Tilman Fertitta says client spending will proceed to be robust even after the incentives put on off
Tilman Fertitta, Chairman and CEO of Landry, told CNBC on Tuesday that he expected consumer spending to remain strong for the remainder of 2021, even as the initial boost from the Covid stimulus wears off earlier this year.
In an interview with Power Lunch, the billionaire restaurateur and casino operator said tax refunds to Americans and payouts starting for the newly created upfront child tax credits will provide a tailwind.
“You will likely continue to see money pouring into the economy for the rest of the year,” said Fertitta, whose sprawling hospitality empire gives him an in-depth look at how Americans spend money.
“Then I think we’re going to lose some of those consumers, but we’re going to start taking back the business customers and the conferences and the big party rooms in New York and LA and all your big cities,” added Fertitta, noting that he still believes the US economy “is really headed for another Roaring Twenties for a while”.
As the US economy recovers from the pandemic stalemate and more Americans are vaccinated, consumers are recovering on a large scale.
In mid-June, Bank of America CEO Brian Moynihan told CNBC that consumer spending at that point this year was 20% higher than it was in 2019. Moynihan noted that stimulus money was a factor in the spending numbers, those based on transaction volumes through its customers’ debit and credit cards as well as through the cellular payment network.
Right now, said Fertitta, the Houston-based Landry’s group’s more expensive restaurants see a distinct strength.
“The funny thing about consumers is that they like the high-end. It’s the high-end steakhouses, the high-end seafood restaurants, ”said Fertitta. “It’s not yours [Rainforest Cafes] and your bubba gumps. it’s your Mastro and … your Morton. “All four of these restaurant brands are under the Landry umbrella.
Fertitta said rising oil prices are one thing to watch because it can affect how Americans spend their money. On Tuesday, West Texas Intermediate crude oil futures hit levels unheard of since November 2014, trading just under $ 77 a barrel before turning negative in the session.
The current national average in gas prices is $ 3.134 per gallon as demand for pandemic-era reductions increases, according to AAA. At that time last year, the national average was $ 2,180 per gallon.
“Then the consumer starts looking, ‘If I pay $ 5 for gasoline, I might not be able to shop at a restaurant or I might not make it all the way to a casino,’ so it can have a huge impact on us,” said Fertitta . “But then the flights go up, maybe people go to closer places. And that’s how I’ve seen it help us when the gasoline goes up, and I’ve seen it where it hurts us. “
It is too early to say what will happen this time, he said, “but you cannot have inflation and everything at the same time.”