March 28, 2024

Frequent Flier: Tight With a Dollar, but Expansive in Spirit

IN the last 10 years, I’ve traveled quite a bit for business. I actually made 27 trips to London in 18 months to meet with clients who use our webcasting and virtual meeting technologies.

I usually travel alone. I’m not sure anyone really wants to travel with me. I’m a friendly guy, but I may be among the world’s cheapest business travelers. I’m not a Four Seasons kind of guy, more like a Two Seasons, if there were such a place.

It’s a joke around the office to see just how cheap I can be. It’s also a game to me. I want to see how little I can spend on hotels when I have to travel. There’s also an element about being smart with our dollars.

Everyone here remembers the dot-com bubble bursting. We remember what happened to business after 9/11, the stock market slide back in 2008 and the recession. We know what it’s like to tighten our belts, and we’d sooner put money back into the business and our employees than spend it on a fancy hotel.

When I fly to London, I always fly coach and then challenge myself to book hotel rooms that are less than £100 a night. This summer, I checked into a hotel that was only £50 a night. It had a sign in the lobby advertising air-conditioning for £5 a night. Considering the money I’d saved on my flight and hotel at this point, I immediately informed the desk clerk that I would take the “upgrade.” 

After about 20 minutes in the room, there was a knock at the door. The bellman wheeled in my air-conditioning, in the form of a six-foot-tall industrial fan. The good news is that it oscillated, though it did create a kind of wind tunnel in my room. It was the biggest fan I’ve seen, like something from a factory floor. I just started laughing.

On another trip to London, I was with a colleague returning to our hotel after a night of eating and drinking. We came back on a different tube than the one we had taken earlier in the day.

There we were, walking along an avenue when we saw a horrendous-looking hotel, right above a very active gas, or what Londoners call petrol, station. The hotel looked as if it was going to fall into the gas station. It was just kind of propped there.

After a history of questionable hotel experiences, we were joking about how happy we were that we weren’t staying at that place. We passed the petrol station, turned a corner, and then realized the hotel we were mocking was indeed our hotel. I don’t think I slept that night.

One of the more interesting places I stayed at was something called a “botel,” which is basically a boat that serves as a hotel. During a recent trip to Amsterdam, I booked my arrangements last-minute for a trade show.

Going to Amsterdam is pretty extravagant, and I didn’t want to spend a lot of money. The botel was only 60 euros a night, and it was fun in some weird way. You just take a 20-minute ferry ride out of downtown Amsterdam, pass some sunken submarines, and then you’ve arrived. The botel even provided bathrooms and hot water. But apparently the soap was extra.  

I think business travelers should realize that just because something is cheap doesn’t mean it’s bad. It just could be interesting. I don’t need a spa. I don’t need a masseuse. I don’t need room service. But I still think soap is a really nice touch.

 

By Nick Balletta, as told to Joan Raymond. E-mail: joan.raymond@nytimes.com.

Article source: http://www.nytimes.com/2012/12/04/business/tight-with-a-dollar-but-expansive-in-spirit.html?partner=rss&emc=rss

Reuters Breakingviews: Euro Bonds Unlikely to Solve Problems — Reuters Breakingviews

It is not surprising that fiscally challenged governments, like Italy’s and Greece’s, are in favor of euro bonds. If they could issue debt guaranteed by all their partners in the euro zone, they would not find it so hard to borrow money. They would then be under less pressure to do unpopular things like tighten their belts and reform their economies. It is also understandable that investors are clamoring for the introduction of euro bonds, because they could then recoup the losses on their investments in the fiscally weak countries’ debt.

But there is little chance of these bonds being approved any time soon by fiscally strong countries — led by Germany, the Netherlands and Finland. The politicians and public in those nations are worried about being drowned by other countries’ debt. The bonds would also blunt the incentive for other governments, which have borrowed too much money and whose economies are uncompetitive, to put their own houses in order.

Germany may be prepared to consider approving euro bonds once current debts are under control. But that, by definition, wouldn’t be a solution to the crisis. What is more, Berlin would agree to the issue of euro bonds only if other governments accepted strict rules on how much they could borrow. Mark Rutte, the Dutch prime minister, has even suggested that a budget czar should be appointed to ensure that countries don’t break the rules in the future. The czar would have the power to fine miscreants and, in the extreme, force them to increase taxes or quit the euro zone. Once the crisis is over, other euro zone countries may not find such a loss of sovereignty so appealing.

Conventional wisdom is that fiscal unity among countries in the euro zone — of which euro bonds would be a primary element — is needed to make the monetary union a success. Both euro-enthusiasts and euro-skeptics tend to share that view, although the latter group thinks of such unity as hell rather than heaven and would prefer the single currency to be dismantled. Both camps often argue that the main reason the euro zone is in crisis is because monetary union was started without fiscal unity.

But this conventional wisdom is flawed. Governments didn’t build up excessive debts because of the lack of fiscal unity. Rather, it was because they flouted the rules meant to limit borrowing and bond investors kept lending them money. There was a failure of discipline, both by the bureaucrats and by the market.

The least bad way forward is to make the discipline of the market more effective while giving struggling governments some help to make a transition to healthier economies. Allowing controlled default, which would inflict losses on investors, would be a valuable lesson that foolish lending has consequences. So far this has happened in only a half-hearted fashion. In Greece’s case, the “pretend and extend” approach has meant that the country hasn’t been allowed to go bust despite debts that could reach 167 percent of gross domestic product this year, according to Citigroup.

The chaotic policy making is causing unnecessary suffering. Despite that, the current approach has had one big success: Greece, Ireland, Portugal, Italy and Spain have finally started to embrace reforms they have shirked for years. Labor markets are being liberalized, pension ages pushed up, corruption rooted out and tax evasion tackled. More reform is required. Ultimately these changes will result in fitter economies, although there is no denying that the short-term outlook is bleak.

A combination of such supply-side changes with the option of controlled default in extreme cases isn’t just the best way of handling the current difficulties. It is a better long-term model for the region than euro bonds and fiscal unity.

Article source: http://feeds.nytimes.com/click.phdo?i=214cc015b71239059386fe145c292451