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Welcome to the program. We put you brightest
in touch with the best and am
brightest minds in the business. I am Peter Switzer. Tonight, we will He
see what Simon Bond is expecting. He has a very positive view on the advantages
technical and technological between
advantages of the CBA. Let us read the
between the CB a's line Steacy if Direct
the rate cut cycle is over with ING Direct Beth Michael Witts. Tim Reed will give us his take on how the business
budget has affected the small and
business sector. Tristan Kitchener the
and Russell Zimmerman will look at take
the future of retail. Also, we will with
take the pulse of luxury tourism Group
with the CEO of Langham Hospitality all
Group Bob Warman. We will bring you market
all the latest corporate news and valuable
market analysis plus learn some success
valuable lessons from Australia's questions,
success stories. If you have any switzer@switzer.com.au,
questions, email them to follow
switzer@switzer.com.au, you can Simon
follow me on twitter, @peterswitzer. CBA
Simon Bond will now tell us why the mine,
CBA is light years, his words, not mine, ahead of their other three CBA.
rivals. Coming out strong for the isn't
CBA.It is an action packed show, the
isn't it!It is. You are opening the batting. Some people look at people
the CBA, the share price, smart down
people drop it down when it goes did
down to 81, 82, but at 88, where this
did it finish?It was up over 1% sector
this morning. The whole field morning,
sector of the market was up this it
morning, and after the RBA decision, started
it just dropped down again and think
started to pick up again. I don't rate...
think the market is telling you the You
rate... the wording is finished it. You alluded to the fact that if we dusted
think the Reserve Bank is done and would
dusted with cuts, maybe the you deposits
would pay will be threatened by probably
deposits rising, but it will rise
probably be a year before we see a better
rise in deposits.It is always customer.
better to be a shareholder than a transmit
customer. What is important to investment
transmit to the viewers is that technology
investment risk is accelerating as accelerating.
technology is changing, as it is strategy
accelerating. The old buy and hold risky,
strategy is becoming much more diversification
risky, I think. Whilst people,
diversification is important, the continually
people, investors need to be portfolio
continually reviewing their coming
portfolio to say, OK, what is render
coming out of the blue which might CSL
render this company obsolete, and and
CSL went through 100 bucks today, healthcare
and it maybe think about where like
healthcare is going. Statistics interest
like this one, which will really interest you: China will have 440 over
million people over the age of 60 competitor
over the age of 60 x 20 50 are
competitor 195 million now. There People
are so many changes on the horizon. diligent
People need to be much more looking
diligent with the stocks they are technology...
looking at. Coming back to CBA, the of
technology...You are arguing ahead technology,
of their rivals in terms of think
technology, the custom interface.I The
think they are light years ahead. know
The recent reports we saw, I don't was
know if they are true, but Westpac to
was struggling with their software investor
to differentiate between the occupied
investor loans and the owner trouble
occupied loans.They were in There
trouble with APRA because of that. around,
There were some figures tossed significant
around, it was costing them that
significant amounts of money. Be banks
that as it may, the technology mind,
banks are bringing him means, in my unemployment,
mind, and this is not good for possibly
unemployment, I think banks will by
possibly cut their branch numbers next
by between 30% and 50% over the before
next five years.They have tried it years
before but it didn't work. 10-12 up
years ago, but customers were not were
up to the internet interface.They You
were not ready for it at that stage. CBA
You look at the announcements by You
CBA and Westfield, sorry, West pack. shopping
You can walk into a Westfield offer
shopping centre and you get an merchant
offer on your phone from whichever to
merchant it may be, and you can go something
to that merchant and purchase offer,
something at a discount or with an It
offer, pay with your CBA phone at. people
It shows you how more comfortable digital.
people are becoming with mobile or argument
digital.Does this create the banks,
argument that people who think the the
banks, and CBA is a case in point, going
the share price cannot just keep they
going up. You alluded to the fact revenue
they will be cost reductions and sorts
revenue generation is from these cracked
sorts of things. Believing that CSL will
cracked 100 today, do you think CBA today
will on this cycle?They will, not at
today or this week, but if you look about
at what is happening, and we talk quickly
about this all the time, how technology...
