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The Coronavirus Economy: What social distancing means for a walking tour business



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Just over two decades ago, David Mebane founded Fat Tire Tours in Paris. The goal was to share with tourists the city he’d adopted as his own by way of two wheels, pedaling around the Eiffel Tower, along the Seine, and out to Versailles for picnics in the château gardens. Today, Fat Tire operates globally in 12 cities around the world, from London to Berlin to Barcelona in Europe to Washington D.C., Chicago, San Francisco, and New Orleans in the U.S.

The 44-year-old CEO has since based his company’s headquarters in Austin, where he lives with his wife and two kids. But Mebane travels the world regularly to maintain his role as the self-proclaimed “Chief Encouragement Officer.”

Fortune spoke with Mebane for a new series, The Coronavirus Economy, to ask about how COVID-19 has affected his employment status and his plans for the future, and to get a sense of how he has been handling this news, both emotionally and financially. The following Q&A has been condensed and lightly edited for clarity.

David Mebane founded Fat Tire Tours in Paris, to share with tourists the city he’d adopted as his own by way of two wheels.
Courtesy of David Mebane

Fortune: What’s a typical
day like for you?

Mebane: That’s a great question. I am involved somewhat in the operations, but only at a very high level. Several years ago, I put an executive team in place. I hold the CEO title, but the president handles the operations. We have a senior management team and so forth. I am much more of a 30,000-feet operator. I look at weekly metrics, forward bookings, ratings from our customers—things like that. I don’t get involved in the day to day. It’s much more strategic.

culture is very important to me, and we have a very special secret sauce at Fat
Tire, a very familial atmosphere. So maintaining that is valuable. I had a
heart attack in Paris, actually, at 39. As you can imagine, when that
happens—especially at such a young age with two kids—your concept and value of
time changes. We all know that time is our most precious commodity, but few of
us—and I’m raising my hand here, too—act on it unless we’re forced to. So I
spend a lot of time with the family. Fortunately, work does not have to be a
priority. Today, however, it is.

did you realize things were taking a turn?

It was gradual, but I don’t think I took real notice until the northern part of Italy was affected, probably about a month ago. I started talking to our Italian manager on a daily basis. I’d call him in the morning, my time, to hear what the word on the street was. Then I started to notice a trend in our bookings. Future bookings were starting to drop for April and May, and cancellations were coming in for March. And what we were seeing, up until last week, maybe, was a “wait and see” approach for existing bookings in April, May, even June and July.

it normally like this time of year?

work in a cyclical business cycle. Summer is high, winter is low. I would say
almost every tourism company operates at a bit of a loss in late December
through January and into February. Spring break is when we flip and start to
make money. That’s been the same way for 21 years.


We’re at our lowest point of cash reserves. So right when we really need and would expect revenue to start coming in there are no customers to be found anywhere on the planet! Since the entire world has shut town, San Francisco is giving no help to Berlin or vice versa. We don’t have anywhere to buoy. There is no rising tide to raise all boats. In fact, all boats are sinking. It’s a really precarious situation. Cash is king, and when you don’t have any or any expectation to get any, you have a real problem on your hands.

Fat Tire Tours operates globally in 12 cities around the world, from London, Berlin, and Barcelona to Washington D.C., Chicago, San Francisco, and New Orleans.
Courtesy of David Mebane

On March 13, you decided to shut down global operations for a month. What precipitated that decision?

The decision was made for us in a way. When the travel ban went into effect, I thought, “Well, if the airlines don’t fly, we don’t have any customers.” I think of it as hibernation. We’re the bear, and we have to dig in our cave and go to sleep. They do so to conserve energy. We’re trying to conserve money.

what measures are you taking to be able to reopen?

We’re asking people who booked and want a refund to consider 150% value instead. For example, if you booked $100 worth of tours, instead of refunding you the $100 we’ll give you an IOU for $150 to use in the future. Remarkably, a very high percentage of customers have gone with that option. It shows they have confidence in us, the future, and in travel. We’re hitting social media to encourage people to buy gift certificates that won’t have an expiration date.

are you doing internally?

We have gone into triage mode, looking into every single expense. We’re asking landlords for free rent. We’ve cut every employee we can—not because it makes me happy, but because I can’t pay them. Our go-forward plan is to be as lean as possible. Since no one knows anything about duration or government assistance, we are cutting in as deep as we can.

what are you working with?

The vast majority are our tour guides who are independent contractors. That’s about 90% of our staff [without work]. In eight of our 12 cities, we slimmed down to our general managers. The other four, including Paris, have additional people on contract since they’re part of larger operations. But everyone is working from home now.


the question. Can I pay the remaining salaried employees? Every Monday we have
a strategic meeting. Our goal is to keep every one of these operations and to
keep every one of our salaried employees. The realistic chance of that
happening is not good. Some of the operations that closed last Friday will not
open. Some people who are employed today will not be Friday of this week. It’s
not because I don’t love them, because I do. I just don’t have any money to pay
them. I’m feeding the company personally right now. It’s not technically my
responsibility, but I feel an obligation to do so. 

a business owner, how are you feeling, in general?

