The market for credit default swaps, the tools banks and fund managers use to hedge against losses on corporate and government debt, is on the rise again. The ongoing volatility in the financial markets is leading some investors to turn to CDSs for protection against default. A growing CDS market indicates the rising concern many shareholders have about the safety of their investments. While credit default swaps still have a bad reputation stemming from the role they played in inflating the global credit bubble that led to the 2008 financial crisis, they remain a useful tool for managing an investment portfolio. While a growing CDS market is another indicator of global economic concerns, it still remains a fraction of its size before the financial crisis. To read more, click here.
An exodus of capital in China is casting doubt on the country’s economic prospects and shaking global markets, The New York Times writes. Wealthy Chinese families are increasingly trying to move large sums of money out of the country for fear that the value of the currency will fall and their savings will be worth less. The capital flight is already putting significant pressure on the country’s currency, the renminbi. The outlook in Japan is also darkening. Caught in a cycle of expansion and contraction, Japan’s economy shrank in the final three months of 2015. To read more, click here.
A new study from the Center for Hospitality Research (CHR) has discovered that when hotel guests post a review of their stay accompanied by a numerical rating, the comments and ratings do not always complement each another, with the negative comments having more of a significant influence on the guests’ ratings than the more satisfied and positive reviews. The authors believe that hoteliers could benefit from text analytics who can gather more specific and reliable information to improve guest experience. Read more here.
While the financial markets suggest that the U.S. is heading for a recession, every other economic indicator shows that this isn’t the case. So while oil hits a 12½-year low and the Dow is down 14.5 percent from its all-time high last May, healthy job growth in January means that employers are having trouble filling vacancies. And consumer spending is picking up. Here’s a look at why central banks are having such a difficult time addressing recession fears around the world. Bottom line: Markets aren’t always the best predictor of recessions and sometimes can even help bring them about. Read more here.
An independent report alleges that Airbnb purged more than 1,000 listings from its site in November in an attempt to rig a survey of its New York City hosts. The data Airbnb released in December showed that 95 percent of its “entire home” hosts in New York City share only one listing. Months after the alleged purge, listings of multiple homes by hosts on the site have already begun to proliferate again, the report states. According to The New York Times, Airbnb has a history of removing listings in bulk in New York. In 2014, the site got rid of more than 2,000 listings in response to an affidavit filed by the state’s attorney general, Eric Schneiderman, which asserted that nearly two-thirds of apartments listed in the city were illegal sublets. Read more here.
Earlier this week, research firm STR released data claiming that Airbnb has no real impact on hotel room demand in Manhattan. Now, hospitality industry advocates are speaking out, claiming that this conclusion cannot be true, as New York room rates have recently declined, even though visitor numbers continue to increase. The American Hotel & Lodging Association, among those questioning the report, says that the study did not explore whole rental units available full time, or multi-units operated by landlords. Regardless of how much Airbnb is impacting New York, however, a new study from Travelex says that only 4 percent of the 2,000 American leisure travelers surveyed planned to use Airbnb for their next vacation, and that 23 percent plan to stay in a branded property instead. The low number of Airbnb users bodes well for the hotel sector. See below for more news on Airbnb, and for more on this story, click here.