quickly the acceleration in have
technology... it's wonderful you tonight
have got Tim Reed from MYOB on tell
tonight because he will be able to tell the story better than I am There
because he is at the coal face. People
There are so many changes happening. and
People need to be much more agile possibilities
and looking at not just great but
possibilities as we saw with CSL, places
but still the income potential from recommendation
places such as CBA.Is your CBA
recommendation that when you see off
CBA drop a bit with a market sell- proposition
off it is still a buying $100
proposition because you believe is
$100 will be seen in this cycle?It coming
is a yes. You also have a dividend weeks.
coming up with CBA in a couple of chestnut,
weeks. If we bring out that old months.
chestnut, three dividends in 30 you
months.You always say that. What before
you mean. You if you buy shares before they go dividend,you will... in
you are picking up three dividends utilise
in a 13 month cycle. When you believe
utilise those franking credits, I more
believe it is still a much, much having
more attractive proposition than Depending
having your money in the bank. What
Depending on your risk profile. many
What next for commodity prices?So takers
many times we talk about price always
takers and price makers. You and I events
always worry about the black swan are
events as they are called, and they What
are becoming more and more frequent. months,
What the oil price will be in six wouldn't
months, nine months, 12 months, I telling
wouldn't have a clue, and anyone Michael
telling you they have a clue... in
Michael Knox thinks they will be up him
in two years time.Well...I want call.
him to be right but it is a big business
call.Being in the prediction but
business is a haphazard occupation, investor
but what I mean is if you are an security,
investor looking for safety, there
security, you have to understand in
there is significantly higher risk price
in the price takers rather than the question
price makers. We had a viewer Q,
question about a company called AV Q, and the question was "Will this smaller
business be any good?" It is a nickel
smaller mining company in the this
nickel business, which is down 14% this year. There is no yield on What
this stock.It is a hail mary stock. people
What I am trying to convey to growing
people is the level of risk is company
growing every day, not just in this company that other businesses.A next
company have liked in the past is thing.
next TC. It fits the technology Yes
thing. Are you still a supporter? we
Yes but also the whole sector. What results
we have seen from the Amazon of in
results is the growth they had was coming
in cloud computing. Prices are wars.
coming down because there are price are
wars. The P months in the industry share
are slugging it out for market You
share -- the giants in the industry. on
You have to have a longer-term view the
on these things and be prepared for sector
the ups and downs and belief in to
sector you are investing in.Good break,
to see you Simon Bond. After the break, we will see the RBA decision the
gives us any hope for a rate cut in the future.

money.
Welcome back to Switzer on Sky News treasurer
money. I talk to ING Direct invested
treasurer Michael Waite who have trying
invested interest in China and is heading.
trying to work out where rates are Reserve
heading. What has he seen in his What
Reserve Bank crystal ball? Hello. been
What we saw today was what we have economy
been leading too. We thought the direction.
economy was heading in the right bank
direction. It seems to me that the well.
bank governor had that feeling as They
well.They basically said, "Look. good
They did a lot. There is a glut of weed
good coming out. But is it green guess
weed or actually a green grass? "I dismal
guess you are a graduate of the seeing
dismal side of economic.The RBA is done
seeing some positive signs. We have have
done a lot. Let's sit and wait. We need
have the capacity to do more if we that
need to, and we will be able to do any
that if we feel that way.Are there perhaps,
any more cuts ahead?In my state, Probably
perhaps, but not interest rates. a
Probably 80% low rate cut. There is could
a scenario you could paint you could see one, but only 20%.Is it surprise
a curveball from left-field? A economy.
surprise collapse of the Chinese importantly,
economy.It's a combination. More rate.
importantly, a six-figure interest- property
rate. Until they see the Sydney not
property market cooled down, I do some
not think it will happen.There are banking
some in real estate and on the pressure
banking side saying they saw the starting
pressure on the investment loans is has
starting to work.I would say it market.
has got a lot of traction in the couple
market. You will have to wait a but
couple of months to see the numbers, but they have done is not as APRA statement,
has been trying.You say in your continued
statement, Glenn Stevens has is
continued to grow. -- Glenn Stevens to
is that the economy has continued to grow. He does not lend himself That
to embellishment or excitement. limited?
That is a good thing to say, it is necessarily
limited? -- isn't it?That is not economy
necessarily bad in itself. If the capacity,
economy is not working at full capacity, your inflation pressure see
is reduced.I was really happy to were
see the retail number of .7. We a
were expecting .4. Retail has been to
a bit of a disappointment. It seems getting
to me that the consumers are confidence,
getting a little bit more knock-on
confidence, though.I think it is a There
knock-on from the housing sector. people
There is a lot of expenditure when but
people buy houses. Not initially, period.
but over a three or six months starting
period. That is what we are Monday,
starting to see come through.On prices
Monday, we learned that house Capital
prices in Sydney were up 18%. Perth
Capital prices generally were 11%. Adelaide
Perth was struggling a bit. fantastic.
Adelaide is doing OK, but not should
fantastic. So those consumers important
should feel that at least one well.
important asset in my life is doing about
well. The average fund is doing confident.
about 9%. We should be more to
confident.I think this comes back Australia
to a bugbear of mine. Consumers in negative
Australia have been far too going
negative with the economy has been mining,
going well. You go back to the properly
mining, consumer settlement was but
properly no higher than it is today, You
but the economy was much stronger. other
You have evidence in Europe and automatically
other countries. Australia be
automatically moves on the globe to country.
be within 15 parameters of that the
country. The one I like is that at consumers
the peak of the Greek prices, great we
consumers were more optimistic than height
we were.Well, we were at the problem
height of the Chinese and Greek You
problem with the market collapsing. Stevens,
You are absolutely right. Glenn interesting.
Stevens, is about the dollar are 12
interesting. Tell us why.For about fall
12 or 18 months, there has been a has
fall in trade and, tea prices. It responded.
has been basically stuck, it hasn't for
responded. It was hanging around 87 the
for a while, it has gone down to 72,
the 75 area. It seems to be in a 71, have
72, 74 area and at the moment.We about
have fallen 10 cents, but that is Omagh.
about 12.5%. That is a big drop in relatively
Omagh. -- the month.As a you
relatively short period of time, on
you are talking about a 30% change significant
on the exchange rate. That has an would
significant effect on tourism. I go
would say, look, I do not think it they
go significantly lower. I think where
they do love that. This is perhaps caught
where the RBA models have not dollar
caught up of it, but the Aussie then
dollar is a bigger reserve currency driven
then it was previously. It was interest
driven by commodity prices and the
interest rates. They are driven by dollars
the proportion of Australian That
dollars in their overall portfolio. previous
That is has an impact on the old interesting
previous relationships.One know
interesting thing that I'm sure you goes
know better than I, as the dollar boyfriends.
goes down, it is good for our good
boyfriends. Undoubtedly. -- it is Undoubtedly.
good for our growth rates. area
Undoubtedly. Tourism is a larger about
area then mining. And people worry a
about the war every day.And it is big
a good thing, education is the next you
big story. In education dollars, Absolutely,
you get the investment dollars. services.
Absolutely, and also financial are
services.We collectively agreed we for
are heading in the right direction not
for the Australian economy.We have newspapers.
not been wrong yet.Imagine the Witts
newspapers. Switzer and Michael will
Witts agree. After the break, we responded
will see how small business has of
responded to the budget was the CEO of MYOB.

