Jim Allen, Chairman of Hard Rock International, warned Thursday, the day after new inflation data was released, that the economic challenges “we have real ahead.”
Speaking on “Morning with Maria” on Thursday ahead of the grand opening of the Hard Rock Hotel New York in midtown Manhattan, Allen noted that inflation was a cause for “concern” as travel costs soared.
It was revealed on Wednesday that year-on-year inflation eased for the first time in months in April, but rose more than expected with supply chain restrictions, the Russian war in Ukraine and strong consumer demand that continued to keep consumer prices near the 40-year mark.
The Labor Department said Wednesday that the Consumer Price Index, a broad measure of the prices of everyday goods including gasoline, groceries and rents, rose 8.3% in April from a year ago, down from the 8.5% year-on-year recorded in March. . Prices jumped 0.3% in the one-month period in March.
Those numbers were higher than the 8.1% headline and 0.2% monthly gain that economists at Refinitiv had expected.
Inflation Rises 8.3% in April, Approaching Almost 40 Years
Air fares have gone up as more people start to travel: Prices are up 18.6% in the month and up 33.3% over the past year. This is the largest increase in a single month since the report began in 1963.
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Host Maria Bartiromo Allen, who is also the CEO of Seminole Gaming, asked if he was able to pass on higher prices to the consumer and whether he thought higher travel costs would affect people’s plans.
He replied “100% we have concern”. “I think if we look at our business segments, certainly the restaurants and hotel divisions and retail divisions, we have the potential to drive up prices.”
“But no doubt, I think this will have an additional impact on the last quarter of this year in the first and second quarters of next year,” Allen continued.
He went on to say that in terms of his casino business, “there is no ability to raise prices.”
“So certainly in this category we just have to, unfortunately, absorb the increasing costs of doing business,” he added.
“There is no doubt that it will have an economic impact on our business globally, and we are certainly prepared for that,” Allen continued, noting that “Hard Rock has been around for 50 years.”
“We hope that we can get through these difficult times, but I certainly believe that the economic challenges facing us are real,” he continued.
On Thursday, Allen revealed which hotels have performed well despite economic headwinds, noting that Hard Rock Florida properties “have done a pretty phenomenal performance.” He also noted that those in other countries around the world, especially in Europe, “certainly still face challenges.”
“The war in Ukraine with the Russian invasion undoubtedly had an effect not only there, but across Europe where we see people not traveling anywhere near where they used to, frankly, not just based on the challenges of COVID, but just the uncertainty so Now as it happens in the region.”
The new Hard Rock Hotel is located on the edge of Times Square, close to famous landmarks including Radio City Music Hall, Rockefeller Center and the theater district.
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“This brand new building in downtown New York is absolutely massive,” Allen told Bartiromo ahead of the hotel’s grand opening Thursday night.
“We view this facility as a leisure destination,” he added, noting “we really designed this hotel to be here for New Yorkers” as well as for meetings and groups.
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Megan Heaney of FOX Business contributed to this report.