PMIPT Newsletter | Margin Call: Be First, Be Smarter, Or Cheat 🛩️📈
The Margin Call : Travel, Markets and Strong Opinions Newsletter
Sponsored by 3137 Capital
Good morning. As PMIPT grows and evolves — the evidence has proven that the travel / hospitality sector is hungry for a market and data collective. As an investor and spectator, more so a fan in the industry, I figured why not include a market section to the weekly editorial to satisfy this hungry for our readers and beyond. But perhaps, this is my way to finally have an healthy excuse to continue to build the plethora of spreadsheets sheltering this information. Let’s dub this newsletter — Margin Call — a homage to one of my favorite movies capturing one of the feathers that collapsed the proverbial camels back in the 2008 financial crisis. Think of a margin call similar to when a bank is calling in a loan because the house you put up as collateral just dropped in value, and they want their cushion back. The travel sector has experienced a few margin calls over the few decades. Some forseen and some black swans but as said in the film —
“There are three ways to make a living in this business: be first; be smarter; or cheat. Now, I don't cheat. And although I like to think we have some pretty smart people in this building, it sure is a hell of a lot easier to just be first.”
John Tuld, fictional character played by Jeremy Irons
Be First —
Sonder is back! Ok a bit misleading but TravelAi has acquired the trademark, domain name of Sonder, as a “AI-enabled brand for boutique hotels and urban accommodations”. We covered the theatrical fall of Sonder last year - leaving guests locked out of their room all around the world. In short, many woke up in the middle of the night of their Sonder stay for a bucket of ice and couldn’t access their room once exited. Honestly, I like this new, reduced, potentially honest version of Sonder. From a quasi short term rental company / back-end property management system to now an Ai enabled aggregator fronting accommodation listings featured on OTAs such as Booking.com, Expedia or any partner of Travel Ai. Let’s assume this is a commission based business model and scaling will be heavily dependent on sanitizing the Sonder brand name that enable partnership growth and marketing visibility. Hence, justifying why TravelAi acquired the brand name. This is a first for Sonder, let’s watch how this plays out.
Be Smart —
Buy Now, Pay Later (or BNPL) has fully infiltrated the travel sector — good news for the sector, yes. But lets remain smart, consumer debt is increasing steadily. I remain cautious to its frequency in our world — travel world that is. Debt can be acceptable when you the have cash to back up — but can the economy support that model any longer? Perhaps. Heck, I use my United Airlines credit card for dang near every purchase - why? — miles over everything. If I am ever faced with a choice between the 40 acres and a mule that the government owes myself via my ancestors or the miles equivalent to the such — please understand, I will require much time to think it over 😵💫 For each month, travelers are choosing to hold a debt that must be resolved before interest accrues. Reports show that consumer credits are winning the matches. Credit cards are old, relics of an aging generation. BNPL is groovy, funky, and rad 🪩 Travel is a luxury and more so than ever, travel is a statement and must be seen. Most aren’t flush with cash by the time their trip arrives and are financing their exploits. As said in Angelica’s article on PMIPT, ‘Don’t compare yourself to other travelers’ and if you fall for the social comparison - let’s be smart. Trina of CNBC breaks down your BNPL travel options effectively
Or Cheat —
Apparently, United Airlines (UAL) was seeking a merger with Delta Airlines (DAL) last year, 2025, sneaking around to create, potentially, one of the world’s largest airline. A potential market capitalization of $100B. Yes, you read that correctly that is a capital ‘B’. Had the the two firms truly exercise this merger, the new formation would have controlled greater than 50% of the US aviation market. Legal went to work and effectively determined that this merger would get swiftly rejected, even in the hands of this “deal-love making” administration. Soon reported, that United and Delta never proceeded with such an M&A. Can we ask — why United is desperately seeking a merger? United did attempt to purchase American Airlines recently and that deal was rejected by the same administration. Is Kirby purchase happy? I think so. “Look under the sheet of the US3” ~ (United, Delta, & America) is what I say although, I can’t find any meaningful figures pointing to any distress at United or the industry at large but perhaps rather Kirby is trying to buy or out bid any potential threats (industry or economic). Think Disney purchasing high value IPs (Marvel in 2009, Star Wars 2012) or direct competitor (21st Century Fox, 2019). Is this a cheat? — no, but United is certainly glancing around during the test. Folders up!
Well - that’s the first Margin Call till next week. Margin Call will be issued weekly on Tuesdays, found only on Pay Me in Plane Tickets!
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Enjoyable read. 👏👏👏👏