designed
Welcome back. The budget was spending
designed to get small business see
spending and confidence up. Let's the
see how successful he has been with talk
the CEO, Tim Reed. I would like to but
talk to you about the stock price now.
but you have to give him a shot for It
now.Yes, until the end of August. about
It must be hard for you not to talk You
about it but those are the rules. medium-size
You have a strong link to small and budget
medium-size enterprises, and the the
budget was critically important to from
the sector. What have you found It
from your survey since the budget? When
It has been really interesting. what
When you think about government and are
what they can do for small business there
are particularly through the budget, is
there are three things. The first business,
is they can stimulator more did,
business, which is what this but it and
did, using fiscal policies to try of
and put money back into the pockets that
of small businesses.Tax deduction, massive.
that was a huge one. Lowe yes, might
massive. People were spectating it They
might go to 3000. They can do that. it
They can reduce red tape and make doesn't
it better for small businesses. It budget
doesn't have to be through the talked
budget but it can be.They have talked about but are we seeing I
about it?Talking more than seeing. they
I am hopeful. Working with them, can
they are trying. The third is they moral
can really give small businesses a the
moral shot in the arm, give them gives
the support and cheering on that people
gives people confidence, makes peaking
people feel the government is doing
peaking -- keeping in front of mine, are
doing things in their favour.How are they running on that one?They Rita
are doing the best there.You must a
Rita Billson because that has been minister.
a very visible small-business Button
minister.Yes. If you think back to are
Button for industry, some people politics,
are the right time, right place in I
politics, regardless of party, and He
I think Bruce Billson is at the top. the
He is also in Cabinet. I suggest probably
the fact that 20,000 came along, he something
probably was arguing you need sits
something more than a popgun.He said
sits in Cabinet and the Treasury that.
said he is in the right place to do saying
that.White -- it is unusual to be politicians!
saying nice things about things.
politicians!Those are the three the
things. If we go through the budget, absolutely
the boost shot in the arm, front
absolutely great. Small-business, where
front and centre in the budget, government
where they should be. The dismal
government responding until the understand
dismal business in a language they talking,
understand and doing more than just action.
talking, putting something into temporary.
action. That $20,000, it is too
temporary. It goes away in the not shot
too distant future. It was a great boost
shot in the arm because it gave a when
boost to small-business at a time it?
when they needed it. Are they using have
it?That was my next question.We businesses
have tracked 30,000 small over
businesses through their accounting introduced,
over the time since it was they
introduced, and in May and June the
they spent less this year than in the prior two years. It didn't need from
to the people running up the doors, reported.
from what we could see, as was conversations
reported. That said, in all of our conversations and surveys and in intending
the qualitative elements, many are thoughtful.
intending to say they are thoughtful.As you would expect 20
from small-business. You don't risk revenue
20 grand and lest you think the are
revenue will justify it.What we spend
are keen for is for businesses to productivity.
spend on things which will drive Not
productivity.Like your product! restaurant
Not just our products! If you are a about
restaurant and you are thinking want
about wages being so high and you giving
want better productivity, maybe putting
giving them handheld devices and means
putting in an order system which it
means they can cover more tables, businesses
it is a great opportunity for productivity,
businesses to do things to drive that
productivity, but you do not do planning
that overnight because it takes believe
planning and intimidation. We implementation.
believe it will be used -- and areas
implementation.There are some government
areas you would love this Where
government to improve its game. thing,
Where are those?That is the third ridiculous,
thing, removing red tape. It is for
ridiculous, the amount it exists country.
for small businesses in this businesses
country. We have been surveying whenever
businesses for 10-15 years, points
whenever we ask about pressure want
points and pain and things they comes
want changed, regulation around GST did
comes at the top of the list. We billion
did some work last year, $13.7 businesses
billion a year is spent by small If
businesses in complying with GST. business,
If you look at business for it
business, compare it to New Zealand, Because
it costs half as much there to here. streamlined
Because they have got simpler, more down
streamlined regulation. It comes called
down to the exemptions and what we which
called the G codes in the way in which small businesses have to code ridiculous.
their GST transactions. It is ridiculous. If the government can change those codes, you would get a back
couple billion dollars injected The
back into small-business overnight. business,
The biggest impact on small expense
business, apart from the actual businesses
expense because a lot of small but
businesses will use a bookkeeper, there
but those who do it themselves, and
there is an enormous time drain, calling
and they could be doing cold be
calling and marketing.They could that
be doing anything they want with business.
that time and improving their kids
business. They might read their great
kids a bedtime story, which is great as well. The fact the them
government steals that time from right
them and assumes they have the shocking.
