business news in context, analysis with attitude

This commentary is available as both text and video; enjoy both or either ... they are similar, but not exactly the same. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

Hi, I'm Kevin Coupe and this is FaceTime with the Content Guy.

I was fascinated by a story in USA Today the other day that talked about how some CEOs - despite the fact that there seems to be less concern about a 2020 recession than there was just a few months ago - are already getting ready.

Some examples…

• "Choice Hotels plans to announce Monday that it’s launching a new mid-priced extended-stay hotel chain called Everhome Suites that it says can perform well even if the economy slows or heads south – a big drawing card for franchisees." The average room rate will be $85 a night, and the entry is seen as having real potential in a business where close to "20% of hotel stays are at least seven nights but just 9% of all rooms are in extended-stay properties."

• "OC Facial Care Center of Orange County, California, recently began offering a 30-minute version of its most popular 60-minute facial. The streamlined service cuts the price to $99 from $130 for members and to $150 from $350 for nonmembers."

• "Experi, a tour operator in Bainbridge Island, Washington, typically raises prices 5% to 10% a year … But the firm, which is now selling tours for 2021, is holding prices steady or reducing them in some cases." The reason? The company got killed in the last recession, and management - understanding that this particular boom has lasted 10 years - doesn't want to get caught again with its metaphorical pants down.

There are other companies cited in the story, from realtors to wifi providers, all of whom are working to be prepared.

I think this is smart, and not just because we talk a lot here on MNB about getting ready for the inevitable downturn that is coming.

I'm not trying to be Chicken Little here. Just realistic about how recessions are cyclical, and the current up cycle has been going on for some time. Add to that the enormous amount of student debt that has been racked up by younger consumers, and how this is affecting their ability to spend, and you have the potential of a real economic perfect storm just over the horizon.

One of the things that the companies mentioned in the piece seem to have in common is an understanding that even if the economy starts to wilt, their customers are going to continue to have aspirations. They're still going to want to travel or get facials or whatever. Consumers may have less money in a down economy, but they'll still have expectations, and the retailers that will be rewarded may well be the ones that have an aspirational approach to marketing their products and services.

I think this could be especially powerful for food retailers, who, if they're smart, will figure out ways to curate great food and great wine in a way that caters to reduced disposable income while still catering to great expectations and aspirations.

That's what is on my mind this morning. As always, I want to hear what is on your mind.

KC's View: