Editor’s Note: Connecting the Dots is a series of monthly conversations with Michael Dominguez, President and CEO of Associated Luxury Hotels International. The series examines issues in the global economy in 2024 that will “connect the dots” to be helpful not only in business but in life as well. This installment is moderated by Ashly Balding, Executive Vice President & Chief Sales Officer at ALHI.
Ashly Balding: Crazy is a good word. There's a lot of elections going on, so what have we learned?
Michael Dominguez: Well, we got through our (U.S.) crazy election, so we learned ours is over. But most importantly, I think when we entered the year, and you've heard me talk about this since January, 60% of the world GDP had an election this year. I tell people it's like a hockey lane change. It's 40 countries that have had elections this year. The reason that that matters if you look at CEO surveys—and I keep up with McKinsey survey of CEOs and the Chief Executive survey of CEOs—what had moved over the last 18 months, it was always what was your biggest concern? Earnings...workforce. Right now, to any survey, what's your number one concern? Geopolitical instability. We know we have wars around the world, that's already there. Why I'm concerned about this is that we are having a massive shift in administrations around the world that is going to change trade partners, that is going to change alliances. When we have conflicts, that's going to change on which side of the aisle some of these people line up on. I don't know what the answer is. I just know it's very volatile at the moment and something we have to pay attention to. But just to give you an example: the UK has an election and the Labor Party takes over for the first time in a couple of decades, and we have a new prime minister. France has an election and there's nobody in charge because no party has a majority, and they have three parties. If you think our system is a mess, three parties with nobody in charge when it's all said and done. Then when you think about what happened in Germany, the Conservative Party of Germany took over for the first time in 40 years. Japan called for a snap election and if you follow snap elections, that is usually a current administration calling for an immediate election because they're trying to get enough of a majority to move their legislation forward. They called for a snap election and they lost power, so it was the opposite. You had a regime change again in Japan. Those things happening around the world are going to complicate the world moving forward. I don't know what it all means, but it's going to be an interesting dynamic. You're going to have a lot of new people. I think that could be good and bad. The good is it's the first time in our election process that we had a president that was a president four years ago now coming back in. One of the positives is these are brand new relationships they get to build with these new leaders. There's no old baggage that comes to the table, so that may be a positive long term. Not sure. But there is a lot of chaos. The one thing that is sometimes missed and I talk about this often, I care about policy, not politics. Politics is all the emotion that goes behind it. Policy is what are we doing and where are we headed? The interesting thing is, when you dig through what happened in Germany, what happened in the U.K., what happened in the U.S., it was a youth movement that made the change, and it was a surprise vote in the youth movement in the direction they were headed. But what you were looking at like, literally regime changes in all these countries that are being led by Generation Z, not the Millennials. It is the 28 and younger that are moving in. The way that's been worded, and I'm always cautioned saying it because internationally, when you say conservative we think conservative here, republic. That's not what it means by being conservative. It just means they're more moderate in their thought process and what's important. The one thing that stood out across the globe during this election, and every one of those is an immigration issue. Europe is struggling with it in their own regard. We're struggling with it here in the United States. That is the number one issue that is causing a lot of these regime changes, and I think it's going to give us a lot of uncertainty in that area in the future.