Return to Transcripts main page
Quest Means Business
U.S. Finds Saudi Crown Prince Responsible for Khashoggi Murder; Stimulus and Vaccinations Poised to Supercharge U.S. Economy; Qantas CEO Says Vaccinations Only Viable Way to Boost International Travel; Investors Buy Into Airbnb's Optimism For Future Travel; South Africa's Renewable Energy: Empowering Local Communities To Run With The Wind; Real-Life, Non- Fiction Streaming Finds Its Audience. Aired 3-4p ET.
Aired February 26, 2021 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:14]
RICHARD QUEST, CNN BUSINESS ANCHOR: Last day of the week, trading -- and it's been all over the place. Five hundred-point swing for the Dow, it is
still off the lows. Look at the markets and you'll see.
We're down 269 points, but really the devil is in the detail on this one because a lot of tech stocks are up. So the market is bifurcated today.
That is the way markets are looking and these are the rents of day.
The White House alleges it was Saudi Arabia's Crown Prince behind the death of Jamal Khashoggi.
Fears of inflation. Investors hitting the sell button. The President of Philly Fed on what message he is getting from what the market is saying.
And a year of rebound for international travel. Tonight, you're going to hear from the Chief Executives of Qantas and Airbnb.
It is Friday. We are live in New York on the 26th on February. The month's nearly over. I'm Richard Quest, and I mean business.
Good evening, tonight, the United States has blamed the murder of the journalist, Jamal Khashoggi squarely on Saudi Arabia's Crown Prince. An
Intelligence report just released says Mohammed Bin Salman approved an operation that led to Khashoggi's gruesome killing back in 2018.
There are consequences, the State Department has announced visa restrictions on 76 Saudi nationals. And Janet Yellen's Treasury Department
has ordered sanctions on members of the Prince's elite Tiger Squad.
But, of course, it's the relationship at the national level and indeed, at the level -- at the leadership level that is of most focus. Nic Robertson
is in London, John Harwood is in Washington.
Nic Robertson, I'll start with you. This two-page report is the truth that everybody has said, but now there is a piece of paper from the U.S.
government that specifically says it was the Crown Prince that ordered it.
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: There is. But what this piece of paper doesn't have is a smoking gun. It does say pretty much
what the C.I.A. had concluded before that, Bin Salman's hand was on this operation.
The C.I.A. concluded that he personally ordered it. This says based on the fact that he is essentially the whole power in the government, that it was
one of his top aides involved in the operation, that it was his own close security detail who were involved in the operation, that all of these
things and a history of tolerating violence to silence dissidents like Khashoggi, all of this points towards it.
But it isn't a smoking gun, and I think that's the key here to understanding how the United States at least at the leadership level gets
on with the leadership level in Saudi Arabia, and the relationship keeps going.
QUEST: But Nic, how do you say it's not a smoking gun when they basically said he did it?
ROBERTSON: They don't have the evidence of a phone call that they're presenting here. Look, what the Turkish Intelligence authorities had from
their bug inside the Saudi Consulate where the murder happened were the conversations before talking about a sacrificial lamb arriving, were the
sound of a bone saw, were the sounds of a man gasping for his last breath and realizing that he was about to be killed, essentially being told that
he need to come back to Saudi Arabia or face the consequences.
There isn't anything that builds on that that says a phone call was made from the Consulate to the Crown Prince or somebody saying, and the Crown
Prince will be happy. If that evidence exists, it hasn't been made public - - that would have been a smoking gun that would have been so hard for people to ignore.
The Crown Prince is the effective day-to-day ruler of Saudi Arabia, and it won't be long before he becomes King. If not Biden, then another American
President will be facing him across the table at a Summit in the not so distant future.
QUEST: And that's the problem, John Harwood, for President Biden. He spoke with the King, but the King is the King essentially in name only.
So how -- listen to what Biden said on this event -- on this murder a couple of years ago. Listen to this and then square the circle for me, John
Harwood. Hang on a second.
[15:05:05]
(BEGIN VIDEO CLIP)
JOE BIDEN (D), THEN U.S. PRESIDENTIAL CANDIDATE: I would make it very clear, we were not going to in fact sell more weapons to them. We were
going to in fact make them pay the price and make them in fact the pariah that they are.
There's very little social redeeming value in the present government in Saudi Arabia. And I would also, as pointed out, I would end subsidies that
we have, end the sale of material to the Saudis where they're going in and murdering children and they're murdering innocent people, and so they have
to be held accountable.
(END VIDEO CLIP)
QUEST: Right, John Harwood. I know the reality of politics, but how does Biden -- how does the President get out of that?
