Snap Breaks Earnings Curse & US Soft Landing in Trouble?

This episode discusses Snap's surprising earnings success and broader economic concerns in the U.S., particularly focusing on big tech investments in AI and the shaky concept of a "soft landing" in economics.

1. Major tech companies are heavily investing in AI, but only Microsoft shows immediate business benefits.
2. Snap's earnings outperform expectations, suggesting a potential upswing if TikTok faces U.S. restrictions.
3. The U.S. economy's growth has slowed, raising doubts about the Federal Reserve's ability to manage a soft landing.
4. Persistent high inflation coupled with slower growth could lead to sustained high-interest rates.
5. Economic indicators suggest a cautious outlook, with potential impacts on consumer spending and overall economic stability.

1: AI Investments and Tech Earnings

The hosts discuss the heavy investments in AI by Meta, Alphabet, and Microsoft and their varying degrees of success in leveraging these technologies for business gains. Key points include Meta's future-focused spending and Microsoft's realized gains from AI. Neil Freiman: "AI investments are boosting our business right here, right now."

2: Snap's Earnings Surprise

Snapchat's earnings are highlighted as a significant positive surprise, breaking from several quarters of mediocre results. The discussion centers on Snap's potential to capitalize on the U.S. market if TikTok is banned. Toby Howell: "Snap is playing at just a much smaller level than everything that we mentioned in the big tech world."

3: U.S. Economic Outlook and Soft Landing

The episode concludes with a deep dive into the current U.S. economic conditions, discussing GDP growth, inflation rates, and the Federal Reserve's challenges in achieving a soft landing. Neil Freiman: "We're still chugging along. The economy is doing fine."

1. Diversify Investments: Given the uncertain impacts of AI on big tech's bottom line, diversifying your investment portfolio can mitigate risks.
2. Monitor Tech Innovations: Stay updated on AI developments, as these can significantly impact market dynamics and investment opportunities.
3. Evaluate Economic Indicators: Keep an eye on GDP and inflation reports to gauge economic health and adjust financial strategies accordingly.
4. Prepare for Interest Rate Fluctuations: High inflation may keep interest rates elevated; plan personal and business finances with this in mind.
5. Optimize Business Spending: Companies should scrutinize capital expenditures, especially in emerging technologies like AI, ensuring alignment with long-term strategic goals.

Episode 310: Neal and Toby recap the standout performances from the Meta, Microsoft, Alphabet, and Snap earnings this week. Then, the latest report on the US economy may show signs that the “soft landing” everyone was hoping for is looking more and more unlikely. Next, Chipotle is this week’s stock of the week while Southwest takes the title of dog of the week. Also, Oracle moves its headquarters to Nashville, leaving Austin behind. Lastly, Venice introduces a tourist entry fee to stop overtourism but its local residents aren’t very happy with it.

People

Neil Freiman, Toby Howell

Companies

Meta, Alphabet, Microsoft, Snapchat

Content Warnings:

None

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Neil Freiman
I'm Neil Freiman. And I'm Toby Howell. Today, big tech companies have gone all in on AI, but are they seeing any benefits to their actual business? Then we found the one item where customers seem immune to price hikes. Chipotle burritos.

Toby Howell
It's Friday, April 26. Let's ride.

So based on the pictures you guys tag us in on social media or send our way in our inbox. A lot of you listen to this show while sipping on your morning brew. Maybe you're a tea person. Maybe coffee is your thing. But one thing is for certain, you're probably drinking it out of a mug.

Neil Freiman
And we fully encourage pairing morning brew daily with your daily morning brew. But there is a way to make the experience ten times better. What if you could also drink out of a morning brew daily mug? That's right. Next week we are releasing an MBD branded mug.

Toby Howell
Neil and I got to work with our design team to bring this your way. How would you describe the final product? Neil? I'm no art critic, but it's maybe minimalist with a pop of color. It really captures the essence of this show.

I love it. It's got one of my favorite phrases on it as well. We're pumped to get this mug in your guys hands. Hit them with the details. Well, the mug drops in the morning brew shop this upcoming Wednesday and you can find it at shop dot morningbrew.com.