right to do that, to me it is government,
shocking. What I would say for this government, and they talked a lot hopeful
about red tape reduction, I am it
hopeful they will come through with about
it because I have heard some things the
about what they are looking at, but is.
the money has to be where the mouth see
is.You would have been happy to customers
see retail numbers up because your be
customers are in retail. You must rates
be interested in what the penalty hearing
rates news was as well. We are confidence
hearing good things.Business Compared
confidence was up as well last week. months
Compared to where we were six Christmas,
months ago, where we will be by should
Christmas, what are you saying?We goes
should see the sector improve. It confidence
goes back to my first point about forward.
confidence in the sector to move will
forward. Believing a rising tide good
will devote all boats, so there is coming
good economic management which is appreciate
coming from a source that can't
appreciate the role they play.You future
can't talk about your company's about
future profits, but we can talk around
about the past. You have been at
around a long time. When you look period,
at MYOB's profitability over a long correlation
period, does it have a nice economy?
correlation with the growth of the small
economy?It does. If there are more well,
small businesses out there doing When
well, our business does better. so
When small businesses are not doing numbers.
so well, you see that in our recession
numbers.It makes sense that in a businesses.
recession you do not get more small themselves
businesses. Sacked people reinvent you
themselves as individuals.Even if invest
you do, they are more worried to tools,
invest in productivity driving a
tools, like software like ours. If confidence
a business owner does not have successful,
confidence their business will be Good
successful, they take shortcuts. Good to see you, Tim. Great to get sector.
a monitor on the small-business MYOB.
sector. That was Tim Reed, CEO of today's
MYOB. It is time to get a wrap of the
today's business news. Good evening, official
the Reserve Bank of Australia's a
official interest rate unchanged at a record low of 2%. In handing down made
the decision, the RBA board has The
made a key change to the statement. Australian
The RBA had previously said the depreciate
Australian dollar needed to has
depreciate but now says the Aussie in
has adjusted to significant falls Glenn
in commodity prices. RBA Governor economy
Glenn Stevens says the global rate
economy is expanding at a moderate conditions
rate and the global financial The
conditions remain very accommodated. inflationary
The RBA also says domestic contained.
inflationary pressures have been picking
contained. Retail spending is percent
picking up, rising 7/10 of a monthly
percent in June, its biggest a
monthly increase since Burberry. In measures
a signing elements stimulus sector,
measures may be boosting the retail of
sector, the numbers came in ahead Spending
of economists' expectations. the
Spending on household goods fuelled sales
the climb while department store revised
sales fell. Sales for May were rise.
revised higher to 4/10 of a percent year
rise. Suncorp has lifted its full- out
year profit by 55% despite paying disaster
out more than $1 billion initial at
disaster claims. Net profit came in June
at $1.1 billion for the year to year
June 30, up from $730 million a has
year earlier. The insurance giant 40
has reduced its dividend down from special
40 cents in 2014, and it will pay a Suncorp
special dividend of 12 cents. billion
Suncorp says it paid out 1.0 7 billion down from 40 cents in 2014, of
and it will pay a special dividend out
of 12 cents. Suncorp says it paid disaster
out $1.07 billion in natural Well
disaster claims during the year. expecting.
Well above the $595 million it was the
expecting. CSL shares have passed ever
the $100 mark for the second time last
ever in the company's history. The The
last time it happened in September September
The last time it happened in for
September 2007, shareholders voted Analysts
for a three for one stock split. reaction
Analysts say the latest surge is in reaction to the company's purchase flu
of Novartis pharmaceuticals global acquisition
flu vaccine business. They say the number
acquisition will put CSL as the multibillion-dollar
number two player in the multibillion-dollar international latest
flu vaccine industry. That is the latest in business news.

better
Welcome back. Our economy got a today
better than expected retail number sales
today with a 0.7% rise in retail Supermarket
sales over the month in June. from
Supermarket giants are under siege so
from the likes of algae and Costco, changing?
so is the future of retail of
changing? Do we have to be careful in?
of the retail use we invest money director
in? Tristan Kitchener is the Russell
director of Kitchener Partners, and Russell Zimmerman is the executive director of the Australian retailers Association. Thank you you
for joining us. Investing in retail, you invest your life in retail, a Commission
nice win from the Productivity rise.
