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Future

New York icon Ian Schrager has seen the high-end hotel future: We’re carrying our own bags

New York icon Ian Schrager has seen the high-end hotel future: We’re carrying our own bags


When New York City is at its bleakest, that’s when Ian Schrager tends to shine.

There was 1977, the Summer of Sam. A serial killer prowled the boroughs. Times Square was a cesspool. Martin Scorsese’s “Taxi Driver” might as well have been a documentary film. After dark, people were terrified to go outside. That’s the year Schrager and partner Steve Rubell decided to open a nightclub on Manhattan’s forlorn West Side.

“The West Side was like no-man’s-land, like bombed-out London in the ’40 and ’50s,” Schrager recalled. “Just an unseemly, dangerous place where nobody wanted to go. One of the reasons we went there was because there wouldn’t be any problem with the neighbors.”

Studio 54, they called their club, and New York nightlife would never be the same.

“When times are bad, people always seek out an escape — always,” Schrager said, the Brooklyn in his voice only partly sandpapered away by decades of Vanity Fair adulation and gossip-worthy friends. “I opened my first hotel under Ronald Reagan when interest rates were 21, 22%. So, I learned very quickly what Tiger Woods said about golf, that winning takes care of everything. The vagaries of the economy just don’t matter when you go to market with a good product.”

With his first flurry of New York hotels — Morgans, the Royalton and the Paramount — Schrager invented the modern boutique hotel. With the Delano in Miami and the Mondrian in West Hollywood, he defined urban resort. After selling his expanded Morgans Hotel Group in 2005, he turned his attention to high-end residential buildings including Manhattan’s 40 Bond and 50 Gramercy Park North, then began rethinking hotels all over again.

Just in time for New York’s latest slap upside the head.

Battered by COVID-19 and squeezed by empty offices, missing tourists and rising crime, even some lifelong New Yorkers have started sputtering: “New York is over! Who needs it anymore?”

“Ridiculous!” Schrager scoffs. “New York is forever. And I don’t believe in paradigm shifts. We haven’t had one of those since Noah and the Great Flood. We always go back to living the way we lived before. Always. I don’t have any data. I can’t tell you when. But I felt that way in March of last year, despite what all the experts and pundits were saying. No. We will absorb this shot. We will move on. Even 2008, when we almost went into a financial meltdown, a few years later, what happens? Everybody goes back to what they were doing.”

It’s all just a matter of riding the wave.

Schrager’s current wave is something called the PUBLIC hotel, which he describes as a new approach to luxury hospitality, a luxury almost anyone can afford, at least every once in a while.

Don’t miss: Little by little, New York City workers are heading back to the office

The 367-room PUBLIC Hotel New York, designed by Pritzker Prize-winning architects Herzog & de Meuron with minimalist interiors by British designer John Pawson, is a contemporary 28-story building at 215 Chrystie St. on the Lower East Side near the Bowery, another New York district not always known as a tony destination. As at most hotels, the rates bounce around a bit depending on occupancy. But they’re hovering in the $200s, not the $500s and $600s that some high-end New York hostelries demand.

“You know luxury is not only for rich people,” Schrager said. “Luxury is a state of being, a state of mind. It’s about feeling comfortable and having the freedom of time and being treated very kindly and in a very friendly way, rather than being inundated with all these telltale things from the past. White gloves. Gold buttons. Bone china. Who needs all those luxuries from Europe in the 17th and 18th centuries? That doesn’t cut it anymore.”

Today, Schrager said, hotel guests want to check in quickly and get up to their rooms. They want the cappuccino now and don’t care if it’s served in a china cup and saucer. They want fast Wi-Fi. They’re happy to carry — or more likely roll — their own suitcases to the room. “Suitcases have wheels now,” Schrager said. “Why do you need one person to unpack your car for you and someone else to bring your luggage to the room, when you’ll have to tip both of them $5? We’d rather focus on the service that matters.”

One of Ian Schrager’s latest projects, the 367-room PUBLIC Hotel New York.


Nikolas Koenig

Now that the post-pandemic visitors are finally returning to New York — vacation and business travelers — his hotel is buzzing again, Schrager said. “I do think the pandemic has made people think about what’s important to them. There is a more spiritual understanding of what matters.”

Schrager is also in business with Marriott International
MAR,
-2.52%,
having partnered with the company on its new luxury-lifestyle line of EDITION Hotels. “We’re doing about 40 of them around the world,” he said. “I don’t build them. I don’t purchase them. I just create them.” 

Also see: Inflation data says hotel prices are skyrocketing, but you can still find deals

But the PUBLIC is his. “I think this is the future of the industry, to be able to provide a really sophisticated product with exciting food and beverage and entertainment options and great service that’s available to anybody. People aren’t stupid. They know the real thing when they see it.”