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Well, I think what he is doing is balancing a complex set of interests. Obviously, Saudi Arabia is
an ally of the United States in the fight against counterterrorism, as a counterweight to Iran who is a U.S. adversary.
The Biden administration has, however, halted the sale of offensive weapons to the Saudis that were being used in the Civil War in Yemen, so they're
taking some actions. The question is, how long they are -- how extensive they're going to get from here.
Joe Biden was dealing with the King rather than MBS because he wanted to -- pending the release of this report, he didn't want to have a conversation
with somebody whose government was about to be accused of complicity in a murder.
And I do think that the release of this piece of paper does have the effect at some level of making MBS a kind of pariah even if he is eventually going
to be the King. Remember, MBS himself said a year or two ago, well, nobody has ever said anything publicly about me being involved. Now, the U.S.
government has said it publicly. That itself a form of sanction as is the particular sanctions against security officials and the Tiger Squad and
others that you mentioned.
QUEST: Nic Robertson, look at the list of companies that are back at the Desert Summit, like Davos in the Desert. They're all back.
They all came in October -- SoftBank, Blackstone, Goldman, HSBC having refused in previous years. It's business as normal for the Saudis.
ROBERTSON: Yes, and let me be really frank here, Richard, and relate you a frank conversation I had with somebody I speak to in Saudi Arabia who is
informed on this sort of thing.
Go back to 2017 when the Crown Prince rounded up all of those princes and businessmen and essentially shook them down. We all saw it as a power grab.
He saw it as an anti-corruption drive.
But they knew, he knew, his advisers knew that that was going to scare away businesses and investment, and it did dry up the sort of Davos in the
Desert immediately after, but people came back.
The conversations that I've had with people in Saudi Arabia leave me with a very clear understanding that they knew that that would be an impact on
immediate investment, but they didn't care because they believed it was important enough to get rid of what they saw as a corruption, we see it as
a power grab by the Crown Prince.
And therefore he has a vision, and that's the vision he is going in, the direction he is going in. The 2030 vision. He needs investors. He knew and
believed they would come back.
Why? Because Saudi Arabia has the money that they want, you know, to make for their businesses. It's money, Richard. You know that by its very
nature. You know it way better than I do.
QUEST: And John Harwood, in a sentence or two, it's that money -- it's that money that will eventually get the White House to bury this report in
the bottom of a drawer and continue.
HARWOOD: Well, there is going to be a difference, however, between the Biden administration and the Trump administration. The Trump administration
was focused almost exclusively on commercial relations with Saudi Arabia, with China and others at the expense of human rights.
Joe Biden is going to try to do both at the same time. He's not going to rupture the relationship, but he is going to make the U.S. government's
values clear in this situation.
QUEST: John, Nick, thank you both. Have a good weekend.
U.S. stocks have been swinging all over the place this morning as higher bond rates continue to unsettle equities. Now, look at the triple stack,
and the NASDAQ has been all over the place. It was down and it is now settled in the green. The Big Board is down and it stayed down, but it is
off the low number.
U.S. lawmakers are moving forward with the President's $1.9 trillion stimulus package. The House is voting to pass the -- and it'll pass along
party lines. It'll get past the House, however, the Senate will be a much different affair.
The combination of new Federal spending and widespread vaccinations is leading to the possibility of super charging economic growth this year.
[15:10:10]
QUEST: Just look at the sort of things we're talking about. Personal income is already up 10 percent in January, thanks to the last round of
stimulus checks, and there is more coming if the stimulus plan is passed.
The next bill would send to $1,400.00 to people making less than $75,000.00 a year. Increased Federal unemployment benefits by $400.00 a week for a
considerably longer period and that would last until late August, but it is unlikely that the minimum wage will get through.
President Patrick Harker is President of the Philadelphia Fed joins us now.
President, good to see you, sir. Thank you. And I just wonder when we -- the markets -- and this isn't just sort of the markets are up, the dollar
is up, the bonds are down or whatever.
The markets are sending a message. The bond market is sending a message. What are you hearing from that message?
PATRICK HARKER, PRESIDENT, PHILADELPHIA FEDERAL RESERVE: So, again, I look through -- I need to look through any given day and any given movement in
the market, the medium to longer term trends.
I do think the market is sending a signal in our world that they are expecting higher inflation at some point. We don't see that right now. We
don't see inflation running out of control, but we do want inflation to rise above our two percent target. That's our new monetary policy
framework.
So the fact that we see inflation rising, but still under control is a good sign, not a bad sign.
QUEST: In that -- you are fine tuning inflation with a bulldozer and a blunder buster of a weapon which is this vast stimulus package, which some
reputable economists think is too much, others think it's not enough. Where do you stand on the $1.9 trillion?