We'll remind you again next week. But get excited, people, because I'm excited. Now let's hear a word from our friends over at Robinhood. We've talked so much about tools and strategies when it comes to Robinhood, but let's get back to why you invest in the first place. You might invest because you want your money to do some of the work for you.

Neil Freiman
How do you get there? That's up to you. Maybe you like picking individual companies you believe in or brands you like. Or maybe you're an ETF person who likes a broader investment in a certain sector. Or maybe you've just got retirement on the mind and you want to try to optimize your tax benefits with accounts like iras.

Whatever your strategy is, letting your cash do the work for you should always be the goal. Even uninvested cash just sitting around in your brokerage account. Robinhood Gold offers 5% Apy on that. Just make sure you come in with an attitude of patience, because even though cash is king, patience is a virtue. Learn more about the Robinhood app in the App Store or Google Play Store.

Disclosures investing is risky and returns are not guaranteed. Investors should consider the investment objectives, risks, and charges and expenses of any ETF carefully before investing. Be sure to review a prospectus before investing. More information in the description of this podcast tech companies have talked a big game about infusing their products with AI. But have the most famous two letters in the world had a tangible impact on their business?

Have any of those little AI seedlings actually borne fruit? We found out this week when Meta Alphabet and Microsoft reported their earnings, and it was a mixed bag of apples. For Meta, at least, any significant benefits from AI seem to be years out. Zuck asked for patience on his earnings call, telling investors that while AI is the future, he's got to spend money to make money. And they did not appreciate when Meta said it would need to spend an additional $5 billion on capital expenditures, more than predicted.

So they sent the stock down 11% yesterday in a major wipeout. Other than that, though, Meta's business seems to be on solid footing, posting its highest first quarter revenue ever. Yeah, this was all, the stock drop was all about the future. Because, you're right, their actual quarterly performance, they crushed it. They had one of their best quarters ever.

Toby Howell
But looking ahead, people are just a little beaten down from Zuck's head on plunge into the metaverse, and now here they are saying that they're going to plunge even more money into developing AI. So it was a little confusing to me to see this much of a reaction, because we knew this was coming. Like, we know Meta is investing heavily in these future technologies. I think the timeline and the sheer amount just got people a little nervy. Right?

Neil Freiman
And if AI is anything like the metaverse, then Meta is going to lose a lot of money on it. Now, while there aren't any tangible benefits, because the metaverse unit, the reality labs, which houses its, its, its headsets and all of its AR and VR stuff, I mean, it lost $16 billion last year, and there's really no road to major revenue growth there or any tangible significant revenue impacts for the business. So if, if AI is anything like the metaverse, then the investors are not going to see Meta make actual money from this until years out, if any time. Some analysts covering the stock boiled it down to this, they said, without sounding overly religious, you either believe in Zuck or you don't. And we do.

Toby Howell
So that is really what it comes down to. Do you think that Zuck can pull off and orchestrate yet another big platform shift when it comes to tech, which is what he's been doing for the last however many years he's been at the helm? So without sounding overly religious, it's either Zuck or not. That's, that's their perspective on Meta. Let's move on to Google's parent company, Alphabet, which reported yesterday, a day after Meta's Whopper and really changed the vibes in a positive direction.

Neil Freiman
Shares soared after the company posted strong growth and announced its first ever dividend to butter up investors. Google seems to be chugging along as it always has, even as AI threatens its dominant search engine. Overall revenue was up 15%, its fastest rate of growth in two years, and YouTube sales growth top 20% for the first time since 2021. A site for sore eyes like meta, Alphabet is also spending gobs of money on building data centers to power AI. It recorded $12 billion in capital expenditures in Q one, a 91% increase from the same period last year.

Toby Howell
Yeah, it almost had a mirrored quarter from, from meta because it was more about the immediate future, like issuing a dividend for the first time. That is something that returns money to shareholders in the immediate future. That $70 billion share buyback plan is also something that hopefully increases the value of the shares that current shareholders are holding. But it is ironic too, because the narrative just a few months ago and even today, was that Google was kind of boofing it when it comes to AI. Remember the Gemini mess up when it was generating those historically inaccurate images, then even stuff leaking about its Mountain View campus having poor wifi?