The plan, he says, is to “do 10 of them over the next five years and then sell to someone who can do a hundred.”

Then, Ian Schrager can go create something else.

Ellis Henican is an author based in New York City and a former newspaper columnist.



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Opinion: Biden’s infrastructure plan must look to the future, not wrap itself in a nostalgic view of past American greatness

Opinion: Biden’s infrastructure plan must look to the future, not wrap itself in a nostalgic view of past American greatness


CAMBRIDGE, Mass. (Project Syndicate)—President Joe Biden’s $2 trillion infrastructure plan is likely to be a watershed moment for the American economy, clearly signaling that the neoliberal era, with its belief that markets work best and are best left alone, is behind us. But while neoliberalism may be dead, it is less clear what will replace it.

The challenges that the United States and other advanced economies face today are fundamentally different from those they faced in the early decades of the 20th century. Those earlier challenges gave rise to the New Deal and the welfare state. Today’s problems—climate change, the disruption of labor markets due to new technologies, and hyper-globalization—require new solutions.

Capitol Report: Biden says he’s ‘prepared to negotiate’ on infrastructure as he meets bipartisan group of lawmakers

We need a new economic vision, not nostalgia for a mythicized age of widely shared prosperity at home and global supremacy abroad.

On climate change, Biden’s plan falls short of the Green New Deal advocated by progressive Democrats such as Rep. Alexandria Ocasio-Cortez. But it contains significant investments in a green economy, such as supporting markets for electric vehicles and other programs to cut carbon-dioxide emissions, making it the largest federal effort ever to curb greenhouse-gases.

“
Economics is different from an arms race. A strong U.S. economy should not be a threat to China, just as Chinese economic growth need not threaten America.
”

On jobs, the plan aims to expand employment offering good pay and benefits, focusing, in addition to infrastructure, on manufacturing and the growing and essential care economy.

Book Watch: Caregiving is a vital part of the nation’s infrastructure like bridges and roads

The role of government

New ways of thinking about the role of government are as important as new priorities. Many commentators have framed Biden’s infrastructure plan as a return to big government. But the package is spread over eight years, will raise public spending by only 1 percentage point of gross domestic product, and is projected to pay for itself eventually.

A boost in public investment in infrastructure, the green transition, and job creation is long overdue. Even if the plan were nothing more than a big public investment push financed by taxes on large corporations, it would do a lot of good for the U.S. economy.

“
We need a new economic vision, not nostalgia for a mythicized age of widely shared prosperity at home and global supremacy abroad.
”

But Biden’s plan can be much more. It could fundamentally reshape the government’s role in the economy and how that role is perceived.

Traditional skepticism about government’s economic role is rooted in the belief that private markets, driven by the profit motive, are efficient, while governments are wasteful. But the excesses of private markets in recent decades—the rise of monopolies, the follies of private finance, extreme concentration of income, and rising economic insecurity—have taken the shine off the private sector.

At the same time, it is better understood today that in a complex economy characterized by so much uncertainty, top-down regulation is unlikely to work. Regardless of the specific domain—promoting green technologies, developing new institutional arrangements for home-care workers, deepening domestic supply chains for high-tech manufacturing, or building on successful workforce development programs—government collaboration with nongovernmental actors will be essential.

“
If it succeeds, the example it sets of markets and governments acting as complements, not substitutes—demonstrating that each works better when the other pulls its weight—could be its most important and enduring legacy.
”

In all these areas, the government will have to work with markets and private businesses, as well as other stakeholders such as unions and community groups. New models of governance will be required to ensure public objectives are pursued with the full participation of those actors who have the knowledge and capacity to achieve them. The government will have to become a trusted partner; and it will have to trust other social actors in turn.

In the past, each excessive swing in the state-market balance has eventually prompted an excessive swing in the opposite direction. The Biden plan can break this cycle. If it succeeds, the example it sets of markets and governments acting as complements, not substitutes—demonstrating that each works better when the other pulls its weight—could be its most important and enduring legacy.

Biden’s unhelpful framing

In this regard, it is unhelpful to view the Biden plan as a way to restore America’s competitive position in the world, especially vis-à-vis China. Unfortunately, Biden himself is guilty of this framing. The package will “put us in a position to win the global competition with China in the coming years,” he recently argued.

Peter Morici: Biden doesn’t understand how dangerous China is

It may be politically tempting to market the infrastructure plan in this fashion. In an earlier era, the prevailing fear that the U.S. was losing its edge to the Soviet Union in ballistic missiles and in the space race helped catalyze a national technological mobilization.