HARKER: So that is in the hands of the administration and Congress. I can tell you what we are assuming as opposed to what we want.
In our forecast going forward, we're looking at growth in the first half of this year a little above three percent. In the second half of the year
above five percent average in the four-ish range, and that's a good outcome. And we're assuming in that forecast a $900 billion stimulus
package especially that it is designated and really targeted to people who need the money the most.
So, again, I'll leave it in the hands of Congress and the administration about what that package is, but we do need some stimulus right now. We're
assuming around $900 billion.
QUEST: Nine hundred billion, now, listen to what Christine Lagarde told me last week, the President of the E.C.B., on this relationship between
monetary and fiscal. This is President Lagarde.
(BEGIN VIDEO CLIP)
CHRISTINE LAGARDE, PRESIDENT, EUROPEAN CENTRAL BANK: Fiscal and monetary did not work so well together back in 2008 or 2011 in Europe, and very
often, you heard the Central Bank Governors saying, you know, it cannot just be about monetary bank policy. We are not the only game in town.
You don't hear that anymore, because both on the fiscal front and on the monetary front, policies are working hand in hand and are really laying the
ground for recovery to take hold after we are done with that period where economies have switched off.
(END VIDEO CLIP)
QUEST: Now, Chair Powell said on numerous occasions last year to the fiscal side that more needs to be done by that side. Are you happy -- or
happy is a strong word, but you know what I mean -- for bankers, for monetary, are you content with the environment now between monetary and
fiscal?
HARKER: So, I think there's a set of short run issues, again, we need to get through this pandemic. We need to get the vaccines into arms. We need
to do what we can, and in my view, change -- the fewest things we can right now, so that we can get through this period.
As we start to climb out of this pandemic, the goal is to get back to where we were before the pandemic. That's very hard for people to remember, but
we had a very good labor market, we had a good economy going. We need to get back to that, but frankly, better than we were before, especially for
those who were left behind in the recovery from the great recession.
So, yes, I think things are working okay right now. There are a lot of longer term issues we need to address in particular to try to close the
opportunity gaps that exist for workers in America.
QUEST: How can you do that? I worry, this opportunity gap, you've got your new occupational mobility explorer to try and match people up, but there
are some reports that suggest unemployment by year's end could be back down again at four percent if this economy roars ahead as expected.
Now, if that's the case, Mr. President, then you've got full employment.
HARKER: So we are looking at unemployment probably a little more than five percent. That's our forecast right now. To some, you're right, have it at
four percent.
[15:15:10]
HARKER: But again, go back to where we were before the recession. Even though the economy was good, there were lots of people left behind and the
wealth and income gap kept growing.
We know that over time, if that gap gets wider and wider and wider, economies slow down. You see this throughout economic history. You see this
in the worst case when there's this great disparity between the rich and the poor.
So we need to help people get those jobs, upskill those jobs and get rid of the barriers because there are lots of barriers beyond skills.
Low opportunity does not mean low skill. There are other reasons, you know, housing, transportation, child care, that really inhibit people getting the
kind of job they need to sustain themselves and their family. That's what this opportunity of occupational mobility explore is all about.
QUEST: The problem is as we went into COVID, we were only just starting to grapple with the potential -- you've seen the reports, up to 40 percent of
the blue collar workforce could be out of a job as a result of AI and technological changes.
Now, that risk hasn't gone away, and I question the ability of policy makers to not only go back to deal with that, but also the enhanced risk
post-COVID.
HARKER: So our job at the Fed in addition to monetary policy to our community development function is really to lay out the facts, right, to
lay out the opportunities and the problems as we see them.
So you're right. There are a lot of jobs that are going to go away. But there are new jobs being created each and every day. I'll give you one
example. We saw this before the pandemic, we even see it now. And this is part of this occupational mobility explore and you can go in there and see
by 33 Metro areas in the country where the jobs are, where you can upskill and what kind of salary increase you would see.
Let me just give you two quick examples.
Say you're in Cleveland and you're a maintenance worker, you could upskill into a truck mechanic or an HVAC mechanic and you'd see an average increase
in salary of 22 percent.
Or say you're a bill collector in Philadelphia, with some training you could become a credit counselor and there are jobs in credit counseling
with an average increase in salary of 45 percent.
So both in the blue collar and white collar realms, there are opportunities for people to get better jobs, life sustaining, family sustaining jobs.
QUEST: President Harker, thank you, sir. Have a good weekend and keep well. We'll talk again as the year moves on because this is a fascinating
aspect, this idea of job mobility and occupational training.
