets me security, insurance, heating, electricity, Wi-Fi. And contrary to, if you would buy an apartment in France, you don't have to pay 40% inheritance tax if you would die. Most of us do in the end. But I also love hotels from a global mega perspective, global megatrends. I mean, hotels are definitely part of that. And I think we should all be proud of being in this business because we are really doing something for a sustainable way of living. We share things. We share rooms, which have spaces. This is good. This is sustainable. Hotels are definitely part of the sharing economy. You all know that, but I think we should be better in telling and conveying that message to everyone else. Now to the economy. Well, I think most people sort of perceive the European economy is something like this. I do not agree. My name is Henrik Mitelman. I do different things. I work closely with Rhenman & Partners, a healthcare equity fund. We tend to get older, as we've learned today. Good for the healthcare business. I work with Carnegie Private Banking, where I'm also a very happy client. I'm the Board member of Grand Hotel Lund, welcome to Lund. And I work with EFN, an independent media house where I write columns every week, free for everyone to take part of, and run a video pod together with my friend, Gabriel Mellqvist. We've had a number of nice guests over the last couple of months: Anders Borg the Minister of Finance before; Erik Selin, and most importantly, Liia. Thank you so much for being part of this. Now we can talk about economics. We can look at different charts. But as some of you know, I tend to focus mostly on who is playing the leading role of every economy. And as some of you know, it's, of course, the family with a roof box from Thule. I mean if you do have a roof box from Thule, you tend to be more sporty, more active or affluent, higher educated, you're doing well. And if we know -- because I mean, economics is all about behavior. It's all about behavior and about the perception of the future influencing our acting today. The Thule family was quite depressed a year ago. The Thule family were worried, we will see higher interest rate costs, maybe unemployment would rise. Now it's different. That's really good. When I look here at the audience, do we have any Thule people around? Yes, that's what I thought. This is the Thule family. Thank you all for being here today. Now obviously, you could say, but there's so many different and difficult things taking place around the world, and we talked about some of them already today. We have the more -- we had the politics in China moving in the wrong direction, more authoritarian leadership. Obviously, we have Putin in the East. We have Donald Trump. You could like his economics, possibly. Some problems with sort of common sense and etiquette. But we have challenges. Can we cope with all these things? Can we act rationally despite all these different things that's taking place across the world? Can the Thule man lie like this, focusing on what he wants to purchase online while so many challenges happen all around him? The answer is definitely yes. We're rational. That doesn't mean that we lack empathy, not at all. We should be sensitive and reflective and try to do everything we can to avoid all the problems in the world, but we're also rational, and we are masters of disasters. We are what HR people would say, agile and resilient. We have been so incredibly agile and resilient during the pandemic. We went out from -- in Stockholm, Ostermalmshallen. And we went from the deli, the extensive deli, to [ Lidl ]. That's what we did. And we coped well. Here we are. But we face so many different challenges. We've gone through negative interest rates in a booming economy to monster rates, media time, in a less booming economy. We went from excess street to Main Street. To me, I think it's a good place. I like the Main Street. That's a sustainable way of living. We have a price of money that is an interest rate, a normal interest rate. We are not part of the social experiment by central banks keeping negative interest rates in a booming economy, but something else, something more sustainable. And I like that. I think this is a better way of living. It's no longer living like in the Norwegian TV show Exit. This is something else. But then people -- and especially, if you invite a management consultant to your firm, he or she most likely he would say, well, yes, yes, yes. But we need to talk about VUCA. That's the Davos man, leaving from Davos and he learned VUCA. Volatility, uncertainty, complexity, ambiguity. We need to focus on that when making decisions in every company. Shoot me. We should not focus on that when making decisions to buy or acquire a new hotel. We should focus on the business, the yield gap. We should focus on economics, finance and leave this to someone else. Obviously, we all want to be here. This is my ambition together with my colleague, the illustrator, Gabriela, my picture of sort of heaven. Obviously, I am an economist. So you need to have the business cycle going like this. That's the stock market rally, we have some money flowing in. And the family is happy, they're no longer arguing, the kids are all right. Haven't had nice fish in the water. To me, this is [ Troms ], the 22nd of June, when it's 22 degrees. Not too cold, not too hot. Everything is just fine. And then I woke up this morning and found out that you bought a new hotel in [ Tromssa ]. Congratulations to me as a shareholder as well. Thank you. But this is what we want. We want to be here in this picture. This is what we picture as a nice, solid state of mind. A balanced world, not too hot, not too cold, but we're never there. VUCA. Yes, of course, it's VUCA. Everything is VUCA. Volatility, uncertainty, complexity, yes, it's always VUCA. Again, focused on something else. 25 years in finance have only taught me one thing, and that it is problematic for a macroeconomist to reveal the 25 years in finance, just taught you one thing. But it's the truth. You should never ever focus on GDP forecasts. Forget about it. Focus solely on this. This is the only thing I've learned. You should avoid a financial crisis. We don't like financial crisis. We say no thank you to financial crisis. We don't like it. Because that really drains the energy from the business environment. We've been through a financial crisis. Most of us would probably not experience a financial crisis again because banks are so incredibly regulated. So what can we say about the financial crisis? We say, no, thank you. And forecasting going forward, will we have the financial crisis over the next 5 years? No. That might be the final word for me. I would probably never ever be able to join you again, but I think we will not have a financial crisis over the next 5 years. That's good news. That's a green light for you. From an investment perspective, from a hotel perspective, well done. We should also say no thank you to dramatic changes in interest rates. Now you could say, have we really seen that? Yes, we have. Maybe not in terms of percentage points, but in terms of percent. Yes, the changes from 0 to something else is a lot of percent. And we will say no thank you to monster rates. Now where are we currently? No financial crisis, interest rates going in the right direction because the Thule family refuses to use his or her credit card. So forcing companies to reduce prices or at least not raising them as much, inflation dead. Well done. Green light to all of you. We will see more investments. I'm not looking at 5 or 6 hotels next year. It's 10 hotels for Pandox next year. Because interest rates is all that matters. It's terrible, but it's true. Look at Swedish consumer confidence. Swedish consumer confidence when we got the monster rate and the Thule family was worried that they might pay 7% in mortgage interest rates, they became incredibly depressed. This man had promised though he said that he didn't promise it was just a forecast of his own behavior, that he will keep rates at 0% for another 4 years. That was just a lie. He was just joking. And he conveyed that message that he was just joking that we will see higher mortgage rates and consumer confidence collapsed. Now this is funny because 3 years before, we all thought that we would die from COVID, but COVID and death, that's nothing compared to interest rates. Nothing. And now we are in an environment where people are rather happy. Again, we are sensitive people. We are not less empathetic just because we focus on interest rates. But this is what matters from an economic perspective. We can talk about the VUCAs and we can look at the TV news and see all the terrible things happening very close to us. And obviously, it sort of hurts as hell, and we should focus on that. But from a business perspective, no, let's get on with it. And what happens now, when the Thule family here in Tromso is cheering monetary policy becoming more stimulative, fiscal policy more expansionary across the globe simultaneously. They become happy. They haven't started going for that shopping tour yet. They will. We've started to exchange houses with each other, turnover going upwards. And what happens in the next phase? This is the next phase, when the Thule man is looking at premium sneakers. That's the next phase. Now we see retail sales troughing, and we see small signs, tentative signs of acceleration in household consumption. And the next phase, that's a really beneficial phase when we recover from the great depression of the monster rate, and we buy the premium sneakers. And then all of a sudden, who knows, one day, a new kitchen. That's quite funny because I find it so fascinating with financial markets and sort of the major trends we focus on. If you look at, for example, Nobia, kitchen manufacturer. Of course, they've had some challenges with a new factory in Jonkoping and so forth. But I think their share price moved from [ 92 ] to SEK 3.50. What is the market saying? What the market said and still says because it's -- the equity is still -- the share price is still SEK 3.50 is that the Thule man and the Thule woman will never ever buy a new kitchen. They will never ever do it. And that's fascinating with that kind of psychology, mass psychosis. And obviously, the Thule man now prioritizing premium sneakers and the next phase, it's a new kitchen. So what am I saying here? I'm not saying that everything is fantastic. It's not. But if we focus solely on economics right now, we have a more expansionary fiscal policy everywhere, in the U.S., in China and in Europe running deficits. We have a more stimulative monetary policy everywhere. Approaching stimulative levels in the U.S., not yet there, but they will. Definitely stimulative in Europe and will become even more stimulative. And in China, the Central Bank is doing all it can to revitalize especially the real estate market. We should not go against those trends. Because this is good news for all of us. Again, we listen, we focus on all the volatilities and the uncertainties and the tragedies of the world, but we know what matters more than death? Interest rates. And they are coming down. Thank you.