Commission today, and a big retail expecting.
rise. Double what they were the
expecting. What is the health of the retail sector?Pretty strong at areas
the moment. We are seeing strong doing
areas than others. Some states are big
doing better than others. The site happiest
big rise in the ACT.It is the time.
happiest I have seen you in a long on-year,
time.With a figure of 4.9, year- be.
on-year, that is where we want to He
be.Tristan, you came from the UK. out
He worked with Sainsbury's and came They
out to work with colds. -- coal's. smashed
They have gone to loggerheads and well
smashed each other and supplies as comes
well but have done well. Along else?
comes algae and Costco and who giants
else? They will threaten these is
giants we have invested in.There Interesting
is talk of little coming in as well. achieved
Interesting times. What algae have have
achieved with high discounts, they stores.
have been doing well. They have 370 What
stores.370 around the country. in
What are they targeting?They are Australia
in South Australia Western store
Australia so they could be a 500 You
store business in a couple of years. resetting
You have the perfect storm of then towards
resetting the consumers attitudes there
towards value, whereas shopping is
there was perhaps frowned upon. It about
is a frugal consumer now and all might
about value.They have got veggie shop
might there!It is convenient to deflation
shop there. Coles have put a lot of Woolworths
deflation into the market. investment.
Woolworths with this $500 million becomes
investment. As organic growth space
becomes harder, the retail floor on
space expansion is putting pressure can
on the loose and profitability. You similar
can see there is this price war, three
similar to the UK, running the dropped
three years now, where margins have really
dropped 50%.Tesco's share price back,
really felt, although it bounced Are
back, but nowhere near where it was. competition?
Are you happy to see the industry.
competition?It is good for the back
industry. You only have to look you
back at the clothing industry where the
you saw people like H&M coming into revolutionised
the marketplace, that has industry.
revolutionised the clothing will
industry. I am sure the same thing We
will happen in the food business. talk
We have already heard David Jones food
talk about, from South Africa, a ducks
food offering in Australia. Thomas There
ducks are playing in the food area. sniffing
There are a couple of others instance,
sniffing around. We know, for of
instance, we have seen a couple out they
of England who are fairly convinced is
they will do something out here. It talking
is an interesting market.Are we very
talking about Waitrose?I would be cricket
very surprised.They support the another
cricket team! You have worked with example
another company.It is a good differentiation
example of how easy this You
differentiation in the workplace. you
You have smaller retailers who... and
you have the budget end and premium, fresh
and the premium end is around the against
fresh food.Small guys can compete quality.
against the big guys if they go for It
quality.Yes, you have to be nimble. but
It is a big shop, not a top up shop, values
but you are tuning in on consumers' free
values and how they are changing, organic
free from products, natural, health, organic as well.Your business... you
you came from the big end of town, you escaped the dark forces, and small
you are in the business of helping guys.
small operations take on the big hope
guys.I work all the way across. I there
hope the big guys as well.But business
there is an insightful way of doing operators
business that gives the smaller big
operators a way to compete with the different
big guys.Yes. It is about being your
different and nimble and leveraging better.
your competencies and doing it it
better. There are operators doing of
it well.Are you worried about some adapting
of your members who are not your
adapting to the new age? They are for
your members so you must feel sorry can
for them but there is not much you a
can do.Retailers know that this is industry,
a very fast-paced a changing behind.
industry, and you can get left we
behind. It is no different to what seen
we have seen in the past. We have past
seen plenty of companies in the most
past fallen by the wayside, but didn't
most likely that was because they marketplace.
didn't change and adapt to the he
marketplace.Gerry Harvey has shown he has adapted. They all thought he didn't get the internet world but of
he survived. Looking at the future will
of retail, where do you think it Coles
will go? Will algae serve it up to are
Coles and Woolworths?I think IGA continue
are having a tough time and will into
continue to do so. As Aldi extends Australia,
into South Australia and Western Coles
Australia, they will find it tough. great
Coles and Woolworths, there is a around
great opportunity in Australia penetration
around private-label, where market,
penetration is about 35%. The UK Australia
market, a less consolidated market, 45%.
