All posts by Alison Meadows

About Alison Meadows

Alison Meadows has a PHD in Economic Trends in Modern Times and is a known writer who focuses on hedge fund investments. Meadows, her husband, and three kids live in Boston, where she grew up and attended college. Contact Alison at alison[at]businessdistrict.com

US Tourism Industry Hoping to Cash In With Visa Reform

Economy, , , ,

President Obama announced a strategy which he hopes will stimulate international tourism

US Tourist Site/Mount Rushmore

more in the direction of the United States;  the plan is to make the process of getting a tourist visa for potential visitors easier and quicker.

According to the United Nation’s World Tourism Organizations, there is expected to be at least one billion tourists from all over the world traveling this year. The problem is that very few of these tourists choose to visit the United States, often because obtaining a visa for a visit is an arduous, time-consuming and expensive undertaking.

Obama’s plan to streamline the acquisition of tourist visas could not come at a better time, since there is also expected to be an upsurge of touring Chinese and Brazilians, helping to more than offset an expected decline in tourism from Europe as a result of the difficult economic situation there.

“The fact that the president recognized the importance of international tourism is an incredibly positive move,” said Jim Evans, CEO of Brand USA, a public-private tourism promotion organization. “It definitely will have a very positive impact on hotel occupancies,” which in turn will boost profitability and growth in tourism-related jobs. “It just has a positive effect on all metrics for hospitality.”

Tourists for outside the country are a real boon to tourism. They spend their money on hotels, restaurants, go shopping, and pay all the taxes which these activities require. And when the go home, their money stays here.

But the United States has been steadily taking in less and less from this valuable market, even as the total number of tourists across the globe has been rising. In 2000 the US benefited from 17% of the international tourist trade, while in 2010 that percentage dropped to only 11%.

Obama announced his plan to change the procedure for obtaining tourist visas to the US at Orlando’s Walt Disney World last Thursday, believing this step, and others, can help reclaim some of the valuable market share of tourism.

“Just looking at the sheer numbers, it’s going to be huge,” said Kathleen Matthews, executive vice president of public affairs at Marriott International and member of the United States Travel and Tourism Advisory Board. “Reducing the wait time is going to be tremendous.”

Slow Growth Forecast for Kansas

Economy, , , ,
Jeremy Hill

An updated forecast predicts that the economy in Kansas is heading up in 2012, but not as quickly as what had first been expected.

According to the Center for Economic Development and Business Research at Wichita State University, the forecast for employment for the Wichita metropolitan area, as well as the state as a whole, will be lower than the previous outlook. The center says that slower national growth in general and lack of confidence in the local and global economy downgraded the forecast.

“This is due to the weakness within the euro zone, remaining uncertainty of the U.S. economy and expectations of the Boeing departure,” said Jeremy Hill, the center’s director.

The revised expectation is that the Kansas economy will grow slowly. The unemployment rate should improve by 1%, translating into 13.010 new jobs, down from the 1.1% original prediction which was made in October last year.

“The Kansas economy has been flat in 2011, showing almost no growth from 2010 to 2011,” Hill said. “However, farmers and farm income have been the stabilizing force in our economy.”

Although Kansas is indeed expected to have an upturn in its economy and unemployment figures, the growth is slower than originally forecast due in large measure to the news that Boeing, the aircraft manufacturer, will be closing its facility in the area.

Federal Reserve to Refrain from More Bond Buying

Economy, , , , ,

Two influential officials from the Federal Reserve announced on Friday that the central bank should wait before buying more bonds. In addition to cutting overnight interest rates down to nothing in December of 2008, the Federal Reserve also purchased $2.3 trillion worth of government and mortgage-related bonds to stimulate growth in response to the worst recession in dozens of years.

Economy Improving, Bond Buying Not Needed

The president of the Federal Reserve Bank in St. Louis, James Bullard told reporters after

James Bullard

a speech he gave in this Midwestern city that as long as the economy seems to be improving, the purchasing of more bonds should be postponed.

“The data has been stronger in recent weeks and months, and so I think there’s probably a good case to stand pat for now,” Bullard said.

“If the economy did deteriorate substantially in 2012, then I think (quantitative easing) would come back on the table, but that’s not where we are right now,” added Bullard, considered a centrist when it comes to policy debated by the Federal Reserve.

Upcoming Policy Meeting

The large variety of positions when it comes to Fed policy was apparent as the officials practiced their differing arguments in preparation for their upcoming policy meeting on January 24-25.

The aftermath of the meeting is expected to result in the announcement of more information about the direction interest rates will take in the near future, as well as an explicit number for an inflation target. It is not expected, however that the Feds will announce any new round of bond purchases.