Thank you. Thank you for that. What a tour de force. And if the chocolate didn't wake you up, perhaps that certainly would have done. What does all this mean? Let's pull some of those threads together. So Henrik, come over and join Per, Kjell and Tim. Welcome back, all. Fabulous to see you. Where should we start?

Maybe with the VUCA guy here.

It didn't mention the VUCA, otherwise, I would just leave the slide and go on.

Maybe you need to think about -- we don't want either, by he way, anyway.

But I do want to start in Europe, if I can, with the Draghi report, Tim, that you mentioned. That mentions -- you touched on it, I think, an annual investment sum of up to 5% of Europe's GDP. By comparison, the Marshall plan after the second World War costs about 1% to 2% of GDP. So the Draghi report ask is huge. How effectively is Europe going to respond to that? Given you're on a roll, Henrik, why don't I come to you first?

I think it's on -- I can't understand that we're going to solve these problems by more regulation and more planned economy. I mean, the Draghi report is all about how the public sector should solve everything, and we should have X percent of GDP allocated to research and development. By who? I mean, that should be a company decision. I fail to understand, I think the Draghi report is way too much to the left for me. It's too much like socialism, and that's the European problem. Europe's problem is too much socialism. And Draghi is definitely one of those. I know he wouldn't agree, but he wouldn't come here.

It's fine, we're amongst friends.

On a more hopeful perspective, look at what formed Europe in the first place, it was a war. Where we teared down the whole of Europe and Latin laid the foundation for the formation of what we today call the European community. External pressure, massive pressure created Europe. If we're going to reform Europe, we need a lot of pressure, and we ain't seen nothing yet of that pressure. War in the middle of Europe will create pressure. An aggressive Russia cutting the cables to the Nordic region will increase the pressure, and it will drive reform of the public sector as well as the private sector. So what we can hope for is really that there will be an external pressure that forces the Nordic countries to collaborate, forces us to collaborate with the rest of the union, forces you guys to come along and become a member of the family, but then we need pressure. And Mr. Trump is probably one of the forces that will drive us in that direction. Draghi, not.

I think that Henrik has a really good point here because I think that what -- where does the pressure lead? And I think it will lead to first to really get a single market that works. And two, to deregulate. Because I think that if we compete with, for example, the U.S., what's there? What do they have? They have a big home market, and they have a lot of deregulation, cuts in taxes, et cetera. So that's the way we're going. So I think the Draghi report is good in terms of like analyzing the problem, but the solutions side is very typical European way of handling this. We -- I would say, I would love to have a lot of R&D investments, but from company side because that's growth driven. So I think it's really, really important. And we have to see with the new European Parliament and the new commission. I think they are like wobbling between these 2 perspectives. So we don't really know.

Now it's also fresh after the election results as well. I'm very conscious. These guys are fascinating, and you will want to ask some questions. Erik, is there anything from the audience?

Yes, absolutely. We have a lot of questions. I think this one is to Tim. So if tariffs are introduced from the U.S. at Europe, what measures is Europe likely to introduce? And is it possible to introduce tariffs on tech, say, Microsoft, Apple, Google, et cetera. And is that good?

Great question. 2 things. The European Commission has made clear -- it hasn't gone into details, but it's made clear that it will be ready to respond very quickly to any imposition of tariffs on EU exports by the United States. And if we look at how it's responded in the past when there have been trade disputes, actually, what it's tended to do is focus on a small number of very symbolic U.S. exports, often made in locations which are pro republican. And we've looked at products on that list include things like Levis Jeans, Jack Daniels, Tabasco sauce, Harley-Davidson, those...

Exactly. They did Harley-Davidson during the first Trump administration.

And my best guess is it will be those types of products that will come back on the list because the aim is not -- will not be particularly to sort of say, well, U.S. tariffs cost us X so therefore we must cost U.S. exports X. It's about making clear from the European Commission's point of view. But if you want to do this sort of thing, it doesn't come at no cost to you if you are in -- whatever, in Tennessee, Jack Daniel's, [indiscernible], whatever other geographical locations are considered. So that's my best guess about what the European Commission will do. It's quite hard to introduce tariffs on tech. But the European Commission has got a sort of equivalent measure that it's been thinking about for a while, which was put on suspension during the Biden administration and might come back, and that's something called the digital services tax. So that is meant to deal with the challenge or the perceived challenge that tech firms like the ones on the slide because they are global and because it can be a bit ambiguous where they actually are based when they provide you with a good or a service can shift profits to appear in lower tax jurisdictions and therefore deprive some of their main customer segments of revenue. And that may well come back on the agenda, I suspect, next year.

Kjell?

There is a dirty little secret. Think terrorism. Terrorism is asymmetric war. One is weak. One is strong. But it's the weak one that is the strong one. That's basically terrorism. The dirty little secret is that the U.S. has very small exports. And this, you know. Those of you that have studied international trade know that they have a very small export sector. We sit in one of the countries in the world with the biggest import and export sector, an open economy. All the Nordic countries are small, wide, open economies. Of course, we're interested in trade patterns. The U.S. is not. Walmart, the world's biggest company with 2.6 million people employees, has basically a shop in Mexico. That's all and I mean in Canada. They tried in Europe. It was too much work. Belgian s***.

Walmart in Belgium. That would be the day.

It's asymmetric for them. To put up tariffs on us is no problem. The other way around is a problem.

Yes. But I think we also have to remember, we are talking about goods here. And of course, the future for Europe is, of course, to grow in services, in knowledge. So in goods, we're going to be more circular. That business will shift. So I think that's very important to see, and it's much more complicated to have tariffs on services.

And services are about what people are providing. So I wanted to switch, if I can, to demographics because -- particularly with a view to the hotel industry employing people. Tim, you made the point that we are losing basically a Walmart every year in terms of people from the working populations disappearing. How does Europe deal with that? How does each country manage to support its growing aging population with a shrinking working population?

We need to work longer. It's very easy. My father is 84. He works every day. I know everyone is not privileged enough to do that for different reasons, but we need to work longer. That's it.

Plus productivity.

Exactly.

Driven by technology.

Machines, machines, machines.

And it's good news for the hotel industry. I mean we don't like kids. We must [indiscernible] just to be an adult.

They tend to spend more. I agree with that.

Yes. Back in the day...

Exactly. And we will not be in the daycare business. I realize that after listening to you today.

Help me. Erik, do we have any more questions from our audience?

Yes, we have several. But here's another one also to Tim. Has Europe lost its independence given that it's increasingly caught between American and Chinese interests while at the same time losing its standing in influence in the global South?

So no, I don't think so. But that's -- those challenges of an increasingly multipolar world dividing into competing blocks do, for the reasons I mentioned, make the future of the European Union more challenging. And if I kind of come back to where we started this panel discussion about what Mario Draghi was saying and...

You're the only one remembering.

By the way -- well, I remember you called him a socialist, which is a strange thing to call a former governor of a European -- I have to say. But I think his prescription, you can agree with it or disagree with it. But he is clear that scale is what's going to matter, particularly if Europe is to address geopolitical challenges like the ones that the questioner has mentioned, and wherever the investment comes from. And he actually thinks it should be a combination of public and private investment. If Europe is to compete with China and the United States and increasing the emerging markets in the global South like India, then ultimately what's required is scale and investment at scale. And that isn't something that 27 European Union member states can do individually on their own. If they don't cooperate, then Europe will never achieve the scale necessary to address this challenge.

Yes. But I think you had to add one thing more. And I think that challenge for Europe is actually to host more of clusters in terms of being globally. And we're looking very much now into like green steel and the new clusters forming. And I think the U.S., they are very good there. For example, all the major IT tech platforms are U.S. And Spotify started here, but they're moving more and more towards the U.S. Klarna, when they're going in stock market, they're not going to NASDAQ here. They're going to the U.S. So we actually -- we have to reduce, I think, taxes on capital. And we have to really find a good environment for clusters. And that is something that is in countries, but it's also -- it should be European clusters.

Kjell, did you have a couple of...

Size matters. Think of trolls, Norwegian trolls. They're big, right? And when those fight...

Have you met a troll?

Yes, actually. I've seen them from a distance. Big trolls. And they have these clubs. And they fight out. Two trolls are now fighting, China and the United States of America. We happen to be in between. And we're not as big, as you know. Look at what happens to Northvolt, the battery factory in the north of Sweden. When the trolls now fight it out on electric cars, batteries, pricing of batteries, and this tiny little factory, by troll standards, are stuck in the middle. And actually, we are stuck now in the middle between those 2 trolls fighting it out.