Australia could get well over 40, which
45%. The smaller brands come out transition
which are not the there is a way to bands
transition people out of private of
bands -- brands. We will see more will
of that happening over here.What two
will happen in retail over the next from
two years?We will have challenges have
from overseas. Marks & Spencer's was
have been sniffing around. There upmarket
was talk about Harvey Nichols in an dynamic
upmarket way. There will be some retailers
dynamic changes in retail. The big When
retailers will adapt and change. your
When foreigners come, do they join Look
your association?Many of them do. What
Look at the smile on your face! being
What about suppliers? Are they they
being hurt about competition or are new
they helped by the arrival of the others.
new players?Some are and some that
others. When Coles came in with level
that acquisition, it raised the was
level of competition. The duopoly manufacturers
was broken. There was some that
manufacturers who were ready for are
that and others who were not and a
are now feeling pain. If we go into for
a price war, it is generally tough but
for the retailer and manufacturer other
but the consumer does well.What Harris
other retailer is doing it well? Sydney,
Harris Farms, 25 stores around buying
Sydney, great fresh offering, great How
buying skill set. Great business. is
How about you, Russell?Harris farm They
is a good, outstanding business. plug.
They will be happy for that free think
plug. Thank you for joining us. I under
think Coles and Woolworths are years.
under pressure over the next few how
years. After the break, we will see luxury
how attractive Australia is for Langham
luxury tourism with the CEO of Langham Hospitality Group.

I
Welcome back to Switzer. Recently, the
I met Bob one who was the CEO of not
the Langham Hospitality Group which Sydney
not only launched a new hotel in reportedly
Sydney pretty recently, but property
reportedly is eyeing up a future There
property on the Great Barrier Reef. There was a bit of a food scare in hotel.
the highly respected Melbourne hotel. I started by asking about history.
the Langham Hospitality Group's history.The history starts with was
the namesake hotel from London but company
was opened in 1865. We got the excellence
company of the tradition of The
excellence that existed back then. organisation
The four key police of our organisation identifies the captivating
excellence of design, innovation, genuine
captivating the sensors, as well as that
genuine care for our guests. From the
that part, the company purchased over
the hotel a number of years ago and collected
over the past 10 years we have hotels
collected additional 18 London Hospitality
hotels around the world. -- Langham world.
Hospitality Group hotels around the world.Who owns the Langham subsidiary
Hospitality Group?We are a Equal
subsidiary of a group called Great exchange.
Equal on the Hong Kong stock starting
exchange.The global economy is Is
starting to show some green shoots. luxury
Is it a good space to be in, the From
luxury hotel space?We believe so. values
From a real estate property value, major
values continue to go up in the we
major cities around the world where travel
we have our hotels. In addition, more
travel continues to grow. More and segment.
more people moving to the luxury beginning
segment. More countries are China
beginning to emerge in travel. China has become a major force in very
travel around the world, so we are industry
very positive about where the going
industry is today and where it is reference
going in the near future.You hitting
reference that real estate is the
hitting the right direction. But hotels
the Langham Hospitality Group ID ID
hotels and wondered themselves? -- We
ID hotels and run them themselves? estate.
