Blackstone Bets 20 Trillion Won on Hotel and Travel Industry... Launching US Economic Normalization

[Asia Economy Reporter Yujin Cho] Bloomberg reported on the 22nd (local time) that Blackstone, the world's largest asset management firm, has bet tens of billions of dollars on the travel industry amid expectations for economic reopening following the COVID-19 pandemic.

According to the report, Blackstone doubled its investment in stocks benefiting from the economic recovery outlook after the COVID-19 pandemic. In the first quarter of this year alone, Blackstone invested $17.7 billion (approximately 19.8 trillion KRW) in hotels, private jet operators, and travel companies such as Extended Stay America, Signature Aviation, and Burn Leisure. Although the hotel and travel sectors have not yet fully recovered from the pandemic's impact, Blackstone judged that clear "signs of improvement" are emerging.

Blackstone observed changes in consumer behavior following the COVID-19 recovery. The company stated, "Slot machine usage at the Cosmopolitan Hotel in Las Vegas has reached an all-time high, and bookings for travel to the UK are surging," reflecting this assessment. Jonathan Gray, President of Blackstone, said, "Sectors like telemedicine and e-commerce will continue to perform well, but the pendulum is now swinging back to previous industries," adding, "It feels as if the dam that was holding back the economy is beginning to break."

The U.S. aviation industry also stated that the COVID-19 pandemic is on a faster recovery trajectory than expected and has begun preparations for normalization. The U.S. aviation sector viewed the COVID-19 crisis as having passed an inflection point in February and March, anticipating a rebound in demand and resuming pilot recruitment. American Airlines plans to hire an additional 300 pilots by the end of this year.

Earlier this month, United Airlines became the first major U.S. airline to announce the resumption of pilot hiring. United Airlines intends to prioritize hiring over 300 pilots who were offered part-time positions last year or whose new hires were canceled. CNBC, a U.S. economic media outlet, interpreted the resumption of hiring by airlines as a signal that they are preparing for a surge in travel demand following the COVID-19 recovery.

Airlines noted clear signs of a rebound in business travel demand from small and medium-sized enterprises as the COVID-19 recovery progresses, and they analyzed that large corporations will likely resume business travel starting in the third quarter. Gary Kelly, CEO of Southwest Airlines, assessed that "the worst is over," and Scott Kirby, CEO of United Airlines, said, "Travel and tourism demand within the United States has entered a recovery phase."