But you can do one thing if you are between. You can be fast. The problem is Europe is not very fast.

Not very fast.

Yet. We might get there.

Can I just take 10 seconds?

You can.

It's funny when everyone is so depressed about Europe, and it's very fashionable to dismiss everything European. But Europe is bigger than that. I mean obviously, from a macro perspective, Europe is not growing. It might be growing by sort of 1% GDP-wise, but that sort of makes -- it doesn't convey any real sort of message of where Europe is heading. We have parts of Europe, like for example here in Stockholm, doing really well. We have parts of Germany doing really well or Gothenburg area. We have Gothenburg doing well. We have even parts of Belgium doing real well and Holland. And you have...

Nobody is mentioning the U.K.

We have parts of the U.K. as well.

Very small parts.

And if we look at the northern parts of Italy, it's doing really well.

Very well.

Well, I'm very pleased to hear that there's positive noise for this.

Nice. Reality.

Reality. Excellent. But I just want to ask you one yes/no question as we bring this to a close because we can't not touch on the U.S. election. So I would like each of you to answer whether a Trump presidency is good or bad for Europe. And you haven't got long. I'll start with you.

Bad.

Great. Kjell?

Possibly good.

Bad.

We don't know. I only said booyah.

Thank you all. Thank you very much. We could be here for a long time, as you can see. But I think perhaps it's time for everyone to have a short break. We can no doubt continue the conversation. When we come back, we will bring some of these macro themes into focus for the hospitality sector. We reconvene in 30 minutes, but for now, please thank my amazing panel. Thank you. Thank you. [Break]

Okay. Welcome back. I hope you are feeling refreshed and revived. As promised, we're now going to look at some of the macro themes we discussed with some very interesting people before the break and look at how -- what they are going to mean for the European hospitality market. Eric, hello there in our lobby.

Hello.

Do you think we should get some intel from these fine people to feed into our discussion on the market?

Yes, absolutely. So here is the QR code again, should be up, if -- in case you don't have it already. But when you scan it, you will be asked your view on 3 questions. And please share with us what you think.

Indeed. So our first question is which of these political -- geopolitical shocks had the greatest impact on the European tourism and hospitality industry? Okay. We've got slow scanners. I see Erik is answering. Excellent. Very impressed with that. Nearly at the back. And your next question is, what factor explains the European hotel and tourism industry's resilience to geopolitical events? Still going. Have you answered, Erik? Good.

Have you?

I have no free hand. Okay. And our third question, looking to the future, which future trends will impact the European tourism and hotel industry the most? Pick whichever option you think is going to have the most impact. It's going to be fascinating whether any of the answers you put together will show any particular trends. We're going to be showing you those answers a bit later on today. And our next speaker may, in fact, have some insights that will perhaps change your views on some of those questions. She has a wealth of industry knowledge, having led high-profile advisory projects across the U.K. and Europe. And today, she will help us understand the impact of geopolitical events on European tourism and hospitality. Please welcome, her.

Please welcome Managing Director of Hotels at Christie & Co., Carine Bonnejean.

Good afternoon. Just one side note I was thinking whilst everybody was speaking a bit earlier on. If only French had made geopolitics and the economy is that interesting, we will have probably all listened a bit more because really it's boring in the French system. So let's get started on this. So as our world and economies grow even more interconnected through globalization, we are, at the same time, witnessing a surge in fragmentation, either political, economic or cultural. But at the same time, we are also seeing a rise in a lot of influential events. As you can see on the news every day, you're bombarded with war, trade sanctions, climate change impact on floods in Spain. And all of that is leading to even more complex economic relationship and dependencies between countries. And I think we've entered a so-called era of poly-crisis, where we have loads of crises happening at the same time, and they all impact on each other. This clear paradox of fragmenting globalization or global fragmentation, depending how you look at it, is shaping our global landscape. And geopolitical risk has become an increasingly crucial factor for travelers and for the global tourism industry, reshaping the way we are navigating the world and also maybe how we do invest or should invest in hotel real estate. So first of all, what makes a tourist? And in order to analyze geopolitical changes on tourism, we first need to understand the factors that are actually influencing travel demand. So for tourism demand to exist, we need 3 conditions to be met. The first one, we need the financial means to travel that we get through our income or through the strength of our currency. We also need the freedom to travel from a destination to another one. That is influenced by broader control or visas, for instance. And we need free time that we get when we're going on holiday. Only one of this condition needs to be impacted in order to have a ripple effect on the entire tourism growth. That's tourism demand. On the other hand, what the tourist needs is threefold. He needs good connectivity and accessibility. He needs accommodation offering, and he needs experiences in the destination in order to get the supply. And if we get both elements, supply and demand, we get the right equilibrium. That's a funny slide that we have there. So we just need to take it in parts. So first, when we have all events, we've tried to categorize them into 3 different levels. We have the demand events that tend to impact on travel behaviors. We have the price one that tends to impact like economic crisis or devaluation of a currency. And then geopolitical events which can be anything from wars to sanctions or diplomatic ties. And what's fascinating with this index, which is called the geopolitical index, is tracking over time a number of events and how they've impacted on international relationship. And it started in the 1900s, so it gives us some historical context. And what is fascinating is if you look at the current moment where we're having a lot of events and they're actually more active conflict currently in the world involving sovereign state than any other point seen in the Second World War, actually, our perception of risk seems to be quite general, in line and average with what we've seen in the past, which I think is quite interesting. In the following time line, what we've tried to do is give you all of the most influential event that have impacted on the tourism and travel industry since the 1990s. And as we can see here, a lot of the early 900s and 2000 were mostly about positive events that were positive for our industry. But as we move toward the decades and we start to move to the year 2000 and most importantly since 2007, we've seen an increase in negative events of all size. Whilst any single event may be very significant, it is actually very unlikely that is going to impact the market forever and in a substantial manner like we've seen during COVID. We recover. But this effect of any event can be quite profound on any specific region or markets. In that context, the tourism and hotel sector are very susceptible to short and medium-term disruption, particularly when the nature of the event is negative. And that can lead to a contraction in performance. So with that in mind, in terms of negative events, here is another very interesting index, which is the world uncertainty index. And this one, compared to the geopolitical risk of averaging, this one is actually going up and has started to peak and really peaked in COVID-19 during the pandemic even though it's been influenced by all sorts of shocks. So in that ever-changing geopolitical landscape, managing that uncertainty has never been more crucial for all of us. Now let's look at tourism. So despite that growing uncertainty in the world, the tourism industry has proven itself to be very resilient. And we've seen a sustained increase in arrivals in the 1990s that has been met by a booming supply of hotel rooms and a growing investor interest actually in our sectors. In this increasingly interdependent and interconnected, very difficult for a French person, world and economies, I've worked on it, I promise, the past 30 years have actually been transformative for travel. We've seen lower air fares. We've seen the introduction of low-cost airline. We've seen the introduction of the web as well as obviously the OTAs that we'll hear about Carmen a bit later on this and the rise of the middle class that we've spoken about a bit earlier on. And they all have participated to the democratization of travel, allowing all of us to travel more often and further than ever before. And even though you had some crises along the way with some minor adjustment in terms of the number of arrivals overall, it's an upward trend. At the same time, our industry has been through a phenomenal amount of innovation and adaptation as well as professionalization, another tough one, which is led by maturing market like the U.S., which has brought to us a lot of consolidation, M&A activity, and all of that has brought us more hotel brand penetration and the implementation of asset-light strategies. If we come back to the rise of the middle class, it has been particularly important to reshape the travel industry. When you look at this graph, the upper middle and high-income class used to represent 23% of our global population. And 30 years later, it actually represents 50% of our global population. As a growing part of our global population has the financial means to travel, obviously, that has an impact on expanding the market for global tourism, as we've seen. If we start looking to the future, again, as we have mentioned, the famous new postcode 1124, if I've got it right, that from an economic perspective and from population, what we can see in some countries in Africa and Asia going forward is that they're also going to travel more. And that is all our potential pool of tourists for the future. So we need to keep that in mind. If we think about just one country, which is India, which has about 1.4 billion inhabitants currently, it is estimated that by 2030, just for India, that will deliver 100 million more international trips. We need to be able to accommodate them. And I think this is probably one of the big questions that we have. Can we even do that? So in our big analysis of the trend, we wanted -- and that would be one of the famous question that we asked you at the beginning, to assess the impact of various specific shot to the industry. And we've looked at a number of them, from economic shocks to political tourism -- terrorism, sorry, and natural disaster. And what we wanted to understand is what condition do they impact in terms of tourism and more importantly, how long it takes for the market to recover from many of these shocks. And what we've seen is that the recovery time of the economic shocks is the most important. That is the type of shock that has the most profound impact on any market. And if you compare it with natural disaster, for instance, at the bottom, 4 to 6 months where people think it's a one-off. But typically, the economic downturn, the recovery takes about the length of the downturn itself. If we now look at Europe, within that context, Europe has clearly been leading the way in terms of tourism arrival. And even though we have some deceleration during economic crisis, Europe has been leading the way in terms of growth of arrivals, as we can see here. And they exceeded, just before COVID, 1.1 billion. Unfortunately, because since COVID, all the data has not always been provided, so we have to stop sometime 2019. But the concept is the same. Since again, the turn of the century, as we've said, the web, the rise of OTAs, low-cost airline and most importantly social media, most recently, have all revolutionized the way we travel, making it easier for all of us to explore the continent. And I think if you look at some Bollywood movie that was promoted by the Spanish government and has managed to give us a big peek of Indian travel or also Korean movie down in Switzerland, where everybody wants to take a picture by a lake now, you can see how powerful social media can be. So what about Europe? First is by far the global leader, worldwide arrivals, 55% goes to Europe. And that has a ripple impact, obviously, on the economy from GDP contribution to the job market. We also create challenges. As you can see there, the opportunity really lies in spreading that demand. Everybody goes to Western and Southern Europe. There is not that much demand comparatively for Northern and Eastern Europe, and that's probably where you have untapped potential. We need to divert that demand because currently, 60% of all arrival goes through 6 countries. So we really need to change that. Our resilience and trends lie very much in the fact that 90% of all other nights are generated by Europe, either domestic or intra-European. So if you keep that 55% in mind, what about the supply side? We actually only represent 28% of global room supply, and just over 40% of that is actually blended. Whilst arrival has grown by 189% over the last 3 decades, supply has only grown by 90%, and we're very much behind on that side. That explained maybe why Europe has some of the highest occupancy rate in the world. And on the other side, in terms of the investment side of things, investors have finally realized the power of hotels. We can hedge inflation. We are resilient. We have strong fundamentals. And compared to all other asset class, we're actually the most powerful. And that has been seen in the volume of transaction that has happened over the last 18 months. So what makes Europe competitive? And most importantly, why are we so resilient? We have the connectivity. I don't know if any of you even realize. We have 2,000 airports. Not all of them are always a massive number of flights, but we have 2,000 of them. We are also creating the trans-European transportation network, which is an EU initiative to facilitate the movement of goods, services and jobs across Europe. And that will improve our competitiveness and economic growth. We can travel. There are 400 million people of us in Europe. And thanks to the Schengen agreement, we can freely travel in 27 countries, let's not mention the U.K., without border control we have today. I live in London. It's fine. But I have a French passport. Free time, third one. Another benefit of Europe, not the U.K. We have more holidays than any country in the world. And as we start to experiment with 4-day working week, we're most likely to have even more holidays going forward. We are a shielded market. Europe feeds Europe. We have it all so we stay local. And that's why 90% of overnight actually are generated by [ rental ] travelers. And finally, political and monetary stability. In the world, every year, there are about 150 conflicts. We have only seen 2 since 1995, and one of which obviously is on our doorstep and reminded us that we're not fully protected, but we had a good time on that front. And the same, we are all united by a single currency. So obviously, we're not as impacted by price exposure. On that side, as you can see, even though in 2023, our consumer confidence was pretty low, we continue to travel. And we have recovered from one of the most severe shock to the travel industry ever, which was COVID. We are prioritizing travel more than ever before. There is almost an urgency that we should travel as much as we can whilst we still can because climate change might change it at some point. And that is particularly true for younger generation. So here are some of the mega trends that are going to impact our sector going forward. And we need to keep that in mind, from climate change to gen AI, to other tourism or emerging markets. And we will have to manage increased risk in this global fragmented world. But the tourism industry has proven its resilience with tremendous adaptation and innovation, and it can bounce back from the most important shock to the system pretty much we can see. So our future very much depend on our collective ability to continue that transformation process, to adapt to those mega trends and to embrace what makes Europe, which is the diversity of destination, climates and experiences that we can offer to tourists. Thank you.