As we continue on QUEST MEANS BUSINESS, the Chief Executive, Alan Joyce, Chief Executive of Qantas tells me vaccinations are crucial to kick
starting global travel, and he expects vaccination certificates of one sort or another, digital probably, will be required in the longer term future.
The Qantas CEO after the break.
(COMMERCIAL BREAK)
[15:20:35]
QUEST: In tonight's program, we are looking at the recovery that is taking place or will take place in the travel and tourism industry, and the Chief
Executive of Qantas, Alan Joyce has told me, vaccinations are the only way forward for the travel industry.
After a brutal 20, there are already new signs of life in the sector. For instance Airbnb says it is aiming for significant travel rebound this year.
The Chief Executive will be with me in a moment or two.
And in Europe, there's extra confidence from Angela Merkel who expects vaccine passports by this summer. And then there's Qantas, Australia's
national carrier, a later timeline, it want to start Qantas International travel by October.
Now, that's the part of the airline that flies internationally as opposed to just within Australia.
Remember Australia's borders are currently closed, though expected to open later in the year. I spoke to Alan Joyce and asked him how likely it is to
hit that target of October.
(BEGIN VIDEOTAPE)
ALAN JOYCE, CHIEF EXECUTIVE, QANTAS: We think it's very realistic. We are in a population where the adult population in Australia will be fully
vaccinated by the end of October and we should have herd immunity by that stage.
And we think that once we get to that stage with the vulnerable people being vaccinated, the vast bulk of the population being vaccinated, there's
no reason not to open our international borders.
Our international borders are being completely locked down for now for nearly a year, and this is the time I think people will be wanting it to be
released, people's freedoms to be given back to them.
It's still a federal government decision and they are still waiting for some information about whether the virus, the vaccine stops transmission,
whether these new variants of the virus are going to cause a problem with the vaccination or if the data that's going out all holds, we think that's
a valid assumption.
QUEST: Is that your intention at the moment to require vaccination or proof of vaccination or a negative test? Or is it going to be just you have
to be vaccinated.
JOYCE: I think it's more likely to be you have to be vaccinated. And I think the governments are going to probably have procedures on this one, I
think a lot of governments are going to say, to get into the country, it's either that or a hotel quarantine.
We know hotel quarantine has limed amount of spaces. Australia has been operating that for some time. We don't have enough spaces to even get the
Aussies home, let alone have in tourists or the business traffic going in.
Vaccination is the only viable way at the scale of operation in place. And I think what's likely to occur there, is airlines like ourselves, we are
the safest airline in the world, we've been voted that for a number of years, will also have a duty of care to its people and to its customers.
So, we are working through the policies. There will be some exemptions in our people beyond efficiency in how we allow them to travel without
vaccination and other requirements that will be the case, but the bulk of travelers will be asked, I think by the countries to show that they have
been vaccinated before they're given entry. And it will be like a visa requirement getting into some countries.
QUEST: Project Sunrise, to a certain extent, the destination is London and Sydney, still makes sense. It's still one of your most important routes.
And I suppose as traffic comes back, then that comes back, too.
JOYCE: Absolutely. And we think probably in a post-COVID world, the demand for those types of services will be greater. People will want to fly direct
into those destinations rather than stopping over.
And so Project Sunrise, Richard, your viewers would know is our ability to have the largest sectors flying from Sydney to London 21 hours in the air,
Sydney to New York, 19 hours, and we had have a lot of destinations which is unique to Qantas because Australia is so far away from everywhere, so we
can just fly a significant fleet.
QUEST: I was talking to a much, much smaller operation, but you'll know of course the CEO of Rwanda Air. She said they took the opportunity, much
smaller but to do control-alt-delete.
At the moment when the airline wasn't flying and they were able to go root and branch through the entire airline and see what worked, what didn't?
What needed to be changed? What future -- did you do that at Qantas?
[15:25:17]
JOYCE: We did. We had to because to recover from COVID-19, you're going to need to be a lot meaner, leaner and be able to survive and build back the
damage that's been done to the balance sheet.
So unfortunately, we've had to make 8.5 less of our 30,000 work force redundant. We have had to do things like outsource or ground handling,
which give us 40 percent saving, $100 million a year. We've had to look at which fleets we keep and we've retired the 747s earlier than we had
planned.
We had to look at how we do technology. We're changing completely our technology. We've looked at our distribution. We've deals now with the 12
largest travel agents here to change the distribution model using the NDC that IATA has been promoting, a change in their remuneration around them.
That's got my tongue around that one.
One of the things we have to harness how to do that, that's generated a billion dollars in savings on a cost base coming out of this, which will
allow us to repair the balance sheet and allow us to buy aircraft like the aircraft we need to buy for Project Sunrise, the fleet replacement aircraft
that we need, the growth aircraft that we need.
