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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
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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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The Future Of Flying Is Closer Than Ever-Sustainable Fuel Is The Key


By Lauren Uppink, Head of Aviation, Travel and Tourism, World Economic Forum

The Covid-19 pandemic has caused a drastic reduction in air travel, leaving many airlines facing an uncertain future. It might be tempting to assume that once air travel resumes, it would be business as usual as the airline industry focuses on a return to profitability over commitments to achieve net-zero emissions . But as Grazia Vittadini, Chief Technology Officer at Airbus,  recently stated, pursuing one at the expense of the other “is a false choice.”

At pre-pandemic levels, aviation was responsible for 2-3% of overall global emissions, and current forecasts from the International Air Transport Association (IATA) anticipate significant growth in air travel throughout the 2020s. In addition, as the world looks to build back better, a growing proportion of airline passengers will be millennials who are likely to book with sustainable brands with which their values align.

To drive a sustainable, long-term recovery in the aviation industry, facilitating the transition to net-zero flying by the middle of this century remains a priority across aviation’s value chain. Achieving net-zero CO2 emissions by 2050 will not only help create an environmentally sustainable future but also ensure a financially resilient and competitive aviation industry as a whole.

How to achieve net-zero flying

The use of sustainable aviation fuel (SAF) – fuel either made from biogenic feedstocks such as waste cooking oil, agricultural residues and municipal waste, or through next generation SAF technologies such as power-to-liquid from recycled CO2 and carbon-capture technologies – will play an indispensable part in achieving this transition.

SAF is especially relevant for addressing carbon emissions from long-haul flights and has the distinct financial advantage of not requiring any major new equipment or infrastructure investment, since it can be blended with conventional jet fuel. Given the long lead time for new propulsion technologies like hydrogen and electric to come to market, SAF is a way to make substantial progress on net zero immediately, for both long and short haul aviation.

SAF that is currently commercially available can reduce GHG emissions by up to 80% on a life-cycle emissions basis  as compared to fossil fuels, offering airlines a way to become greener while continuing to fly. The problem of wider adoption is two-fold: the cost and current limited supply of SAF. Today’s commercial production of SAF is only approximately 0.05% of total EU jet fuel consumption – and the current pace of growth is nowhere near what it should be to meet global climate objectives.

To help support the development and use of SAF, the World Economic Forum’s Clean Skies for Tomorrow (CST) initiative created the Sustainable Aviation Fuel Certificate (SAFc) system to serve as an accounting tool that will allow SAF emissions reductions to be claimed by the traveler if they cover the higher cost of the fuel. In other words, corporations will be able to pay extra for sustainable aviation fuel certificates against their chosen routes, boosting demand for SAF and unlocking additional funding sources to stimulate this nascent industry. Instead of buying offsets, the SAFc framework provides customers with the option to invest directly into SAF and furthermore receive recognition for this purchase to prove Scope 3 carbon abatement for their corporations.

Commitments to net-zero emissions

International aviation and shipping are unique in that they were excluded from national carbon budgets under the Paris Agreement. Instead, Parties were requested to work through the international regulators to reduce emissions from these sectors. Before the COVID-19 pandemic, traction was slow with governments and industry alike in the will or commitment to a net-zero by 2050 target for the sector. That being said, the industry were already aligned around environmental targets, including to achieve carbon-neutral growth from 2020 and by 2050 to have halved carbon emissions from aviation against 2005 levels. In 2019 ambitious leaders in the sector joined the Clean Skies for Tomorrow Coalition as a crucial mechanism through which actors across the value chain could collaborate to advance efforts towards net-zero flying.

Being an industry with low profit margins to begin with, it is promising to see airlines emerge from the Covid-19 pandemic with the recognition of the false choice between longer-term profitability and sustainability. Over the last year we have witnessed this in the many commitments to net-zero that have come to pass.

In September 2020, oneworld – which includes American Airlines, British Airways and Cathay Pacific Airways – announced that all 13 of its member airlines have committed to net-zero emissions by 2050, becoming the first global airline alliance to unite behind a common target to achieve carbon neutrality. The airlines said they will develop individual approaches to reach the net-zero target by 2050, through a mix of various initiatives such as efficiency measures, investments in SAF and more fuel-efficient aircraft, reduction of waste and single-use plastics, and carbon offsets, among other measures.

This was followed in February by Europe’s aviation sector unveiling its flagship sustainability initiative Destination 2050 – which lays out a route to reduce CO2 emissions from all flights within and departing from the EU by 45% by 2030, reaching net-zero emissions by 2050. This document is backed by major European flight industry associations, covering airports (ACI EUROPE), airlines (A4E), aerospace and defense (ASD Europe), air traffic control (CANSO), and regional airlines (ERA).

In March 2021, Airlines for America, the industry trade organization representing the leading US airlines, announced the commitment of its member carriers to work across the aviation industry and with government leaders to achieve net-zero carbon emissions by 2050. In April, British Airways-owner International Airlines Group announced the first SAF commitment, to ensure SAF accounts for 10% of their fuel usage in 2030. They plan to achieve this by investing US$400 million into SAF development in the next 20 years and purchasing one million tons of sustainable fuel on an annual basis. .

And just recently, Airports Council International (ACI) World and their five ACI regions adopted a long-term carbon goal for their member airports.  ACI EUROPE not only reaffirmed the commitment of 235 airports to net zero by 2050 but also significantly raised ambitions with 91 airports run by 16 operators, being set to deliver on their net-zero commitment already by 2030.

On the consumer side, there are growing commitments from multinational corporations to fly on airlines using SAF. In October, Alaska Airlines and Microsoft signed a partnership agreement to reduce carbon emissions via flights powered by sustainable aviation fuel on key routes, while in February Deloitte struck agreements with Delta Air Lines and American Airlines to buy flights using SAF as part of its efforts to reduce emissions. Agreements like this enable corporations to help carry the extra cost of SAF to the airlines and the SAFc accounting framework is designed to facilitate, incentivize and standardize these transactions to ensure they are environmentally credible and result in additional sources of funding to rapidly accelerate SAF production and use

One of the goals for COP26 is to rally the aviation fuel value chain behind a 10% SAF by 2030 ambition. Tools such as SAFc, coalitions of the willing and ambitious commitments from airlines themselves offer a promising way forward.



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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
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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
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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
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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
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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
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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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Dow Futures Are Softer Amid a Fed and Treasury Clash


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