But there is much less reason for fearmongering today. It is unlikely to buy much Republican support for the plan, given the intensity of partisan polarization. And it diverts attention from the real action: if the plan increases incomes and opportunities for ordinary Americans, as it should, it will have been worth doing, regardless of the effects on America’s geopolitical status.

Moreover, economics is different from an arms race. A strong U.S. economy should not be a threat to China, just as Chinese economic growth need not threaten America. Biden’s framing is damaging insofar as it turns good economics at home into an instrument of aggressive, zero-sum policies abroad. Can we blame China if it tightens restrictions on U.S. corporations as a defensive measure against the Biden plan?

The plan could transform the U.S. and set an important example for other developed countries to follow. But to achieve its potential, it must avoid misleading state-versus-market dichotomies and outdated Cold War tropes. Only by leaving behind the models of the past can it chart a new vision for the future.

This commentary was published with permission of Project Syndicate—Biden Must Fix the Future, Not the Past.

Dani Rodrik, professor of international political economy at Harvard University’s John F. Kennedy School of Government, is the author of “Straight Talk on Trade: Ideas for a Sane World Economy.”

More From Project Syndicate

Megan Greene; How the Fed could give a green light to environmentally sustainable investments

James K. Galbraith: Here’s why fears of surging inflation are off-base

Minxin Pei: China sabotages its economic future by escalating tiff with West over forced labor of Uighurs



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‘The World in a Selfie’ Review: The Trouble With Tourism

‘The World in a Selfie’ Review: The Trouble With Tourism


Two years ago, Rebecca Mead of the New Yorker published a long article, “The Airbnb Invasion of Barcelona,” that addressed some of the challenges of unfettered tourism. Prior to the Covid-19 pandemic, Barcelona, year over year, found itself steadily drowning in foreign visitors. Short-term rentals on Airbnb, often illegally operated, filled the city’s apartment buildings and depressed the local housing supply. Barcelona’s main tourist draws, including Park Güell and the Sagrada Familia Church, were thronged by enormous quantities of visitors.

In the summer of 2014, spurred by the drunken antics of holiday-makers, protesters took to the streets to bring attention to “the pestilence of young visitors who came to Barcelona not to sample the local culture but to enact internationally recognized tropes of partying.” Three years later, 60% of Barcelona residents claimed in a survey that the city had reached or exceeded its capacity to host tourists.

Hating tourists is nothing new, as the Italian journalist Marco D’Eramo notes in “The World in a Selfie,” translated into English by Bethan Bowett-Jones and David Broder. Mr. D’Eramo quotes a British magazine article from 1848 lamenting that, for all their merits, the advent of the railroad and the steamboat had “afflicted our generation with one desperate evil; they have covered Europe with Tourists.” Adam Smith, in his “Wealth of Nations” (1776), heaped mocking scorn on the vogue of young men gallivanting around the Continent on so-called Grand Tours.

“The World in a Selfie,” first published in 2017, has been updated in this English-language edition to account for the pandemic, which shut down international travel for a year. Mr. D’Eramo highlights tourism’s paramount role in the world economy, smartly observing that Covid “proved the centrality of tourism through tourism’s omission. Once this industry ceased, not only airlines and shipping companies but aircraft manufacturers and shipyards found themselves on the verge of bankruptcy.” The book, “an inquiry into the tourist age,” is somewhat disjointed, moving distractedly at times from topic to topic and losing the thread in the philosophical weeds. But in its more focused moments, “Selfie” makes for a bracing, provocative examination of an all-too-human pastime.

One recurring theme here is our futile search, through travel, for the “authentic.” Mr. D’Eramo saves his most biting commentary for UNESCO and its “World Heritage” listings, which he likens to a “kiss of death.” “Once the label is affixed,” he writes, “the city’s life is snuffed out; it is ready for taxidermy.” That’s hyperbole, no doubt, but his commentary on the unintended consequences of preservation is compelling.



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Opinion: How to invest in the future — here’s an idea for a ‘Spacebook’ fund

Opinion: How to invest in the future — here’s an idea for a ‘Spacebook’ fund


Two years ago I was so bullish on Tesla that I basically wanted to become “the Tesla Fund.” Tesla was trading around $50 a share. It closed at $563 on March 8.

That was two years ago. I thought the setup was perfect for Tesla
TSLA,
-5.84%
and the pending electric-vehicle onslaught. Fast forward to today and Tesla is up more than 10-fold since we bought it, even after dropping more than 30% from its $900 high. The EV revolution is here and most of the stocks of the companies in that revolution have risen to bubblicious levels.

I am scouring the globe and even the universe to find the next revolutionary industries to get in front of, and I keep coming back to what I call The Space Revolution and The Virtual Reality Revolution.