So yes, that was absolutely needed. A lot of airlines I think have had to do that, and we've been fairly focused when we started the airline, a lot
leaner than it was than when it went into COVID-19.
QUEST: Finally, you know, you made news of the flight to nowhere. People love that. And you made news -- I mean, brilliant. You sold off the stuff
you didn't need. All of those first class galleys and all that stuff, you sold off the stuff that you didn't need, and everybody bought it. Were you
surprised?
JOYCE: No, we talk about Qantas being this iconic brand. It is the most recognized brand, the most talked about brand in Australia, I think
worldwide, it is in that similar category. People, when you see the kangaroo know what the company is.
And I was pleasantly surprised that we actually generated a million dollars selling 747 carts. I for one, I got one at home. They are talking points.
If you want one, Richard, I have a spare one that I can sell to you and they are very good. They're talking points for your guests at dinner
parties.
I'm sure you'll dress up in a cabin crew uniform and serve drinks which will be pretty good. But we also see this interest all the time. Anytime
Qantas launches a new route, a new initiative. We've launched 26 new routes. We've had to change a lot of things that we were doing before
COVID-19. We have to be very entrepreneurial.
(END VIDEOTAPE)
QUEST: I fully intend to take Alan up when we can get that cart and we can go down and pick it up in Australia. I am going to take it from him, I'll
pay for it, of course, a good donation to charity and we will use it here on QUEST MEANS BUSINESS.
In a moment, we speak to another major player in the travel industry, the CEO of Airbnb whose optimism is convincing investors the share price having
lost earlier in the week has soared right back.
(COMMERCIAL BREAK)
[15:30:00]
QUEST: Hello, I'm Richard Quest. A lot more QUEST MEANS BUSINESS as we continue this Friday.
Airbnb's chief executive explains why it continues to be optimistic about travel rebounding this year.
And the CEO of Discovery tells me his new streaming service plans to stand out in a crowded market. We'll ask him how, why, at what price?
It'll all come in a moment or two after we've given you the news. Because this is CNN and, on this network, the news always comes first.
The United States is imposing sanctions on an elite Saudi force and visa restrictions on 76 Saudi nationals over the killing of the journalist,
Jamal Khashoggi.
A U.S. intelligence report released this afternoon finds that Saudi crown prince Mohammed bin Salman approved an operation that led to Khashoggi's
gruesome murder in 2018.
President Biden's in Texas visiting a state battered by winter storms and power outages. The state's Republican governor is joining the president in
Houston. The president's also scheduled to speak at a mass vaccination site.
The head of the United States Centers for Disease Control warns that the recent decline in COVID-19 cases in the U.S. may be stalling.
Dr. Rochelle Walensky says the shift may indicate that new highly transmissible variants are beginning to take hold. And she said now is not
the time for individual states to relax restrictions.
Gunmen in Nigeria have abducted more than 300 schoolgirls in the northwestern state of Zamfara on Friday. The latest in a string of wide-
scale kidnappings in the country's recent history.
The Nigerian president Buhari says the abductions won't stand but his government has struggled to handle similar crises in the past.
After weathering a brutal year for travel, Airbnb is predicting a big rebound this year. The shares are soaring despite reporting a nearly $4
billion fourth quarter loss.
It says more than half of that is tied to going public in December, all to do with option and share values and things like that.
Investors are buying into Airbnb's optimism. The stock is up about 50 percent so far this year. It went public, of course, just at the end of
last year.
Airbnb's chief executive, Brian Cheeky, is with me from San Francisco. Brian, it is good to see you. Thank you, sir --
BRIAN CHESKY, CEO, AIRBNB: Good to see you.
QUEST: -- for taking the time. I'll be honest, when I saw your numbers I was surprised that down 30 percent, down 22 percent just in Q4. I thought
you'd be clobbered and hammered much like the airlines 50 and 60 percent, 70 percent. What happened?
CHESKY: Yes. What happened is that our revenue was down about 30 percent last year but, as you said, a lot of travel comes around 50 percent or 60
percent.
And the reason why is this. Business travel was hit really hard last year and people aren't traveling for business. People aren't getting on planes
very frequently, they're not crossing borders but they are doing some things that benefitted Airbnb.
People are getting in cars. They're driving about a tank of gas to small towns and small cities and rural communities, they're staying in Airbnb's.
[15:35:00]
Because after a year of lockdown, a lot of people were saying I want to get out of the house and I want to be people -- my friends and family.
And so that's why we were able to, I think, outperform a lot of other people in the sector.
QUEST: The share price -- I know CEOs hate talking about the share price, they hate talking about it when it's going down and they refuse to talk
about it when it's going up.
But we look at your share price and people say it's what the market will bear but the swings and the valuations are high. Your thoughts.
CHESKY: I think that things are going to be probably -- the market's going to be a little bit volatile, I think, for any new public company. I think
people are still feeling out the company; there's not as much information.
But I think that people hopefully can take some comfort in like a few things that we've learned. The first thing is that people -- Americans,
really, especially, want to travel. Travel is the out of home activity people miss the most.
It's a big motivation for people getting vaccines, actually, is they want to be able to travel.
And the kind of travel they miss is not business travel, it's not mass travel standing in front of landmarks or crowded destinations, it's being
together with people they care about.
And so yes, the reason a lot of CEOs like me, it's hard to talk about stock prices, is because it will go up on a Thursday, it might go down on a
Friday or go up on a Monday. And I tell our own employees we have to focus on things we can control.
And what we can control is making sure that we are ready this season for what we think could be a really meaningful travel rebound.
QUEST: How much repair work do you think you have to do with your hosts who felt bruised by the refund policy last year?
Now, look, your model is classic. You need the hosts and you need the guests. The perception last year was that you weighted towards the guest
with the refund policy.
CHESKY: Yes. We want to be fair to both guests and hosts.
Last year, a pandemic was declared and we had guests who had more than $1 billion of reservations that they wanted to be able to cancel because they
said they didn't feel safe traveling or they were being advised not to travel, they weren't even allowed cross borders.
We decided to make a decision with health and safety to be able to give people refunds because we didn't want them to feel like they had to travel
otherwise they -- because they couldn't get their money back and put themselves in harm's way.
That decision, we think was the right decision but the way we communicated it, I think we could have communicated it much better for our hosts.
We spent the last eight, nine months working really, really hard with our relationship (inaudible) hosts. We set up an endowment where we took 9
million shares of company stock, we put into a host endowment.
That endowment's worth about $2 billion, nearly $2 billion today and this endowment will go to support the host community.
We allowed hosts to participate in the IPO. As you can imagine, because of the stock price a number have done really well.
We're now doing a global campaign, the first in five years, that's honoring hosts.
So I (inaudible) say we could do better, we're always trying to do better and we're not going to stop until the distance between us and our hosts,
you can't even see any distance.
QUEST: I think you're widely quoted as saying that Airbnb has become a verb and, therefore, by definition you don't need to advertise as much.
CHESKY: That's right.
QUEST: There's not a traveler on the planet that hasn't heard of you.
But it begs the question on two fronts. Firstly, the competition eating your existing lunch; and secondly, where you grow. If business travel -- is
it the idea of travel -- for business for people who want to go and live overseas and still continue to work, the staycationers, if you like. Where
do you grow?
CHESKY: Oh, there's so many opportunities. So what's happening now is because of technologies like Zoom, I think everyone's now realizing many of
us can work from home and we can live with more flexibility.
And if you can work from home a lot of people are realizing actually I can work from any home on Airbnb. So people aren't just using Airbnb to travel,
people are not just traveling on Airbnb, people are now living on Airbnb.
So we're having a lot of people book one-week reservations, one-month reservations, multiple reservations. People in cold destinations are snow-
birding where they're going somewhere warm in the winter.
You have people that are getting home together with their friends and family and just living. There's a lot of new cases that are emerging.
In addition to the fact that because people aren't traveling for business, many people are home more often, we think they're going to want to travel
even more for leisure.
So we think there's going to be a mixture from business travel to leisure travel. And it'll be less mass tourism, it's going to be more people
staying kind of everywhere.
QUEST: Right.
CHESKY: It goes from a few cities to people traveling everywhere. It's a bit leveling of the playing field.
I think that means we can grow in 100,000 communities in the world. And because there's new living on Airbnb in addition to traveling in Airbnb,
you can see many axes we can grow. Length of stay, geography --
QUEST: So --
CHESKY: -- in addition to new audiences.
[15:40:00]
QUEST: So where do you stand on the vaccination passport? Alan Joyce of Qantas just on the program before you saying look, he believes that is
going to be necessary.
Can you see, not just for Airbnb, but as a vehicle to allow travel to happen for people to stay at Airbnb's that hosts may start saying only if
you're vaccinated or the vaccine passport will become essential?
CHESKY: Yes. We try to work really closely with health professionals. Just to give you an example last year we worked the former surgeon general of
the United States, Dr. Vivek Murthy -- I think is now nominated again to be surgeon general -- and we're going to take guidance from experts like him
and others. So we're very open minded to it.
We don't have a policy yet about where we -- what our protocols are going to be. At this point we're not requiring vaccine passports to travel on
Airbnb.