Thank you very much, Carine. We actually have a cheeky sweepstake running on whether your answers will have matched what Carine talked about, and we'll see if we're all right when she comes back later. Now having worked with Pandox for over 7 years, we have been through various economic cycles and shocks. We are used to the fact that anything can happen, and it normally does. So we're going to step away from the normal conference agenda right now in search of our inner groove. I can see that some of you, especially my generally reserved compatriots, are starting to get a little bit nervous. But don't worry, we are in great hands. Here to help us raise the roof and hopefully learn a move or 2 is the one and only disco queen of Sweden, Lina Hedlund.

Okay. Thank you so much. Hello, Pandox. How are we doing? Great. Do I have some glitter around here? My favorite saying is it's never too early for disco. Okay. [Presentation]

Across 6 continents, a regular commentator on the sector. Please welcome him.

Please welcome Senior Director at STR, Thomas Emmanuel.

Good afternoon, Tom. And you'll notice we've been joined here on stage by Jake from Pandox. Feeling his thunder. Yes, well done. Welcome both. I hope you're feeling nicely loosened up. What we thought we would do now in this segment is Jake and I will ask Tom some questions, hypotheses, if you like, about the state of the European hotel market and allow him to agree or disagree with a bit of your help according to what STR's data is telling him. You up for that?

I'm up for that.

Great. Jake, will you kick us off?

Sure. I'll be X, and he will be in real life, fact-checking my statements. So it can't go any higher than this. There will be no growth for the European hotel market 2025. It's gone, done, kaput, depleted. And before I ask you, let's see the audience. Agree or disagree? This is the first time hoteliers are not positive. Mr. Tom?

Thank you. Well -- so the first question. And I'm going to look to some help, not just from yourselves but from some friends on the screen, to help me out with this. So you all said you disagreed. And I'm going to look to everyone's favorite football manager, Ted Lasso, to help me out the first time and mark this down. Vicky, Jake, as the first time that we are going to disagree because we don't believe that we have topped out. And I'm going to talk to you now about why. So let's start by looking at global demand, so the number of rooms sold globally year-on-year. And you can see across the world, most months have been positive. We've had a couple of very slight declines year-on-year. But mostly, it's been positive. And this is above '19 levels as well. So we've fully recovered as a global industry. But if we look to Europe, you can see there's no positives. Every single month, it's small but it's steady. We have grown the number of rooms that we sold year-on-year. And we put that demand into occupancy. What is occupancy year-to-date showing us? Well, we've grown by 1%. So it's not significant, but it's still growth. But the important thing to note here as well is that Europe has the highest occupancy of any region in the world, as you can see there at 70%. So Europe doing really rather well. And all that demand, that growth in occupancy is allowing us to grow average rates as well. So you can see there, 5% up year-on-year. That's really quite decent growth. And if you compare it to other mature developed hotel markets such as North America or Australasia, we're well ahead. So the fundamentals for Europe are very, very good. But let's now look forward. And at STR, we forecast a number of cities across the world on a quarterly basis. We are updating these forecasts later this month. So if you want to know more and how we change them, come and talk to me. But these are our latest forecasts. They are from the month of August. This is RevPAR percentage change for next year, where we think things will finish. So you can see the vast majority of cities across Europe, we believe, will continue to grow their RevPAR year-on-year. We've got a few declines. Obviously, every market is very different, but the general trend is a positive one. And if we look then to that on aggregate, we've got this year where we think things will finish. We're obviously only about 6 weeks away. But then if you look at the next 4 years, we're moving into what I would call steady but unspectacular growth. So sort of that 1%, 1.5% to 2%, maybe a little bit higher, not unusual. If we think back before COVID, it's where we were more often than not. So still, we are looking at growth. So we believe, just like you all do, that we're moving in the right direction. And if you compare it to other global regions, we're very much in line. So we still believe as an industry, we're pushing, we're pushing forward. And just before we go onto the next question, one of the reasons we believe that is helping to underpin that growth, that continued growth in Europe, is supply. So this is a percentage of existing supply in the construction pipeline. So that means it's either broken ground, if it's a new development, which obviously that most of them are not, or they will open within a year or are due to open within a year. Now remember, these are the highest countries. So some individual countries, you can see a little bit more supply going in. But Europe as a whole, 2.7%. And of course, not all of these rooms are going to open. They're not all going to open at the same time in the same year. So a relatively muted new supply environment will certainly help Europe. So I think we're all aligned, the audience and myself on that one.

Well done. Okay. My turn to put a question to you. The corporate traveler is on a permanent vacation and will not come back anytime soon. Agree or disagree? You can show if you want. That's okay.

What do we think? Okay. A little more mix but mainly still disagree. And I'm going to be with those that disagree. And what this reminds me of is during COVID, there was a particularly successful businessman. You might have heard of him, chap called Bill Gates. And he said the following, that 50% of all corporate travel would disappear in a post-COVID world. Now I hope when he looks back on that comment and that interview, he can see quite clearly that in his opinion, serious mistakes were made because it's simply not the case. And if we look at the data, this year especially, it really helps to underline that. We know that corporate demand was slower to come back than leisure demand. We're all aware of that. But if we look at where the growth is coming from year-on-year, September year-to-date, you can see that we're seeing slightly bigger increases from an occupancy perspective during the weekdays. That's Monday to Wednesday. So we're growing the most during the week. The corporate demand is fueling that growth that I talked about previously. And if we look at average rates, you can see a very similar situation as well, slightly more growth from a rate perspective than an occupancy perspective during the week. So that corporate traveler is firmly back. And looking at some of our gateways as well, you can see there just how significant the growth is on a weekday versus those shoulder nights or the weekends. But if we continue in that vein and we look forward and we look to business on the books for the next 90 days, so taking us into the new year, by day of week, you can see the biggest increase year-on-year, again, the standout Tuesday night, Wednesday night. So I believe Bill Gates was wrong, and the corporate demand is well and truly alive.

So I guess the WiFi, quick check-in, room service, breakfast, out, still in play. What about group travel?

Well, groups, we -- corporate took a while to come back. And who am I going to help explain this one? Well, I thought I'd go back in time to Downton Abbey and Carson, the ever reliable butler. So if we're talking about groups, I would say what's happening there is it's coming back slowly but surely, my lord. So we are getting there, but it's just taking a little while. And groups has been slower to come back. There's no getting away from it. If we look at group occupancy in Europe and in the U.S., we are well behind where we were in 2019. So we're still about 20% behind here in Europe, about 10% behind in the States. But the good news is that it's changing. It's coming back. Okay. So you can see there a little bit of seasonality as Easter shifted, showing the normal business returning as such. Stronger growth in Europe than the U.S. as well. So slowly but surely, but groups are once again moving in the right direction.

Okay. Something that Carine touched on earlier for you here, the number of international arrivals into Europe has peaked. Hasn't it? What's the data say?

Well, I'll look to President-Elect Trump to help me out here, and with just one word really. I don't know about you, but if you look at that a couple of times, it's really quite menacing, I find. But anyway, if we look at international arrivals, and I'm going to steal some data here from our good friends at Tourism Economics, and what we can see here is international arrivals indexed on 2019 for the Middle East and Africa as well as the Americas. And you can see that it's come back up. It's back up above, and it's moving gradually up and up. And so the gradient is moving in the right direction. And if we look at some of the key countries across those regions as well, you can see a very similar pattern. So those international arrivals certainly have not peaked in some of those key feeder markets. Of course, the U.S. continuing to move in the right direction, incredibly important. A big increase from Saudi Arabia as well. But that for me is not where the story lies when we look at international arrivals. The story lies a little bit further East. And this shows the number of outbound overnight departures from China. And we believe that next year will be the year that those Chinese outbound overnights overtake 2019. So the Chinese, as we know, they haven't come back in the numbers that they were here prior to COVID, but they're starting to move. A lot of that demand, though, from China is going to be intra-regional first of all. It's going to be predominantly in Asia. So we think that it will take another year for those international arrivals from Asia Pacific as a whole to get back to 2019 levels. So we've got a couple of years of pretty good growth certainly to come from APAC. And if you look at that navy blue bar there, you can see, which represents China, the increase '24 and '25 and then '25 on '26. So certainly, a lot more demand to come back from those Asian markets. And if we look at things on an index level to 2019, you can see there all above by 2026. So I don't think those international arrivals have peaked yet. We're still moving in the right direction.

Okay. As a proud Swiftie, I don't see The Eras coming back -- The Eras Tour coming back next year. Will meeting and events fall off a clip compared to 2024?

So I'm going to Disney to help me with this one, and Hercules, Phil might have not seen, but the [ .gif ] works. So okay, I'm going to give you that one. We're not going to agree on much today, but I'm going to give you that. But I don't think that events are going to fall off a cliff. But what we do have to be cognizant of is that '24 was an exceptional year for Europe for events. And really nothing like I can remember, and I've been looking at this state for 20 years now. So let's look at some of that. We're going to look at concerts. We're going to look at sporting events, and then we're going to look to '25 as well, because all is not lost. But let's start and you'll like this, Jake. So we'll start with Taylor Swift, okay? And I think we all need to say, as an industry, thank you to Taylor Swift, because she has done incredible things States side in '23, here in Europe in '24. And you can see here the nights that The Eras Tour came to the cities, look at the occupancy and the rate percentage changes. Look at those axes, quite phenomenal. Warsaw taking top spot there. Occupancy up 30%, rates up 140%, really phenomenal. And what Taylor also drove that we're not seeing quite as much of as we were prior to COVID candidly, is compression nights. So north of 90% occupancy. And you can see there, Cardiff 96%; Edinburgh and Liverpool, 92%; London, even 90% of those U.K. tour dates. So really phenomenal demand from Taylor Swift. But it wasn't just the U.S. Queen of Pop, it was also the U.K. Queen of Pop, and she played a series -- Adele played a series of concerts in Munich in August. She played 8 nights. And you can see there, RevPAR up 107% year-on-year on the nights that Adele was playing. And when you look at the daily data, you can see just how impactful those concepts were for the Munich hotel market, which, by the way, has had a really very strong year as well. So concerts were good. They really did help. But of course, we had the Olympics as well. So in Paris, we saw some phenomenal performance during the games. It was a bit weaker on either side. That has to be said. Paris hasn't had the best year overall. But ultimately, what we saw was average rates hitting EUR 773, occupancy 85%. So during the games, Paris had a very good time of it. And the growth year-on-year as well was really significant. It reached 162% during that Olympic period. So France got its share, but so did Germany. Of course, the European championships only come around once every 4 years. And you can see here the premium, the occupancy premium on a match day versus a non-match day. And of course, it gets bigger as the cities get smaller and in Dortmund, in [ my city ], you've got more seats in the stadium than you've got hotel rooms in the city. So it's no surprise that you see such strong performance. But as with any mega event, it was rates that really drove the performance during the European championships. And you can see that once again, the incredible premiums that were achieved. So '24 was great. It was unprecedented in that respect, but we've got some good things to look forward to in 2025. And the Gallagher Brothers, Oasis, reforming. Now this is U.K.-based concerts. But ultimately, it's doing very good things. Now I wanted to go and my wife really wanted to go. So the good husband that I was, 9:00 that morning, when the tickets were released, I got into the waiting area, waited for 3.25 hours. This is a screen shot from my phone. And when I got into the queue, I was #380,278. So that was a waste of time. So I'm not going, but a lot of people are and a lot of those people are already booking rooms, which is fantastic to see. And this is looking at the whole week that Oasis are playing, not just the concert night, the whole week. We've already got 69% business on the books in Cardiff, the week Oasis are playing, and is around 50% in Edinburgh, Dublin and London as well. So Oasis is going to do good things. There's also rumors that Lady Gaga is going to announce a tour date across Europe. And I got an e-mail yesterday actually saying Jamiroquai are going to be playing across Europe as well. So we're going to see events coming into Europe. It's not going to be as hot as '24, but we'll still see some good stuff.

Fantastic. I'm not a fan of Oasis, but maybe people are booking and if they cancel, they'll stay the week anyway. What about rates? Exactly. What about rates? You touched on it briefly, mid-market will still be squeezed?

I'm going to let Jack Sparrow help me out here. Of course, not. Actually, it's interesting because mid-market does often get squeezed, but it's not the case at the moment. So if you look year-to-date, year-on-year by class across Europe here, you've got occupancy and average rate. We're talking rates, so that's the blue bar that you need to be looking at. And you can see, actually, upper mid-scale and upscale, so sort of those 2 middle classes are doing really phenomenally well. It's only luxury hotels, which have always got more pricing power for obvious reasons, that are actually outpacing it. So that squeezed middle is actually doing very well. And it doesn't matter what night of the week we're talking about either. You can see that is the case, whether it's a shoulder night, weekday or weekend. So absolutely, those squeezed middle hotels, rate-wise, really doing very well.