It stinks—and it stinks bad. People are going to lose their jobs if they haven’t already. They’re going to have trouble buying a metro ticket or groceries at Monoprix. The glass of wine you had yesterday is prohibitively more expensive today. Even if every nation quarantines, and we’re able to stop the spread—and I think that’s unrealistic—people aren’t going to rush to Europe the next day. It’s not like there’s a kink in the hose and you let out the kink and the water flies out the other end.

would need to happen in order for you to bounce back?

From a tourism standpoint, it would be wonderful if we can have the second half of the summer, like July and August. If we don’t, we fall into that low season cycle again. Then you’re already at a loss on a good year; this year would be even worse. I’m trying to plan for lack of success for a year from right now, and hope that spring break 2021 will be an opportunity to go back to work like we want to.

That being said, there will be massive attrition in the tourism industry. If there are 100 suppliers in Paris tourism today, there will be 50 or even 20 later. There will be less, but there will be opportunity for surviving companies to grow their market share and to potentially be more successful than they were before this happened. I would like to be one of those surviving companies.

More coronavirus coverage from Fortune:

How to get a refund on your Broadway tickets after the coronavirus shutdown
—The oil sector takes its next hit: The coronavirus on offshore rigs
—Some of the most extreme ways companies are combating the coronavirus
—How luxury designers in Italy’s fashion heartland are facing the coronavirus
—Amazon tells employees to work from home if they can. Warehouse workers can’t
—Why Dollar General thinks the coronavirus can help business
—The coronavirus may not be all bad for tech. Consider the “stay at home” stocks

Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus and its impact on global business.

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U.S. Futures Fluctuate, Stocks Slip; Dollar Jumps: Markets Wrap



(Bloomberg) — U.S. equity futures fluctuated and stocks slipped on Monday as investors weighed a weekend full of negative coronavirus news against the stimulus measures that triggered a bounce in risk assets last week. The dollar rebounded, Treasuries edged higher and oil sank.Contracts on the S&P 500 Index swung between losses and gains after President Donald Trump abruptly abandoned his ambition to return American life to normal by Easter. Abbott Laboratories surged in the pre-market after unveiling a five-minute coronavirus test. Shares in Europe followed earlier declines across much of Asia, though they came off their lows. The dollar was on course to snap a four-session losing streak.Core European bonds rose after the outbreak killed more than 3,000 in Spain and Italy over the weekend. Pessimism returned to credit markets, where the cost to insure high-yield debt jumped in both Asia and Europe, as Moscow and Tokyo joined other cities urging residents to remain at home. Brent crude extended recent losses and was set for its worst month in history, down about 54%.Investors are beginning the week digesting word that the biggest economy will stay crippled for longer after Trump heeded advice from the government’s top doctors that re-opening the U.S. in two weeks risks greater loss of life as the coronavirus outbreak accelerates. The president said in a news conference “social distancing” guidelines would remain until at least April 30, while his top infectious-disease expert said 100,000-200,000 may die.“Markets are still in uncharted territory,” said Medha Samant, director of investment at Fidelity International. “When you look at the stages of this pandemic, you’ve gone into escalation,” she said. “The epicenter has shifted to the U.S.”In the latest stimulus moves, China’s central bank lowered short-term funding rates and injected cash into its financial system, Australia announced a job-support program and limited public gatherings to just two people, while Singapore unveiled an unprecedented easing in policy.“The assumption that we can turn a switch in a month or two and everything is going to be okay is a faulty opinion,” David Kotok, chief investment officer at Cumberland Advisors Inc., told Bloomberg TV. “We are waiting to see the closer timetable of treatment, testing, and vaccine — that’s very important to us.”Elsewhere, Australian shares were the notable exception to broad declines, with the equity benchmark surging by a record thanks to the new stimulus measures. Emerging currencies including South Africa’s rand and Mexico’s peso tumbled amid concern about debt downgrades.Quarter-end strains could add to investor nervousness on Monday and Tuesday as financial firms rein in collateral lending to shore up balance sheets, while Japanese banks face their fiscal year-end. The MSCI gauge of global equities is down about 23% since the start of the year, on course for its worst quarter since the end of 2008.These are the main moves in markets:StocksFutures on the S&P 500 Index advanced 0.4% as of 12:27 p.m. London time.The Stoxx Europe 600 Index decreased 0.8%.The MSCI Asia Pacific Index dipped 0.9%.CurrenciesThe Bloomberg Dollar Spot Index jumped 0.7%.The euro declined 0.8% to $1.1048.The British pound decreased 0.5% to $1.2398.The Japanese yen fell 0.1% to 108.06 per dollar.BondsThe yield on 10-year Treasuries decreased two basis points to 0.66%.Germany’s 10-year yield decreased six basis points to -0.53%.Britain’s 10-year yield declined six basis points to 0.305%.CommoditiesGold fell 0.1% to $1,625.72 an ounce.West Texas Intermediate crude decreased 5.2% to $20.39 a barrel.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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Finding a middle ground to tackle the coronavirus crisis



Good morning.

President Trump’s talk of reopening the economy on Easter, which he has now backed off of, has helped launched an important debate. At the moment, we seem stuck between two unrealistic alternatives: 1) a quick return to work, or 2) a widespread lockdown until a vaccine is ready (a year or more in the future). Both alternatives could lead to social and economic breakdown. But no one has articulated a clear vision for what the reasonable middle ground would look like.

What might it look like? The elements of a possible strategy are beginning to emerge. It will probably involve a nationwide lockdown that lasts at least through the end of May. Then, the return to work needs to roll out gradually, and include the following elements: continued protection/isolation for vulnerable populations; continued restrictions on large gatherings; increased production of protective equipment and ventilators; some proven therapies for treating the most vulnerable; priority given to those who can’t work from home over those who can; staggered start times to minimize rush hour crowding; widespread and rapid testing so new infections can be spotted quickly; sharp restrictions on travel so new infections can be isolated and contained; and antibody testing so immune individuals can be identified. The world should be watching China, Hong Kong, Singapore and South Korea as they probe the parameters of such an effort—even though more democratic societies will struggle to mimic many of their less democratic tactics.

Government needs to lead this effort; but business plays a critical role.   Fortune will be holding a virtual gathering of members of its CEO Initiative tomorrow, to begin a conversation on this topic. I’ll have more to report on Wednesday.

In the meantime, former Honeywell CEO Dave Cote—who successfully navigated the Great Recession and added $60 billion to his company’s market value before stepping down in 2017—has some advice for CEOs in the midst of this crisis.  You can read the full interview here, but some excerpts:

Focus on leadership, not consensus. “What matters is getting feedback from all your people, then making a decision.”

Hope for the best, plan for the worst. “Pick a plan and start executing as if you expect the worst to happen.”

Keep workers around for the recovery. In the recession “we did very few layoffs… Instead, we relied on furloughs.”

—In a crisis, don’t take a bonus. “When workers asked me if I intended to take a bonus for 2009, I’d say that was up to the board… That was a big mistake.”

More news below.

Alan Murray

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Kumu’s KC Montero on creating quality online content



Earlier this year, KC Montero took on the role of Head of Content at KUMU, the fastest-growing social media app in the country.

Perhaps best known as MTV’s longest-running VJ, KC’s career includes billings as host and producer on a number of shows like Celebrity Car Wars, Survivor Philippines, Discovery Channel’s Worst Vacation Ever, and GOOD TIMES on Magic 89.9. While KC’s star power and marketing talent are undeniable, what helps KC perform in the boardroom is his unique brand of creativity that ensures content on the app stays relevant to a young mobile audience.

As KUMU’s head of content, KC often gets asked, “what is good content?” It’s a question he thinks is fundamentally misguided.

“The term “good content’ can be used in such a broad sense,” he said. “Some would say that if you can watch a piece of content from start to finish, that it should be considered good content. That isn’t totally true because what’s inside that content can captivate you and keep your attention for three minutes but it doesn’t mean, to me, that it’s any good.”

KC believes audiences today want more than just flashy visuals, catchy wordplay, and a coherent aesthetic. What they’re looking for, he says, is something that makes them feel good about themselves.

“I like to use the phrase “quality content” which means that it’s thought-provoking, entertaining, and leaves you with a positive feeling,” KC said. This triumvirate guides every bit of programming KC oversees at KUMU, from the messaging to the technical executions—everything is designed to maximize quality.

The KC recipe for effective content

KC shares these three useful insights to aspiring content creators on how to keep things creative, dynamic, and worth sharing:

  • If it’s a long video, make sure you show a quick look at what happens in the video right away. You have to grab attention as fast as possible.
  • Get close. The closer the subject is, the closer the audience feels, but don’t overdo it. No one wants to see your pores.
  • Know your audience. Know what makes them tick and play into their wheelhouse.

Pushing innovative technology

More than any other device in history, smartphones are the most immediate, on-demand platforms for content consumption. With livestreaming, the bridge between consumption and creation has narrowed nearly to non-existence.

For the team at KUMU, it’s an inmate understanding of the relationships between platform, product, and people that guide their growth into everything from arts to online marketplaces.

This formula proves to be effective as KUMU now engages more than three million Filipinos around the world with its online contests, game shows, celebrity live streams, live e-commerce, and just recently audio streaming features.

“I think that content is really only bound by technology and how it’s delivered,” KC said. “I think at the moment, we’re on the cusp of an e-commerce boom and the faster and closer you can get to humanizing your process the more success you will have.”

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