So here’s what I’ve come up with as the best risk/reward for my hedge fund and perhaps for individual investors as well. I’m calling it “Spacebook,” which means being overweighted in space stocks and Facebook
FB,
-3.39%.

Big bargain

Let’s start with Facebook. Holy cow, Facebook’s valuation is cheap. The shares trade for 22 times the consensus earnings estimate for the next 12 months among analysts polled by FactSet. This is for a company whose sales are expected to increase 25% in 2021 and 20% in 2022, following 22% in 2020. (You can see the consensus sales estimates for Facebook and other big tech stocks here.)

That valuation is only slightly ahead of a forward price-to-earnings estimate of 21.7 for the S&P 500 Index
SPX,
-0.54%.
For the index, sale per share are expected to increase 9% in 2021 and 7% in 2022, after a 3.5% decline in 2020.

Facebook’s consistently high double-digit revenue growth is a lot for a company that did $86 billion in revenue last year. What’s most exciting about the growth numbers is that they don’t include any of the upside that Facebook is about to achieve in the burgeoning virtual reality market provided by the Oculus platform. As I wrote in January, the VR market is coming, and it’s coming soon. Facebook is going to be one of the biggest winners in that market, if not the biggest.

As I type this about Facebook, I can’t help but think back to two years ago (and 1,000% ago) as I wrote to you about Tesla. I’m getting the same exact feelings about valuations and revolutions.

To be clear, it’s not this current generation of Facebook’s Oculus virtual reality headset that is going to go mainstream, but it’s the next, lighter, even more advanced one and the versions thereafter. Facebook has a critical mass of developers as well as apps and games being created for its platform already. The first version of Oculus was like a late-version iPod.

Space revolution

Now, how many times do I need to talk about the Space Revolution? The technology has gotten advanced and cheap enough that the whole thing is literally taking off. This is a private company’s dream come true. We are starting to see private space companies come public just as I was saying they would be two years ago.

Over the next 20 to 30 years, there are so many applications that can come to fruition. Space factories, space tourism, space hotels, asteroid mining, supersonic transportation, new colonies — the list goes on. If your time horizon is the next two to three years, I don’t know what to tell you. It might not happen in that period.

But if you are like me and thinking about the next 10,000 days, then we have to get in front of this revolution. I started two years ago when I bought Elon Musk’s SpaceX in the private market for my hedge fund and followed up a year and a half ago when we got into Virgin Galactic Holdings
SPCE,
-2.78%.

A lot of public technology companies are bubbled up right now, space players included. We are probably paying two to three times what these companies are really worth right now as they come public.

VC-like investments

However, we are making venture-capital-like investments in these with the potential to see 50 to 100 times our investment over the next 10 to 20 years. I’m OK paying up a little for that kind of opportunity. If we compare this sector to the bubbled-up electric-vehicle revolution that is already here, I like the risk/reward of the coming Space Revolution much more. The EV market has already had its huge run.

So how do we continue to invest in the Space Revolution? SpaceX is clearly the best company right now. If you’re wealthy enough, with a little work, you can find a way to make a private investment in the company. I’ve done that in my hedge fund.

But if you don’t have hundreds of thousands (if not millions) to throw at SpaceX, I think Rocket Lab
VACQ,
-4.00%
is the best way to invest in the space revolution right now. You can read more about Rocket Lab and Vector Acquisition Corp., the special purpose acquisition company, or SPAC, that is expected to take it public, here.

I have begun to take a position in both the hedge fund and my personal account. It has come down some (like most space stocks and high growth tech over the last week) since my initial report and I have continued to add to the position. Virgin Galactic remains another favorite public space company to invest in. We first got into that name in November 2019 at around $8 per share.

Virgin Galactic, just like the other space companies, is probably a little overvalued at the moment. Especially with no revenue and not being able to get its test flights successfully into orbit. But again, we are looking up to 30 years down the road and this is currently my third-favorite way to invest in the space revolution.

I’m researching four or five other space companies that have recently come public. I’ve also made Facebook one of my largest positions again for the first time in a while.

As always when making an investment, I suggest that you give yourself room to add to the position if it falls. Over the next six months to two years, I think we’ll have the opportunity to buy most small-cap tech stocks at lower prices. On the flipside, I can’t guarantee that those positions will drop, which is why I have begun to build my positions in the space and virtual reality revolutions, and why I will continue to add to them if given the chance at lower prices.

That’s why I am basically becoming “the Spacebook Fund.”

Cody Willard is a columnist for MarketWatch and editor of the Revolution Investing newsletter. Willard or his investment firm may own, or plan to own, securities mentioned in this column.



