BUSINESS

Some hotels charge visitors for bad reviews

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TRAVELLERS have grown accustomed to annoying hidden fees, from the baggage charges that bring airlines tens of billions of dollars a year to the resort fees that account for nearly a fifth of American hotels’ revenue. But a new one that has popped up in recent years might be the most irksome of all due to its sheer perversity: fees for leaving bad reviews.Last March, a couple arrived at the suite they had booked at the Abbey Inn in Indiana only to find, they claim, a dirty bed, a foul smell, an insect infestation and no hotel employees on the premises to assist them. Upon leaving, they did what so many travellers do these days. They wrote an online review warning others about the hotel’s shortcomings. Sometimes, negative reviews prompt apologies and compensation from their subjects. But in

Financial regulators too often think “this time is different”

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FOR a phenomenon with such predictably bad outcomes, a financial boom is strangely seductive. Not a decade after the most serious financial crisis since the Depression, the world watches soaring markets with a mixture of serenity and glee. Natural impulses make finance a neck-snappingly volatile affair. Governments, though, deserve heaps of blame for policies that amplify both boom and bust. As regulators begin picking apart reforms only just enacted, it is worth asking why that is so.Finance is hopelessly prone to wild cycles. When an economy is purring, profits go up, as do asset values. Rising asset prices flatter borrowers’ creditworthiness. When credit is easier to obtain, spending goes up and the boom intensifies. Eventually perceptions of risk shift, and tales of a “new normal” gain

Droughts, storms and global demand tests America’s love affair with avocado

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Looking for the last avocadoALTHOUGH New Yorkers are not renowned for their patience, they do not seem to mind waiting their turn for a fresh serving of avocado. At Avocaderia, which claims to be the world’s first avocado bar, in Brooklyn, long queues stretch from the counter outward into a large food hall.The venue’s popularity is a sign of the times: the avocado is fast becoming America’s favourite fruit. Although domestic production has stayed flat, imports have more than trebled over the past ten years, according to the Department of Agriculture. It estimates that the annual consumption of the average American has increased from about one pound (0.5 kilograms) in 1989 to more than seven pounds in 2016; total consumption that year weighed in at 2.3bn pounds.America’s enthusiasm for avoc

Morgan Stanley’s unexciting model takes the prize on Wall Street

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MORGAN STANLEY emerged in 1935 out of a global financial disaster, as one of Wall Street’s leading firms. In a rare shred of consistency in America’s turbulent markets, history has repeated itself. But it was a close call. An ill-timed infatuation with debt ahead of the 2007-08 financial crisis threatened to add it to the industry’s towering funeral pyre, which consumed all its big competitors with the exception of Goldman Sachs.Of the two, Morgan Stanley came out of the crisis the more tarnished, less for what it did than for what it was: less profitable; less connected, through its former employees, to political power; and less respected for having evaded disaster. But after the release of financial results from the fourth quarter of 2017, Morgan Stanley’s valuation has surpassed Goldman

Richemont, the world’s second-biggest luxury firm, bets on digital

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Clickbait for plutocratsA YOUTUBE video featuring a woman sporting a gold watch and driving a convertible, which has been viewed online nearly 5m times. A social-media “influencer” with more than 11m followers on Instagram posting photos of herself wearing the same timepiece. A limited flash sale of the watch on Net-a-Porter, a website.Purveyors of pricey jewellery and watches have been slow to embrace things digital. But last year’s social-media campaign to relaunch Panthère, a watch made by Cartier, a French jeweller, is evidence that they are waking up to the power of the online world. On January 22nd Richemont, a Swiss luxury conglomerate that counts Cartier among its brands, offered to buy the shares it does not already own in Yoox-Net-a-Porter group (YNAP), a leading luxury online re

Direct-lending funds in Europe

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WHEN Caronte & Tourist, a Sicilian ferry company, needs a new ship, it is cheap and easy to borrow from a bank. But in 2016, when Caronte’s controlling families wanted to buy back the minority stake held by a private-equity firm, banks balked at the loan’s unusual purpose. Edoardo Bonanno, the chief financial officer, also worried that the €30m ($33m) in extra bank debt might make shipping loans harder to obtain from them in future. So he turned instead to a direct-lending fund run by Muzinich & Co, an asset manager.Such funds are only about a decade old in Europe (and not much older in America, where they started). Assets under management at Europe-focused funds increased from a mere $330m at the end of 2006 to $73.3bn by mid-2017, which includes $27.9bn of “dry powder”, or funds yet to b

WhatsApp: Mark Zuckerberg’s other headache

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“THERE’S too much sensationalism, misinformation and polarisation in the world today,” lamented Mark Zuckerberg, the boss of Facebook, recently. To improve things, the world’s largest social network will cut the amount of news in users’ feeds by a fifth and attempt to make the remainder more reliable by prioritising information from sources which users think are trustworthy.Many publishers are complaining: they worry that their content will show up less in users’ newsfeeds, reducing clicks and advertising revenues. But the bigger problem with Facebook’s latest moves may be that they are unlikely to achieve much—at least if the flourishing of fake news on WhatsApp, the messaging app which Facebook bought in 2014 for $19bn, is any guide.In more ways than one, WhatsApp is the opposite of Face

Monetary policy suffers a shortage of central bankers

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IN THEIR quest to stabilise the job market, central banks are setting a bad example. Jerome Powell, whom senators this week confirmed as the next chairman of America’s Federal Reserve, will lead an institution with three existing vacancies on its seven-member board, and a fourth that will open up imminently. Not since July 2013 has its rate-setting committee boasted the full complement of 12 voting members.This monetary undermanning is, however, much worse in Nigeria. Its monetary-policy committee was unable to meet as scheduled on January 22nd-23rd because it lacked the six members necessary for a quorum. Five recent nominees still await confirmation by the country’s Senate. The chamber is holding up all but a few executive appointments in retaliation for President Muhammadu Buhari’s fail

How microcredit can help poor countries after natural disasters

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Small pots of liquidityBOTH, in different ways, worry about liquidity. And global warming may, indeed, be bringing meteorologists and financiers together. On January 18th, VisionFund, a microlending charity, and Global Parametrics, a venture that crunches climate and seismic data, launched what they billed as the “world’s largest non-governmental climate-insurance programme”. The scheme will offer microfinance to about 4m people across six countries in Asia and Africa affected by climate-change-related calamities.Natural disasters are becoming more frequent and severe. They disproportionately affect poor countries, where many eke livings from vulnerable agricultural land. Yet it is often in the aftermath of disaster that credit is hardest to obtain. As non-performing loans rise and the per

GM takes an unexpected lead in the race to develop autonomous vehicles

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GENERAL MOTORS reveals barn-sized truck at Detroit motor show. What else is new, you might now ask. But the launch on January 20th of the Chevrolet Silverado, a pickup that will go on sale at the end of the year, highlights a surprising turnaround for America’s largest carmaker.The good news is not just the Silverado’s outsized margins, which are important for a firm that relies heavily on trucks—after Mary Barra, GM’s boss, gave an ebullient performance at an investors’ conference that coincided with the motor show, the release of GM’s quarterly results on February 6th are likely to include record profits. It is also that the money thrown off by vehicles such as the Silverado will help the firm navigate the tricky terrain that lies ahead of all the world’s big carmakers.One task is to ens