Final statement then, and this is a big one, so I will first ask the audience, and then I will ask you. Europe, as a hotel destination, has lost its luster and is losing out globally. We have become a museum of a museum, a Wes Anderson movie of a destination. So let's ask the audience.

So I can see 3 greens amongst a sea of reds and I'm going to agree with the majority as well. I thought who better to answer this, because this needs to be answered forcefully. So I thought who's better than the Iron Lady of the Western world the late great Mrs. Thatcher. And just, no, no, no, we are not losing out globally. And so how can I represent it? So I've taken 50 countries and look at the list of countries along the bottom there. So from every corner of the globe, and occupancy year-to-date. And I've highlighted there, those in Europe in orange. Now there's one outlier, Turkey. So for the purpose of this, we're going to say Turkey is in Asia because, really, most of it is.

A true statistician.

Absolutely. But elsewhere, you can see every single European country that is there is in the top half of the occupancy table. Ireland, the U.K. tops at -- the U.K. has the strongest occupancy of the G20. We are doing well. So for me to finish off, I just wanted to try and summarize that and summarize really what we've talked about today, okay? So in summary, to showcase that Europe is doing well and is not losing out globally, let's think about it. So just like Armand Duplantis for the Swedes in the audience, we're #1 in terms of occupancy. Our rates are still growing. Corporate demand is up, and we still got a big opportunity when it comes to groups because they are not back. International arrivals are going to continue to move forward. The pipeline, new supply, relatively muted as a percentage of existing supply, which benefits us. We are an event capital. We are an event Mecca. We've heard already this morning -- or this afternoon, sorry, just how we can host these events. We do it well, and we're always going to be able to host. So put that all together, confidence. We should be confident. The future is bright for Europe as a hospitality market. And with that, thank you all.

Great to see that our industry is actually performing well, and you are all on the money, so well done. Thank you, Jake and Tom, very informative. Now for our last contribution of the day, let's turn our attention to the most important people in our industry, the people who stay in our hotels, our guests. I've had the pleasure of knowing our final speaker for many years, back from when she was leading investment at Host Hotels Europe. She has, not only a deep and rich industry knowledge, but also a passion for our sector that knows no bounds. It's my privilege to introduce her to you. Please welcome her to the stage.

Please welcome, Director of Commercial Strategy at Booking.com Carmen Hui.

Good afternoon, everyone. So I am acutely aware that in the last of the very long lineup today of rich deep content that is thought-provoking, that you're probably trying to still digest. So I've got some work cut out for me to keep your attention for the next 18 minutes or so. But don't worry, it's not going to be a round 2 of the Never Ending Disco. However, I will promise you to keep this fast-paced, light and as interactive as possible. Now every single session before me has talked about the macroeconomic and geopolitical forces at work that we -- that are creating potential headwinds for our tourism industry. But like Tom, I actually remain very, very optimistic about the future of travel. And today, I'm going to share with you some travel trends that fuel my optimism, one that I don't think you should ignore. So I'm going to cover 3 tech trends that will dominate this next dawn of travel, the Pandox Hotel Day theme and how they're going to be creating opportunities to unlock ways for you to address traveler needs that is going to be able to create this and enable you to address these traveling needs in a radically supercharged way. Now I mentioned this is going to be highly interactive, so I'm going to invite you to actually already get your phones ready, but starting with our first tech trend. Did you know in our -- in the western world, we check our mobile phones 110 times a day and spend an average of 6 hours, 40 minutes on these devices. Now if you're anything like me, you have this pocket-sized device attached to your body at all times. It's become more important than a wallet, a credit card or an ID and you feel pretty useless without it. On this note, I invite you to take these precious devices out and get ready to lean in on some live audience polls. Now our tech trend #1 is really no surprise. Mobile phones continue to penetrate our everyday lives. Diving straight in, please scan this QR code, also for the audience joining in virtually. We'd love to hear your thoughts, tell us how many hours a day do you spend on social media? By the way, this is a teaser on tech trend #2, in case you're wondering. So I'm very, very curious. Is it 0 to 1 hours? 2 to 3 hours? 4 to 5 hours? Or 6 or more? And for the avoidance of doubt, I know there might be some debate about this, but LinkedIn does count as social media for purposes of this survey, so please tell us. I'm also wondering if this audience is going to over-index or under-index. How are we doing on the live poll? All right, 1 to 3 seems to be the majority. Not bad. Okay. Can we bring it back? Thank you. So over the past decade, we've seen a decline in traditional media channels like print, radio, TV. And today, over 1/3 of total media consumption happens on social media platforms. This translates almost 2.5 hours daily on social media channels. Now -- so I think this audience is actually smack in that benchmark. But look who's over-indexing, Gen Z. The age range between 12 and 27-year-olds. For them, social networks have become the main search engine, the main form of search and have overtaken traditional search engines as a preferred way of discovering things around them. Millennials, by the way, are not that far behind. TikTok leads the way with user engagement, averaging about 70 minutes a day of user engagement, with people checking this app 20 times per day. What is really impressive about social media is that they are able to personalize feeds based on individuals' usage experience and preferences. And that means that this becomes a very effective way to engage with consumers. But what does that mean for the world of travel? Let me illustrate this through a personal story. So I've lived in Europe now 20 years. I visited Paris and Munich a number of times, both for work and for leisure. And of course, I know the Paris Eiffel Tower and the Octoberfest. But it took my Gen Z daughter to tell me about these 2 experiences. Both of which have gone viral via social. One, on my right, is a EUR 25 croissant that you can find in Paris. And the one on my left is a German waitress carrying 13 Steins beer with her bare arms. Now, needless to say, my 12-year-old daughter was very impressed by both and she now wants to visit both Paris and Munich just to experience these things. Now some of you in the audience might be thinking, these experiences are absolutely uninteresting. I mean who wants to spend EUR 25 on a croissant the size of a human head, right? And I'm spending a couple of hundred euros to do a trip to Paris just to eat a EUR 25 croissant, may be not the greatest ROI either, and that's okay. We all have our personal truths here. There are many, many of them. But what I want to highlight is that social media can cater to all our individual truths in this room in very, very effective ways. And for us in travel, that means we now have the ability for far-reaching, fast reaching and highly personalized ways for people to discover the world. So trend #2, social media's network effect is growing rapidly, one to not ignore. I'm going to invite you again to join into the conversation. Head of the next trend, please scan the QR code again. And this time, we'd like to know how many hours a day do you use some form of Gen AI. Is it just a hype for the audience? Or has it already become reality? So that was fast, zero to 1 seems to be the majority, some hovering in the 2 to 3. Okay. Right. So if I had to pick one word of 2024. That would be Gen AI. What is it? For a nontech person like me working in a tech company, I had to ask some of my tech colleagues to explain this in layman's terms. And what they explained was that GenAI is like a smart assistant that learns patterns and then creates new content based on those patterns. So okay, that's pretty easy to understand. Gen AI, itself, was -- AI itself is not a new thing, but what is that hype about Gen AI? Why is it such a mystery? Well, to understand this, let's take a look at the meteoric rise of this technology. So first, ChatGPT acquired 1 million users just 5 days after launching in November 2022 and as if that weren't impressive enough, it is estimated to have reached 100 million monthly active users just 2 months after the launch, making it the fastest-growing consumer application in history. And as of last month, it doubled that and reached 200 million users. On the business side, within just 9 months after OpenAI launched chat GPT, they saw teams adopt this technology in over 80% of Fortune 500 companies. How many in this room either work for or work with a Fortune 500 company? Not many yet? Okay, a few hands coming up. The global AI market is expected to grow at an impressive 35.7% CAGR to $1.3 trillion by 2030, driven by significant advancements in computing power and data availability. So what's happening is that there's a whole new ecosystem being created around Gen AI. And whether you realize it or not, you are probably experiencing Gen AI in some shape or form in your everyday lives. In finance, if you're working with a banking app of any sort. In energy, real estate, health care, communications, just to name a few. So why does this matter for us in travel? Well, I've just shared that consumers are going to be experiencing this technology and the power of this technology in many different aspects of their lives. And they're going to be, in turn, setting that expectation towards travel experiences. Already, 48% of travelers trust AI to plan their trips. And that trust factor is higher at over 50% for Gen Z and millennials. At the same time, these technologies are becoming more and more accessible to businesses, bringing opportunities to solve what would have been highly complex problems, requiring engineering and human power now in a much easier way. This opens doors for us to revisit the art of the possible. Think about this. What is a problem that you've had, problem, challenges, solving before in the last few years? Well, time to bring it back to the table and revisit that, because Gen AI is going to be an enabler for many, many things in our industry. According to SCIF Research, Gen AI, this technology provides a big growth opportunity for us in travel. There is an estimated $8.4 billion of AI value to be created in the near term alone across these 4 major use cases that you see here. So customer service chatbots, developer efficiencies, reputation management and performance advertising. Now some concrete examples of what this looks like is, for instance, for travelers, it's a personal assistant that lives in your phone and knows you so well that it can make personalized recommendations for your different contextualized needs. For businesses, perhaps it's tools to make it easier to surface relevant content about your unique product offering and combine structured as well as unstructured data in a much more automated way. Now having heard these examples, I'd like to ask your input one last time during the session. Please scan the QR code behind me and tell us, which Gen AI use case do you find most compelling for the travel industry? Quite curious about this one as well, because we're going to take your inputs and bring that back into our panel discussion a little later. How are we doing? Okay. So there seems to be a strong leaning towards customer service quickly followed by performance, advertising, but it's a decent spread. If we can capture that, Alex, and so that we can come back to it in the panel, that will be great. So this is a good time to segue on to how these technology trends that I just talked about, mobile, social, Gen AI can help you compete on what will really matter to travelers in a radically supercharged way. Now technology has already been helping to remove friction for travelers across needs for a long time already, basic needs such as value, ease, trust, choice. I believe that serving these universal needs will become table stakes as we move into this next era of travel. What I want to hone in on is the traveler experience. Now [ Karin ] talked about what tourists needs earlier in her session. She talked about experience. We heard about the VUCA. We heard about the need to keep -- avoid -- sorry, that was avoid financial crises and keep interest rates low. I'm going to add this extra dimension on there. My hypothesis is that if you don't think about what consumers need, you're done. Right? Don't stop at macro, don't stop at the business, think about your customer, because that's where the competition will be on as we enter into this new dawn and the technologies that I've just talked about will help you and enable you to serve those needs faster. So in terms of experiences, what are travelers looking for and what can you think about creating those competitive advantages on? So let me share some global highlights from the Booking.com travel trend survey. Now there's a lot on this slide. So I'll just tell you the 3 most important things. One, people want to travel with their people, significant others and immediate family members are the primary travel companions. Two, top motivations travel include the desire for relaxation, exploration and quality family time. Three, beach trips, city trips and trips to visit friends and family are over-indexing globally. Honing in on Europe because we know Europeans are driving the majority of travel in this region. Great news. 76% surveyed are optimistic about travel. They're also contributing to global relaxation with 57%, indicating that taking time to relax as there are -- is their top reason to travel. And in terms of choosing accommodation, this is what really matters for Europeans. Comfort and coziness and the familiarity that an experience can bring beat out unconventional or high-tech experiences. I found this one particularly interesting. Now although most of our travel here, demand here is intraregional, I think it's important to actually keep an eye on the distinctions across geographic sources for the future. And I've chosen, too, to highlight today, the U.S. traveler and the Indian traveler, which we've also talked about throughout the course of the day. Now India, [ Karin ] mentioned, we need to keep an eye on because there's going to be an extra 100 million travelers outbound in the future. And they are actually the -- predicted to be the fastest growing in terms of outbound source markets, so one to really watch out for. And here, I want to highlight some similarities and differences that stuck out for me. So Indians love to travel. That's a really positive thing. 88% telling us that they feel like they're best selves when they do. The U.S. is hovering around the global average and European somewhere in between. And Indians are similar to Europeans in terms of their travel motivations. With the top reason being to seek out relaxation, whereas on the other hand, U.S. travelers' top reason to travel is to reconnect with love ones. But that's about where the similarities end. Let's look at the differences. I thought these 2 were particularly interesting to look at. So one's about pleasure, which is a term that we've been talking about across this sector, and the other ones, traveling with family. Now clearly, Indians and Europeans think differently about their desire to combine business and leisure and possibly seek out relaxation in either cases. I thought the family one was also interesting, because we heard from the panel earlier that Europeans don't love children or something along those lines. Well, what they're telling us here is that they certainly don't like to travel as much with children as Indians do. And furthermore, with Indians, they've indicated that a large majority, more than double the global average, will travel with their parents. So think about what types of multigenerational experiences you could potentially compete on in the future as you think about potentially targeting these different source markets. Now the desire to travel the world is strong. But doing it sustainably is also important. 83% of travelers agree that sustainable travel is important to them. And those who want to travel more sustainably, well, this does not equate to sacrifice in comfort or experience. And in fact, travelers say sustainable behaviors like eating locally sourced foods or experiencing authentic, cultural experiences actually enhance their travel and bring them closer to local communities. Now looking ahead, our travel predictions 2025 research reveals that many travelers want to redefine how they experience and engage with the world around them and will leverage new technologies like Gen AI to help them do so. Two-thirds tell us they will use Gen AI to respect the location they visit and contribute positively to them. So this is painting a picture, a really positive one of a 2-way street, where destinations fulfill travelers' needs, and travelers, in turn, fulfill the needs of the destinations that they hope to experience. Think about that, right? This is a future where demand will be actively ensuring that we have a world that's worth experiencing for generations to come. So I'm going to end on that very positive bright note. I've covered 3 trends today that, I think, are going to create opportunities for our industry, which I urge you not to ignore. And these technologies will enable you to serve the increasing complex needs of travelers in a radically supercharged way. How you deploy this, how you choose to deploy. It's not the what, but the how will be the differentiation and will create the winners and losers of this next dawn of travel. My last call to action before we wrap up is don't sit still. Don't just take this as, "Oh, yes, this is interesting," and go away and do nothing. " Take one action as you leave Pandox Hotel Day because if you don't, you're probably not going to be here much longer. Thank you very much.

Thank you very much, Carmen. As always, a very interesting perspective. Thank you for sharing, come back along in Tom and [ Karin ]. Take your seats. We didn't plan that. Welcome back, everyone. Now we're going to rattle through a few answers to some questions that [ Karin ] and Carmen raised earlier. So firstly, let's look at what you all said. To the first question, which was which of the following political -- geopolitical shocks had the greatest impact on the European hospitality industry. What was the result? Maybe we should have a drum roll. Okay. [ Karin ], does that result surprise you?

No, I think it's clever, if I may. No, no, I think, as we've said, economic shocks are of the most profound effect, but OTAs, as we've also seen and the introduction of low-cost providers had a detrimental impact. So I think it's right, one being negative, one being positive. So yes, fully. Well done.

Well done. Let's rapidly move on to our next question. And we asked here which factor explains the European market's resilience or the hospitality markets' resilience to those geopolitical events. Who -- Tom, what do you think? What was reconsidered?

Obviously, they all have their merits. The majority, yes, have gone with the 90%, which we benefit from massively. I think if I'm looking at that and answering the question myself, I'd probably say, see the high political and economic stability because we saw [ '08 ] and if we think about if we have security and stability, it doesn't matter about everything else. You're not going to go.

People don't go.

So the fact -- that is what, for me, is probably -- trumps everything else.

Trump's an interesting word. Okay. And thirdly, we asked you, looking to the future, which future trends will impact the European tourism and hotel market the most common?

Well, I'm slightly biased towards the second answer, of course, based on what I've just shared with you earlier today. Rising demand from emerging markets, which was the highest voted, I'd say, yes, definitely one to keep an eye out for. That said, the 2 largest populations, right, India and China, you heard from Tom that Chinese travel will predominantly be domestic for probably the near to medium term. Same holds true for Indian travelers. So 99% of Indian travel is expected to be domestic through 2030. So this is something to bear in mind, right? They're a big population. As and when they actually go outbound, it will make an impact, but the majority, for the near term, is still going to be largely domestic.

It just means there's time to prepare. That's all that mean.

Plenty of time to prepare.

Okay. And you asked the audience, and you said we discussed it in the panel. You brought up those 4 use cases for Gen AI and asked our audience what they thought would be most likely. So you talked about customer service, talked about developer efficiencies, reputation management and performance advertising.

Yes.

Customer service and performance advertising were the 2 favorites. Were you surprised by that? Is that what you often see in terms of how people think about gen AI?