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Gadgets

It’s 2:30 a.m. in Wyoming: ‘You’re holding a smartphone to let a husband say goodbye to his wife via FaceTime after 60 years of marriage’

It’s 2:30 a.m. in Wyoming: ‘You’re holding a smartphone to let a husband say goodbye to his wife via FaceTime after 60 years of marriage’


The first wave of the pandemic hit New York, and other cities with dense populations. As hospitals were overwhelmed with patients and struggled to access enough personal protective equipment and ventilators, the midwest and south were largely spared the worst of COVID-19.

Then, came the fall.

COVID-19, the disease caused by SARS-CoV-2, started disrupting families and ravaging lives far from the metropolitan counties, especially in the southern and midwestern states such as Texas, North Dakota, South Dakota, and Wyoming.

North Dakota has 167 COVID-19 cases per 100,000, while Wyoming has 140 coronavirus infections per 100,000, followed by South Dakota with 124,000 cases per 100K, according to the Center for Systems Science and Engineering at Johns Hopkins University.

“
‘You hear stories from Europe and China. You tell yourself it is not going to happen here.’
”


— Andy Dunn, chief of staff at the Wyoming Medical Center in Casper, Wyo.

As of Monday, there were 72,683 confirmed cases in North Dakota, and 846 deaths, and the population there has 7% positivity rate. New daily cases hit 1,143 over a seven-day period. Wyoming has 28,169 confirmed cases, 176 deaths and a 16.2% positivity rate, and 759 new daily cases.

“Everyone at the frontline has extra hours, extra shifts to keep up with the volume,” said Andy Dunn, chief of staff at the Wyoming Medical Center in Casper, Wyo. “We need more resources, we look for supplies from all over because we are seeing patients from South Dakota, too.”

But the extent of the crisis in Wyoming has still been a shock. A medical doctor from Colorado, Dunn moved to Casper ten years ago. In 2017, he took the role of chief of staff, and he is currently taking a hands-on role, treating COVID-19 patients at the center.

“You hear stories from Europe and China. You tell yourself it is not going to happen here,” he told MarketWatch. “And then, all of a sudden, it is 2:30 a.m., and you are holding a smartphone to let a husband say goodbye to his wife via FaceTime after 60 years of marriage.”

Andy Dunn, chief of staff at the Wyoming Medical Center in Casper, Wyo.

Patients in their 40s and 50s

“We all knew that it was coming, but you don’t get it until it is here, and it hits you. Things are rough at the hospital right now,” he said. Nor are his patients all elderly. At his hospital, several patients are now in their 40s, while numerous others are in their 50s, Dunn said.

The Wyoming Department of Health has recently approved requests from 15 counties to implement mask mandates to slow the spread of COVID-19. But a petition on Change.org asking for end restrictions in Wyoming was signed by 800 people just in a few days.

But some medical professionals in these midwestern states are not pro mask mandates. “If it is not an N95 mask, well, then you won’t be sure that it does protect you properly,” said Lisa Drylie, a nurse working in an operating-room division of the Sanford Hospital in Fargo, N.D.

“
‘A mask mandate has to be part of the mitigation of spread.’
”


— Adam Hohman, a 43-year-old nurse practitioner in Fargo, N.D.

“So, no, I don’t think that a mandatory masks mandate is going to help us,” she added. (In a review of studies on masks last month, the journal Nature concluded that “the science supports that face coverings are saving lives during the coronavirus pandemic.”)

It’s preferable to use a high-quality cloth or surgical masks of a plain design instead of face shields and masks with exhale valves, according to an experiment published in September by Physics of Fluids, a monthly peer-reviewed scientific journal covering fluid dynamics.

States like New York used the mandatory mask mandate as one of the main tools to stop the spread and to dodge the second wave in the fall. As of July, New York Gov. Andrew Cuomo, a Democrat, launched the national “Mask Up America” to promote is mask mandate.

But in North Dakota, there are moments of respite. Drylie sometimes hears joyful music from the lower floors of her hospital. It gives her hope. “It happens when they celebrate a patient who has recovered and dismissed,” she said.

Others disagree with Drylie. “A mask mandate has to be part of the mitigation of spread,” said Adam Hohman, a 43-year-old nurse practitioner who lives in Fargo, N.D. “A limited government is good, but we got to a point where we needed to do something more.”

Shortage of health-care workers

But beyond the masks, the shortage of actual health-care workers is another common issue that ties together North Dakota, South Dakota, and Wyoming, along with many other midwestern states across the U.S., according to local reports.

“The biggest problem I am hearing from my colleagues is that they don’t have enough nurses, said Hohman, originally from Minnesota, where he works at a hospital located in a rural area in North Dakota. He has worked 10 to 14 hours a day when the pandemic first hit.

Hohman said that hospitals in North Dakota are increasing their bed capacity by opening some units or converting other wards. “But they are having trouble in finding nurses to keep up with the work load, and to staff those beds,” he said.

Some hospitals in North Dakota even allowed health-care workers with COVID-19, when asymptomatic, to keep working in coronavirus units. And the U.S. Air Force has recently deployed 60 medical personal to help the state hospital staffing crisis.

The shortage of nurses across the U.S. is not a new problem, but the pandemic shed renewed light on the issue as the coronavirus pandemic hit. But North Dakota and Wyoming are actually among the best in the country in rankings of nurse-to-patients ratios.

“
The pandemic shed renewed light on the shortage of nurses across the U.S.
”

North Dakota has 16.4 nurses per 1,000 residents, making it the fourth-best equipped state in the country, while Wyoming is No. 1 with 19.9 nurses per 1,000 population, according to the Bureau of Health Workforce, an agency of the Department of Health and Human Services.

If even two of the best-ranked states for U.S. Nurse-to-State Population Ratio are struggling, others like Texas, California, or Montana are suffering even more, according to recent research by STAT, a media company focused on health, medicine, and scientific discovery.

“Public-health infrastructure and disaster planning in the United States remain underfunded and under-appreciated at all levels,”Hohman said. “We remain underprepared for protecting our nation’s health in the setting of current and future pandemics.”

When the pandemic hit New York in March and April, Hohman traveled to New York to help his colleagues. “I saw the worst of the worst up there. I think we underestimated our risk here in North Dakota due to our ruralness and a mentality that we are not New York,” he said.

Related:COVID-19 spread when 5 million people left Wuhan for Chinese New Year, yet 50 million Americans will still travel for Thanksgiving

As of Monday, there were at least 257,549 deaths due to COVID-19 in the U.S. and there have been 12.4 million reported infections of COVID-19 since the pandemic began, according to the John Hopkins University database. Worldwide, there are 59 million cases and almost 1.4 million deaths.

Texas and California both have over 1 million reported cases of COVID-19. Texas has 1,153,612 million cases, 21,013 deaths, and a 10.6% positivity rate, as of Monday. California has 1,114,524 reported infections and 18,726 deaths, with a 5% positivity rate.

New York, which was the epicenter of the pandemic in the U.S. during the early days of the first surge, has the most deaths of any U.S. state (34,319), followed by Texas, California, Florida (17,991), New Jersey (16,761), and Illinois (12,050).

With Thanksgiving weekend looming, the medical community fears that up to 50 million people traveling to see relatives and friends will create even more community transmission. The Centers for Disease Control and Prevention has asked Americans to stay home.

Medical doctors like the Wyoming Medical Center’s chief of staff, Andy Dunn, have one, reminder for Americans, one that will be more likely if they heed advice. “Be boring, stay put,” he said from his office in Casper, Wyo. “Thanksgiving will happen next year.”

This story is part of a MarketWatch series Dispatches from a Pandemic.



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Peloton Bike+ Review: Rationalizing a $2,495 Exercise Bike

Peloton Bike+ Review: Rationalizing a $2,495 Exercise Bike


If there is a winner in Corporate America’s grueling Tour de Pandemic, Peloton would be it.

As we endured month upon month of quarantine, the word “Peloton” became as ubiquitous to in-home exercise gadgets as Kleenex is to tissue, or Band-Aids are to boo-boos. For those who can afford them, swanky stationary cycles and treadmills that pipe live-streamed classes into our living rooms are a godsend during lockdown.

Peloton enjoyed a 172% revenue increase between April 1 and June 30 compared to a year ago and posted its first quarterly profit. By July, its order backlog built to $230 million, or more than 100,000 bikes. The company’s $38 billion stock-market valuation makes it worth more than

Ford Motor Co.

To celebrate, Peloton launched an even swankier product called Bike+. This $2,495 machine is a nod to the future of in-home fitness, where smart exercise gear is more versatile, offers every class you’d get at the gym and is capable of interacting with users in real time.

At first glance, the Bike+ looks nearly identical to the standard Bike. Introduced in 2014, the original can now be had for $1,895 following a Covid-era price cut. I’ve put several miles on both models over the past year: Both burn just as many calories, deliver just as much miserable leg burn and produce just as much sweat.

The Bike+ display can pivot away from the handlebars to make it easier to do non-bike parts of the workout, such as weight training.



Photo:

Kimberly Stoll

If I bend the math a certain way, putting the Bike+ in my home office costs less than a gym membership I’m struggling to utilize. But, I’ve really got to be limber, since working out with Peloton instructors and tracking your metrics also require a $39-a-month “all-access” subscription.