And so we're going to just kind of see -- this is one of those things where I think taking advice from health professionals is going to be quite wise.
So that's who we're working with on this matter.
QUEST: Brian, good to see you, sir. I appreciate your time.
CHESKY: Thank you very much.
QUEST: Thank you for joining us. That's the chief executive of Airbnb.
As we continue on QUEST MEANS BUSINESS.
Banking big on renewable energy. South Africa is going with the wind to find energy solutions. In a moment.
(COMMERCIAL BREAK)
QUEST: The events of Texas and energy in the last couple of weeks have reminded us the significance of a balanced energy policy to make sure the
power stays on.
And now South Africa is putting wind power front and center in its push for renewable energy.
In the process the Rainbow Nation's empowering local communities.
Eleni Giokos in today's Connecting Africa.
(BEGIN VIDEOTAPE)
ELENI GIOKOS, CNN CORRESPONDENT, CONNECTING AFRICA: The World Bank invested more than $11.5 billion into renewable energy projects in Africa
between 2014 and 2018, as electrification is seen as key in driving economic growth on the continent.
NTOMBIFUTHI NTULI, CEO, SOUTH AFRICAN WIND ENERGY ASSOCIATION: We've got 34 wind farm projects spread across the country mostly in the Eastern Cape
and the Northern Cape and then also in the Western Cape.
So there's a lot of untapped potential, not just in South Africa but in the whole continent.
FLORIAN KROEBER, CEO, 3ENERGY RENEWABLES: The advantages of renewables is obviously broad.
[15:45:00]
But what we value most is the fact that you can install renewables over a continent in multiple locations rather than as burning coal where you want
to have your power plant close to the mine.
So we can empower communities not just in one concentrated area but we can go broad over a continent.
GIOKOS: In South Africa, the program that allows independent power producers to submit competitive bids to design, develop and operate large
or small scale renewable energy power plants has been an enormous success.
NTULI: We are headed for a huge growth phase in the industry. There's going to be lots of opportunities for players across the value chain
whether development, whether construction, operation and maintenance to actually get involved in the sector and contribute and benefit.
GIOKOS: Since its launch in 2011, the public-private partnership program has attracted over $13 billion in private sector investments and has
created around 38,000 jobs, predominantly in local communities.
So how many houses can you light up from this farm?
DANIE DU PLESSIS, CEO, CENNERGI: This is probably about 100,000 houses. So we generate around 320 gigawatt hours of electricity per year.
GIOKOS: Do you think we're going to see a lot more of these projects in the next few years, and how much do you think it can actually contribute to
the national grid?
DU PLESSIS: Government's brought out the integrated resource plan 2019 which gives us an idea of the renewable -- well, the energy mix up to 2030.
We are looking at around 500 average-sized turbines that needs to be commissioned every year to reach that target. We're really in for a
fantastic ride.
(END VIDEOTAPE)
QUEST: Coming up. The streaming wars are heating up. More services than perhaps you can shake a stick at.
The president and chief executive of Discovery International about their offering which now has more than 11 million subscribers.
(COMMERCIAL BREAK)
QUEST: The streaming arena's getting more competitive by the day.
Next week, CBS launches Paramount Plus, they're a pre-branded version of CBS All Access which already has 30 million subscribers.
Look at the rest of them. They're all there including our own HBO Max which, of course, is part of Warner Media same as CNN.
[15:50:00]
Discovery is proving to be another strong player. It says more than 11 million subscribers have signed up for Discovery Plus since it debuted last
month.
JB Perrette is the president and chief executive of Discovery International. He joins me from London. Good to see you, sir; I appreciate
your time, thank you.
JB PERRETTE, PRESIDENT & CEO, DISCOVERY INTERNATIONAL: Nice to see you, Richard.
QUEST: All right. So you're very specific. Firstly it's non-fiction and it is a very defined area that you are going for.
And secondly, it's your pricing point which makes it sort of complementary rather than either/or. That's different to the others.
PERRETTE: Yes. We, we look at it, Richard, as a huge global opportunity for us.
There are a number of services as you mentioned that are already in the market, more launching, that are really in the sort of words of the
streaming war, really battling it out, for what we see as scripted content, scripted series and scripted movies.
And there are a lot of terrific services but there's a ton of them.
We're very different, we're one of one. And we are -- we don't really look at ourselves as part of the streaming wars, we look at ourselves as a
streaming ally.
We're a perfect companion to all those services because we focus, as you rightly said, in a distinctive lane which is all the definitive home of the
best real-life stories and real-life entertainment.
So whether you love cooking, innovation, true crime, adventure and survival, all the best real-life non-fiction stories are here in discovery
plus.