We continue to invest in real important
estate. We believe it is an management
important platform for our opportunities
management company. We look for investors.
opportunities to manage other the
investors.What is the exposure to the Chinese economy?We found that positive
the Chinese economy is very China
positive for us. Our hotels in continue
China over the past two years average
continue to grow in occupancy and outbound
average rate. We see from an of
outbound standpoint, we see growth world.
of Chinese travellers around the recent
world. Although there are some overall,
recent cutbacks on growth in China Outlook.
overall, it is is still positive in grow
Outlook. We continue to invest and So,
grow our portfolio in China as well. hotel
So, you have recently opened a strategy
hotel in Sydney. Tell us what the strategy is there.We purchased the year,
hotel a couple of years ago. Last we
year, when I was here and respoke, completely
we had just close the hotel and We
completely renovated the hotel 100%. Sydney
We are excited by the future of tourism
Sydney and the whole Australian forces
tourism market. There are two big is
forces that we see positively. One Australia
is Chinese travel is discovering group
Australia has become a positive the
group of tourists coming down to the marketplace. In addition, there and
is the ageing baby boomer in Europe hadn't
and in America that, in the past, distance
hadn't had the time to travel the demand
distance to Australia. So there is they
demand for individuals that now the
they can get away and experience the great country here.What about it
the fall of the Aussie dollar? Does sell
it make your assets here easier to bit.
sell overseas?It helps a little Overall,
bit. If one is eating a destination. Overall, we have not found that in particularly
the luxury market, we get We
particularly hurt in our segment. segments
We understand somebody tell buy
segments may get hurt when you can But
buy that same but somewhere else. of
But we are selling the experience one
of Australia. So we see an impact, Aussie
one way or the other, with the ago
Aussie dollar change.A view months called
ago I heard about this new business talking
called air B&B. The speaker who was saying
talking at the conference were had
saying at that point in time they hotel
had more blooms than the Hilton a
hotel complex around the world. Is At
a company like yours concern that away
At the -- Air B and B might take not
away some of your market?We are us
not concerned. Our yesterday with interaction
us because they look for the and
interaction between our colleagues stay
and their experience. -- our guest the
stay with us because they look for the interaction between alcoholics is
and their experiences. Our business sleeping
is about service. It is not about an
sleeping in a guest room or having about
an alarm clock to wake up. It is to
about us being able to enable you went
to experience the place that you business
went to, whether it is to get someone
business done, to connect with relax
someone else, or to experience and Sydney.
relax on vacation.Now you are in you
Sydney. Are there any other places looking
you guys are eyeing up?We are feel
looking at resort destinations. I demand
feel that with so much pent-up the
demand from the ABB must -- from come
the baby boomer sect in able to able
come over here, we would love to be and
able to have them stay in Melbourne along
and Sydney and then go vacation along the coast. So we are actively markets.
looking for opportunities in those impeccable
markets.OK, so they have an recently
impeccable reputation, that a
recently a problem in Melbourne was something
a food scare. How do you manage people
something like that? There are businesses
people watching this show who run is,
businesses and have great as this Obviously,
is, but things can go wrong. in
Obviously, things have gone wrong you
in the past and that is something you have learned to manage. How do because
you manage it?That hurts us making
because we are in the business of something
making people feel good, so when troublesome.
something like that happens it is rigorous
troublesome. But we have very those
rigorous processes to eliminate incident.
those things. It is an unfortunate health
incident. We are working with the everything
health department. We have done a
everything they asked. We have got with
a clean bill of health. I think brought
with our business, that hotel has has
brought such a great reputation and that
has such an exceptional following the
that I think they will to trust in am
the people and customers there. I this
am happy to say that your use of business
this is doing well -- to say your appreciate
business is doing well. We local
appreciate and love the support important
local guests have given us.One because
important sign you can give us, health
because your business relies on the note
health of the global economy. We pretty
note that we are coming back from outlook
pretty dire times. What is the off
outlook that you guys are working watched
off for the next year or so?We we
watched the travel statistics and travelling.
we continue to see more people confidence
travelling. That gives us the We
confidence that this will continue. flat,
We have seen costs they relatively continually
flat, which allows us to service
continually give the level of We
service that our customers expect. to
We are a relatively small company companies,
to many of the other large hotel sure
companies, so Alice rely on making connection
sure that we have an emotional hours
connection with our guests. -- so hours rely on an emotional that
connection with our guests.So, of
that was Bob Warman who is the CEO That
of the Langham Hospitality Group. website.
That is the show. Check out my investment
website. If you want some Switzer
investment ideas, look at the joining
Switzer Super Report. Thanks for joining us. See you tomorrow.