Health-club fees are all over the board—from

Planet Fitness’s

$10 a month to potentially hundreds for Equinox. But these gyms require us to leave our bunkers, lowering their current appeal. Peloton is making good use of the stay-home status quo to get people comfortable with pricing plans that were difficult to digest in normal times.

Meanwhile, introducing a more expensive bike with added bells and whistles allows the company to cut the price of the entry model, setting up a two-tier system that reinforces this notion of affordability.

Tom Cortese, a Peloton co-founder and its chief operating officer, told me the company doesn’t want to mess up a good thing, so the Bike+ revamp primarily only addresses items that riders wanted improved: The adjustment levers are updated for easier use; cables are better hidden in the bike’s guts; multipiece steel construction has been replaced by single-piece units without bumpy weld marks.

Peloton redesigned its power cord and adapter in order to keep with the bike’s own sleek design.



Photo:

Kimberly Stoll

“We even made the AC adapter smaller and nicer looking,” Mr. Cortese said. Emblazoned with a prominent “P,” the plug mimics the same thoughtful industrial design that has long made the Peloton a looker.

Such aesthetic refinements aren’t worth the $600 hike over the standard model, however. (You can buy a decent road bike for about that much.)

A lot of value is in the Bike+’s 24-inch touch screen. It’s bigger and easier to see than the traditional bike’s 21.5-incher and has a new 360-degree swivel feature. Flipping the screen away from the handle bars toward the rest of the room is a hallmark improvement, allowing for easier viewing of yoga classes, weight-training sessions and guided meditation when pedaling is not on the day’s agenda. Or when both are called for.

I recently took a 30-minute boot-camp class taught by Robin Arzón. The class started with a seven-minute bike ride, then 13 minutes with dumbbells, and then back on the bike for 10. Twirling the screen toward my workout mat and weight bench made the process easier.

The hardest part was what Ms. Arzón called a “Mr. Rogers’s shoe change”—the cumbersome process of unclipping your cycling shoes, then changing into sneakers, then doing the reverse, while increasingly exhausted.

Peloton riders must wear cycling shoes. Putting them on, clipping them into the bike, then unclipping them again is an exercise routine of its own.



Photo:

Kimberly Stoll

Bigger front-facing speakers, integrated into the screen, are welcome for the aging among us, or those who simply like it loud like a real cycling studio. There’s also a camera embedded in the Bike+ screen with a “privacy slide” shutter.

A new Bike+ feature allows a rider to remotely lock the resistance setting into an instructor’s suggested level and avoid setting it manually. If Ms. Arzón yells out a setting in the 45%-to-55% range, the bike automatically sets my pace at 50%. Having this feature means I don’t have to pay constant attention and I don’t have to fiddle with the resistance dial. Unfortunately, it’s currently available only on archived classes, not live rides. And certain competitors already offered the feature.

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To be fair, much of what comes on a Peloton can be gotten from a few other bikes on the market. Among the small group of connected-bike competitors is NordicTrack’s $2,000 S22i Studio Cycle and Echelon’s $1,600 EX5S. They also employ a design far more sophisticated than the Coppertone-colored Schwinn Deluxe Exerciser my grandmother had in her bedroom.

(Schwinn does have a connected bike, too. It’s designed to work with Peloton’s lower-cost app for nonowners, which my colleague Nicole Nguyen recently covered.)

I’ve taken classes on various “connected” bikes, and most set a slightly lower bar than Peloton. This isn’t because they’re less challenging; it’s because nothing rivals Peloton instructors, who are as inspiring as they are intimidating. Ms. Arzón, for instance, is an attorney turned ultramarathoner and motivational guru. Others are national champion cyclists and fitness models.

Peloton also has the biggest, and possibly most engaged, community. The company boasts one million “connected fitness” subscribers, about 300,000 more than NordicTrack, for instance. Its nearly three dozen instructors teach live classes that can be attended by tens of thousands in real-time or via the archive.

Instructor Robin Arzón teaches a 30-minute cycling class, using the ‘Hamilton’ soundtrack as the playlist.



Photo:

Kimberly Stoll

The Peloton formula—hardware, classes and social interaction—leads to the thrill and adrenaline of a sport rather than the drudgery and isolation of working out at home.

My own stats—such as the record output pace I’ve set in the past—are always in front of me as a target to beat. Peloton’s leaderboard allows me to compete in real-time against thousands of other riders, segmenting down to people in my age group and gender if I want.