I wasn't surprised. I'm not surprised by customer service because, again, if you are working in an application today that has any sort of messaging chat bot, there's already a very high likelihood that Gen AI is powering some of those responses, and it's going to get smarter and smarter behind the scene. So it's very invisible to our eyes at this moment in time. But customer service, there's huge opportunities, of course, for us in travel, no matter what type of player you are. Performance advertising as well, think about examples where, in the past, right, you have had humans spend weeks. Our team spends 2 weeks -- has historically spent 2 weeks copywriting something. But now I can do it in 15 seconds using Gen AI. And that extends into translating into different languages. Also changing, adapting to very nuanced contextualized needs, like, for instance, I want to target an Indian traveler who is traveling with their parents. And I want to rights thinking about Liia's dogs' images, I want to write it in a cuddly type of tone. Gen AI can really help you do that in a super simple way.

It's going to be fun to watch. Let's stay with it and also pull in some demographic themes. You talked about adoption rates of GenAI being really high amongst Gen Z and also becoming American like you and also millennials.

Gen Z.

Is there evidence to suggest that the rise of Gen AI and hospitality may actually leave some travelers behind, without wishing to cast dispersions older generations who perhaps are less familiar with technology or people from certain communities where social media penetration and the like is lower? Like could we miss some travelers? I don't know, Tom, if you had thought on that?

I think we probably could. I think -- when you asked that question, I immediately just think about my parents. And up until a couple of years ago, when my dad's health started to fail a little bit, they were traveling every year, twice a year and much like many in those generation, they were time rich, cash rich and healthy. So -- but they would -- when they would book their trip to Portugal, they would go to their local independent travel agent and get him to book the flights and print out the confirmation, which they then take to Gatwick Airport to give to the check-in staff. So I think -- I don't think they're unusual. And obviously, we can't just tar everyone with the same brush. But I do think we've got to be careful that we don't alienate certain people. Some products, I think, is going to be absolutely fine, but others, not. And I think we need to bear that in mind because there is a risk there, I believe, yes. They will be intimidated. They wouldn't even know what it means, so yes.

Do you have any thoughts to throw in?

I think that we'll learn. We've learned everything. And as we were discussing it, I have -- I'm lucky to have a very old grandmother, she's 98, And she wanted a mobile phone because she wanted to be like everyone. So obviously, she adapted to having a mobile phone. It is just a question of time, I think. And as we said, GenAI, for a moment, you don't even know it's happening to all of us, but it is happening. So even my mom and my grandmom maybe have been forced to adopt Gen AI.

Exactly. And do you think it will just get into people's worlds because they don't have to participate?

It's always a choice nobody's forcing Gen AI on individuals and humans. But if you look at, for instance, what happened during COVID, right, you had all the generations of people stuck in their homes, not being able to go out, and they were "strongly encouraged" because that was the only method available to go to their mobile to buy things that they would normally have just walked physically to a shop to do. And so I think people will learn as [ Karin ] said, but there will always be a choice not to use this technology.

I mean it sounds incredibly exciting and the opportunity to speed things up and to be able to make businesses be more efficient and bring relevant things to people sounds amazing. But just to put one other challenge to, probably you, Carmen, and we'll see if anybody else wants to comment, is there a challenge that tech generally and AI and hospitality is taking this humanity out of it, which is such a key part of the industry? What do you say?

Well, when you introduced me, you said, I am passionate about hospitality, so I have to caveat my answer by that. I work for a tech company, and I can confidently say that no one wants to travel to experience technology. That's not why they travel. People want experience to travel the world, real human experiences. What technology can do is enable that and make it easier, all right? So it's really focusing this -- on this aspect of how does technology take away some of those pain points that a human may have had to solve for that now technology can solve for much faster and easier and let that human do more important, more complex things, right, upskilling, adding more value to what the customer is actually needing. So I think it's much more about augmenting our humans in hospitality rather than replacing humans.

That's actually very clever because I interviewed [ Sébastien Bazin ] not long ago, and he said, "I hate artificial intelligence. Why do I want anything that's artificial? Please, can we rename it augmented intelligence", so you guys are bang on point. That is a very, very good place to leave it. Thank you all very much for your time today. Everyone, please thank Carmen, Tom and [ Karin ]. And just when you thought you were safe. Like a magicians coat, we have one more trick up our sleeve for you this afternoon. We've covered a lot of ground today. We've discussed some really important topics, highlighted just then some really valuable opportunities that the industry must grasp, pretty serious business stuff. Sometimes it can be hard to lighten the mood. Sometimes we need a bit of help to laugh out loud. Joining us on stage now to assist us with that, I am delighted to introduce Mia [indiscernible].

Give the mind relaxation and energize the body, how about that? I think we need that. Stand up. Yes. And -- yes, stand up, you were always -- almost, like, asleep. Okay. Take a nice, deep breadth in and smile. Oh, let me see that nice smile and stretch, stretch people and then you just let arms go down and breathe and laugh out loud. Okay, that was just a test. Once more. Now you know it. Okay, are you ready? Breathe in and smile. Let me see the smile, big smile and now down and laugh out. Oh, you're really good. Last time, breathe in and laugh out. Oh, that was really good, really good. Okay. Stand like this and let the jaw go down, and we're going to look silly, just so you know it. Everyone is. So bend your knees and then we just do we like this. Silly, eh. And the last thing we are going to do an explosion. In Christmas, we do like this in Sweden. Are you with me? Feet also. Can I hear you. Okay. Faster. Thank you so much. You did a great job.

The therapy of laughter. Thank you, Mia. Great job. How was that? How was that? Good. Okay. Liia, Jake, I'm not sure they're convinced. Thank you for joining me, again. What a great day we have had. Jake, can I come to you first? What resonated most with you today?

So when we do transactions, and smart people like yourselves are advising us, I keep telling you speak to me like I'm a golden retriever. And I think we should approach the time we're in as golden retrievers by always approaching an opportunistic, excited to learn new things, excited to try new things, maybe not that laughter thing again, but also try to filter sort of the noise from the signals and really focus on, "Can I control this. Okay. Then I'll focus on that. If I can't control it, water under the bridge." And so how does that go for investments? Well, having optionality in new real estate assets or hotel assets, so that's it. Be golden retrievers, I guess.

I love the dog thing. Liia, how about you? What are your main takeaways?

Three main takeaways. Can you hear me?

Yes.

Yes. One is that despite the uncertainties in the world, I think there's really good conditions for growth for hotel in European hotel market, which is good. I think market is more resilient and more important for the economy than people think. The second thing is that I'm super happy. We bought a hotel in Tromsø. It seems to be the good thing to be and for climate change and for experiences and everything else. And the third part is that I'm actually super inspired by all the speakers. I learn so many -- truly, I learned so many new things. So it has to be a 30th Hotel Market Day.

We have to do it again, completely right. So with what you have all heard today, we asked you at the beginning, but how do you now feel about the European hotel market? Is it in a good place right now? Where are those signs? I cannot see a single red sign, so we have done our job, fantastic. That is great to see. Jake, thank you for being here to share your thoughts, particularly when you were up late last night buying a hotel in Tromsø. And Eric, thank you very much for being here in our lobby, helping get some of your great questions to our speakers. A particular thanks to Eric who stepped in 2 days ago when poor Anders was taken ill. So get well soon Anders and a huge round of a pause for Eric. Now Liia, I know that Pandox would like to make sure that once again, the Market Day gives back. Will you tell us a bit more?

Yes. And in honor of the fantastic speakers, Pandox wants, once again, to donate NOK 100,000 to a good course and that is to [indiscernible] Save the Children's Fund, in honor of all of you guys, but also for the fantastic speakers. And it's more important than ever, the work they're doing in these days.

It certainly is. Thank you, Liia. Thank you for your help. Thank you. And so we come to the end of our day today. For the last 2 years, Pandox have asked me to host this event. So time for a few thank yous. Firstly, to Liia, Jake, Eric, Anders and the whole Pandox team, thank you for the honor of hosting. It's a truly fantastic event to run it for 29 years. Huge congratulations for keeping it fresh, informative and as we've seen, a lot of fun. Yes, you can clap if you like. To the wonderful production team, [indiscernible], this show simply would not happen without you, so to Sophie in my ear, and Alex, who is never far away. Thank you. You are true pros. To our speakers, as Liia said, your insights are, not only hugely valuable and expertly delivered. You have all put up with me hounding you for weeks, so thank you. But of course, this industry is nothing without people to host and entertain. We are the ultimate people business, hence my question to Carmen earlier. It's hard. Hospitality is no more than one group of people looking after another group of people. But for me, what sets this industry apart is it's always done with invention and imagination, so thank you all for being here. This show was nothing without you. We hope you found it fun and thought provoking. Next year, as you know, will be the 30th birthday edition. It's fair to say you can expect something very special. But for now, the bar is open till 7:00, so please do join and stay and join us for a drink or 2 to celebrate this year's event. [Foreign Language]