Bond Buying on Hold, For Now

Some other Federal Reserve officials, including the influential president of the New York Fed, have hinted recently that additional bond buys might need to be considered sometime in the future, but for now Bullard’s position is probably the one which will be followed for now.

Eastern States Gambling on Casinos to Bring in Revenue

Economy, , , ,

In what is part of a trend that is growing in size and respectability throughout the eastern seaboard, New York Governor Andrew Cuomo announced last week that he has plans to transform Aqueduct Racetrack into a mega tourism/gambling/casino complex.

Baby Steps

Aqueduct Racino

Last October New York took its first baby steps into the world of casino gambling when a “racino” with limited facilities opened at Aqueduct. Even with just 4,500 video slot machines and only 500 electronic table games, the racino was able to earn $13 million just last week, which translates into $676 million a year. New York State’s cut is 44%, going straight to a fund for education.

Cuomo’s new proposal, however, dwarfs what Aqueduct offers gamblers now. Working together with the Genting Group, one of the world’s largest and most profitable gambling companies and the company which built and operates Aqueduct’s racino, Cuomo plans on creating the nation’s largest convention center, hotels with 3,000 rooms, and a major expansion of the casino.

Eastern States Getting in on the Action

The plan comes fast on the heels of a law passed two months ago in Massachusetts, once known for its puritanical, anti-gambling values, which will permit the establishment of three resort casino and a slot machine parlor, at several locations around the state.

Ohio also has plans to open its first ever commercial casinos this year after voters in 2009 approved a plan to build up to four such complexes. Maryland’s first of several casinos opened this year, while Pennsylvania has been operating its own casinos since 2006, which are threatening to overtake Atlantic City’s casinos as the country’s second most popular venue for gambling.

Florida is now in the midst of a legislative debate on whether to allow up to three multi-billion dollar casinos, and whether to permit more slot machines at Florida’s dog tracks. Genting believes the Florida law will pass, spending about $450 million on waterfront property purchases in Miami, where it hopes to build a $3.8 billion complex.  The facility would include a casino, restaurants and a shopping mall.

Its All About the Money

After years of rejecting gambling due to the fears of the danger to society, states have begun to accept gambling for two main reasons: gambling is a seemingly abundant source of revenue; plus casinos have the potential of stimulating tourism.

“They are faced with tough decisions. They are in recession … And we pay taxes far over and above normal taxes,” said Frank Fahrenkopf, president of the American Gaming Association.

Compared to what Genting estimates they can make if the Miami complex comes to fruition, the total that the Aqueduct racino brings in is miniscule. Genting is guessing that they can bring in $1.4 to $2 billion each year in Miami, if they get their way.

Super Bowl Ads Heading for Touchdown

Communications, Economy, , ,

Apparently “You get what you pay for” is as true for Super Bowl advertising as it is for other purchases; at least marketing experts believe it. Take for instance the fact that despite asking record fees for ads at last year’s Super Bowl XLV, all the ad space was sold. And the same phenomenon is happening this year for Super Bowl XLVI.

Part of Super Sunday

Super Bowl XLVI

Experts are saying that next month’s Super Bowl will most likely surpass the take for last year’s, and next year will do better than this year. Companies and their marketing agents strongly believe, to the tune of millions of dollars, that it is an honor and a privilege to be a part of Super Sunday.

Profitable, Too

But it’s not just a privilege; its lucrative as well, say experts such as Brian Steinberg, the television editor for Advertising Age. “It’s a huge investments but it’s also one of the best ways to maximize their time. Fewer TV properties have that reach thanks to DVR and the Web. The Super Bowl is increasing, rather than losing, its audience.”

And as long as that audience continues to drink, snack and continue to watch TV, there is no end in sight to the money that can be made at the Super Bowl.

Sold Out

NBC is the network which will be broadcasting the game on February 5th, from Indianapolis. NBC has already announced that there is no more time left for ads during the game itself, but there are still a few spots left during the pre-game show. Despite the fact that NBC has not publicly disclosed how much each spot costs, the Associated Press estimates the charge to advertisers is somewhere between $3.5 million and $4 million for each 30 second time slot. Just 20 years before a half-minute cost advertisers only $1 million or less.

BIG Audience

That amount of money, however, buys the ad-men the largest TV audience in the United States all year. Last year’s figure was 111 million Americans who were glued to the game, many of whom watched with fascination the tens of commercials which were broadcast during the time-outs and other game breaks.

“There’s nothing to compare it to. Maybe the Oscars or some of the music (awards) shows, but not really,” said Stephen Master, head of sports for Nielsen, which tracks viewership.

“The Super Bowl works for different kinds of companies. It’s a wonderful venue for companies with a new product since it builds brand awareness so quickly. But it also allows the ability to rebuild or to recast a brand,” said Tim Calkins, professor of marketing at Northwestern University.