In Irene Scholz’ Sept. 22 intervals ride, for instance, I ranked 10,420 out of 16,814 riders—a placement I see as respectable since I’m mainly a swimmer. My rank among a smaller segment of riders—men in their 40s—was slightly more favorable.

This gamification of exercise, Mr. Cortese said, is “the most positively addictive behavior” on the planet. Is there anything unhealthy about having a nagging desire to get on the bike? Perhaps not, but is there anything cost effective about it?

The Bike+ can be financed for $64 a month. (The traditional model can go for $49 a month.) Add $39 for the connected membership, and I’m at $103 a month.

That’s $18 more than my Life Time Fitness gym membership—which includes more weights, bikes, treadmills, sauna benches and mouthwash than I could ever use, particularly since membership seems to have dwindled amid Covid-19. (For the record, I only use the 25-meter pool, the shower and the mouthwash.)

I talked to Peloton Chief Executive John Foley about the pricing breakdown and he told me to look at this as a family plan rather than an individual one. If my wife and I both worked out with it, the individual cost is $51.50 a month. If my kids also started using it regularly—slim chance though that may be—the per-workout cost could get down as low as $2.

This is an apparent bargain compared to my trips to the gym, which include driving 6 miles and competing for the pool’s lap lanes. I recently did the math on this membership: When I’m fully using it, I pay about $3.50 a visit. Or, if you want to be really specific, 10 cents per lap.

—For more WSJ Technology analysis, reviews, advice and headlines, sign up for our weekly newsletter.

Write to John D. Stoll at [email protected]

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Apple’s 5G iPhone Will Need to Be More Than 5G

Apple’s 5G iPhone Will Need to Be More Than 5G


Apple Inc.


AAPL 1.74%

is master of the upsell, but 5G might present the company with its biggest challenge yet.

The tech giant has scheduled an event for Oct. 13, when it is widely expected to unveil this year’s iPhone lineup. As is typical, the company has said nothing about its plans for what would be the 20th iteration of its iconic smartphone, not counting large-screen variants of the same models. But leaks and supplier reports all have confirmed that the next-generation 5G wireless standard will be included in at least some of this year’s designs, and Apple itself dubbed the event “Hi, Speed” on its announcement.

Nearly all of the company’s competitors—including the largest,

Samsung

—already have 5G phones on the market. But most of the world’s 5G action has been taking place in China, which accounted for more than three-quarters of 5G device shipments in the second quarter, according to Counterpoint Research. In the U.S., 5G coverage is still limited, even in major cities. That has hampered the uptake so far. IDC estimates that 4.2 million 5G smartphones were sold in the U.S. in the first half of this year—about 7.5% of total domestic smartphone shipments in that time.

Apple is widely expected to boost that. Counterpoint analyst Jeff Fieldhack predicts this year’s new iPhones will sharply increase the market share of 5G devices, resulting in such phones accounting for 20% of domestic smartphone sales by the end of the year. And several equity analysts have started redeploying the “supercycle” term used to predict strong iPhone cycles in the past—though not always accurately. Analysts project total iPhone unit sales will rise 10% in Apple’s current fiscal year ending next September, following two straight years of declines, according to consensus estimates from Visible Alpha.

That in turn has fueled Apple’s stock, which has jumped 59% so far this year even after retreating from its Sept. 1 peak. At more than 31 times forward earnings, the stock remains in its most expensive valuation range in more than a decade.

Is a 5G iPhone worth that? Probably not—if that is the only selling point. Past comparisons are problematic. The last major network transition to the current standard known as LTE took place in the 2010-12 time frame, when smartphones were still a fast-growing business globally. Apple’s first LTE device was the iPhone 5, which launched in late 2012. That device also sparked “supercycle” projections, though sales and the phone’s lower profit margins didn’t quite live up to the hype. Apple’s share price had surged 65% that year ahead of the iPhone 5 launch—and then slid 24% in the remainder of the year.

Smartphone buyers tend to be more motivated by improved features such as screen size, better cameras and longer battery life. The iPhone 6 cycle that kicked off in late 2014 turned out to be Apple’s best ever, thanks to the significant display-size boost that device delivered. And last year’s iPhone 11 Pro models with their triple-lens cameras turned out to be more popular than expected. Analysts believe those models accounted for 28% of Apple’s total iPhone sales volume for the fiscal year that ended in September, compared with the 23% for the previous year’s top-of-the-line iPhone models, according to Visible Alpha.

The success of last year’s iPhones is actually another challenge for this year’s, as smartphone buyers now tend to hold on to their devices for three to four years. Apple still has a strong base of fans willing to line up for whatever the company comes up with each year. Getting enough of them to justify a market value of $2 trillion will be a tall order.

Write to Dan Gallagher at [email protected]

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