And we think it's a perfect complement to all those other scripted streaming and scripted series products that are already in market.
QUEST: Where do you see, though, this relationship with the consumer, where do you see the exhaustion level? Where people just say I'm not paying
another penny for something else that I might or might not watch?
PERRETTE: I think the amazing thing about media is the history of media over decades will tell you that the growing share of wallet as well as the
growing share of time that consumers will devote to media continues to expand. And every technology innovation that's happened generally ends up
increasing the pie.
So I think while at the end of it day people probably won't have six, eight, ten services but I think for now we're still very early in this
business.
And while in the more mature markets, people already may have three, four, growing into five, six services, I think it's still early days. And I think
we'll be surprised at the number of services people have.
I think the thing we're going to see, Richard, which makes us feel much more strongly about our proposition is that we've seen from just the
numbers we reported earlier this week the time spent with our product, people love to spend.
They're spending more time with our product on streaming than they even were in television and we have the longest length of tune-in television.
And so the stickiness and the engagement that we're seeing is incredibly powerful.
And other services that are more hit driven may have people coming in and out whereas ours -- I think we feel very comfortable -- will be a very
sticky and have a long-term retention for the subscribers.
QUEST: But the relationship you also have to manage is with traditional distributors, the cable companies and the like.
And at some point they're going to start bundling all this -- we're going to be back to the future, as they say. They're going to start bundling you
all together. But you've got to keep them on side, Comcasts, the Spectrums, the Direct TVs of this world.
PERRETTE: We do. And the good news is we've had a long and very fruitful history with the distributors.
And you mentioned all the U.S. ones; the reality is we're a global footprint. And the one thing we really do see as also different is we're
one of only two or three of the truly global brands and global streaming services owning all of our content around the world.
And we've developed very, very complementary relationships. Including with Sky here in the U.K. where we have a partnership on a traditional pay TV
(ph) portfolio. They were also a big launch partner for us on Discovery Plus here in the U.K.
And so we think the relationship can work in both ways.
And that the customer segments -- there's a group of customers who are willing to pay a higher price and have access to everything, the full
buffet. And then there's some that are more price sensitive that, in fairness, particularly in U.S. where sports largely has driven the price of
pay TV who are more price-sensitive. And don't necessarily want the high- priced all you can eat.
And so for that, our product starting at just 4.99 is incredible value and allows people who previously had either cut the cord or no longer in the
pay TV ecosystem, to sample our product, engage with our product in the way that they couldn't just 60 days ago.
QUEST: Good to see you, sir. Have a good weekend. Thank you for joining us, thank you for staying late --
PERRETTE: Thanks, Richard.
QUEST: -- and joining us from London. I appreciate it.
Now, we are a minute from the -- well, four, five minutes from the closing bell.
[15:55:00]
Let me update you with the markets. The up and down week, all over the place. We're off over one percent so we're off the lows but we're still
down quite heavily.
Look at the Dow 30. I wanted to just finish with a quick look at the Dow 30 so you can see how it's broken out.
Microsoft had a strong session, as indeed has Apple. So they are ruling the roost.
But the rest -- Caterpillar's down two and a quarter. I think that's on the back of possibility the infrastructure is not going to be as big or bold as
people had thought if the stimulus package doesn't pass.
But it's down, the market.
The NASDAQ is up and the comparison of the week shows that really the market is uncertain. There you are, even the S&P is down. But the NASDAQ
has eked out a gain which is remarkable in its own right.
We will have a "Profitable Moment" after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment."
Everybody seems to be ready and waiting in the travel and tourism industry but ready and waiting for what?
Well, the recovery that is likely to happen later this year; we know that there is a pent-up demand.
Just look at Airbnb's numbers. People did travel, they did stay away from home, and they did it in a different way. But at the same time today, we
got numbers from IAG which is the owners of British Airways and Iberia and Aer Lingus that show how deep the troubles are.
And yet, even there, they're looking forward to further down the year as economies open.
The biggest risk to all of this besides the variants -- which, of course, is a very real risk, never mind besides -- no, it's a very real risk -- is,
of course, the whole question of the vaccination passports.
Where do I stand on vaccination passports? Frankly, I don't know yet. I can see that they're going to arrive, I can see it's going to be the vehicle by
which most people will need to have one before they're going to travel -- like the old yellow fever.
But it's going to create a haves and have-nots between the rich and the poor, the developed and the developing world. And that's why more work,
more research needs to be done on this particular issue. Vaccination passports.
But recovery is on the way.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York.
Whatever you're up to in the hours ahead, I hope it's profitable.
The Dow is down, the bell's ringing. The day is done. Oh, look. Nasty.
END