It did look like Google was dropping the ball here, but clearly they've got their act together and there's just a very clear path towards monetizing AI in a way that meta does not have. Right? But right now, I mean, Google did say that there's no real impact of AI on its business, but it does have this cash cow with YouTube and search that it can always fall back on that also medicine as well, with all of its, with all of its social media platforms. Microsoft is the one company whose AI seeds have actually yielded a bounty. Sales from its huge cloud computing unit, Azure grew 31%, with a fifth of that coming from generative AI services.

Neil Freiman
Remember, Microsoft has a tight relationship with OpenAI and has begun selling its productivity suite with AI tools. So for $30 a month you can do things like transcribe virtual meetings in teams or summarize documents in word, or create emails by snapping your fingers in Outlook. Companies seem to be scooping that up for their employees. With AI subscriptions growing 15%, Microsoft maybe the only big tech firm that can actually look investors in the eye and say yes, our AI investments are boosting our business right here, right now. They've invested extremely heavily.

Toby Howell
They obviously shelled out a big chunk of chains to get that stake in OpenAI, so it does make sense that they're further along in this evolution. I'm also pumped for their launch of what they're calling AI PCs, which are powered by these latest Qualcomm chips. They think that this could be like the biggest cpu shakeup since Apple released its own chips. So there are things that they are doing right now, but also in the near future that makes investors think that Microsoft's the most mature AI company at this point and nothing in this quarter did anything to dissuade that opinion. If we have to sum up Meta, Alphabet and Microsoft in two words, it wouldn't be AI to me, it would be capital expenditures.

Neil Freiman
These companies are spending tens of billions of dollars a single quarter to invest in the infrastructure that is needed for AI. So that is where all this money is going. They're spending so much more money. Alphabet capex up 91%. Microsoft capex will increase materially.

Meta is spending $5 billion more than expected, so these companies are writing huge checks to build a infrastructure. Finally, while we're on the topic of tech, let's give a round of applause to Snapchat, which posted awesome results. Last quarter, sales jumped 21% and crucially, its tick tock competitor spotlight grew 125% year over year. And that'll be the focus now that the US is trying to boot TikTok. If it isn't sold, Snap could be a main beneficiary if tick tock users are looking for somewhere else to spend some time.

Toby Howell
Yeah, snap is in its own little world. But listen, you do have to give it a round of applause because it's coming off six straight previous quarters where it had single digit growth or sales declines. So whenever you post a surprising sales increase or something, the market does go go nuts for you. And you're right, Snap is playing at just a much smaller level than everything that we mentioned in the big tech world. But these little inklings of potentially it could benefit from that TikTok ban.

It's got this nice subscription business that grew 194% Snapchat plus year over year. So there are signs it's just kind of turning the ship around at a much smaller scale. Yes. I mean, Snap never really had an issue with having a lot of users. It has 422 million daily active users in Q one, and that is a huge social media platform.

Neil Freiman
The problem for Snap has always been making money and monetizing its users, getting that ad platform to really sing and work. Well, if it can do that, it could make itself into a nice little social media business. Let's zoom out to the macro picture now. The soft landing that Jerome Powell and the Fed have been trying to orchestrate for the economy just hit some unexpected turbulence. Here's why the captain might be recommending we put on our seatbelts shortly.

Toby Howell
Remember, a soft landing is a term for when you reduce inflation without causing a recession. It's a tightrope walk with not a lot of margin for error. And recent economic data has shown some cause for concern. The headline number that has everyone a little nervous is that the US economy grew at just a 1.6% annual rate in the first quarter of the year, a sharp slowdown compared to last quarter's growth rate of 3.4%. But wait, Toby, don't we want the economy to cool a little bit?

Yeah, but not quite that much. Projections were hoping for 2.4% growth. And when you combine slower GDP growth with multiple hotter than expected inflation readings in a row, capped off by another higher than expected 3.7% rise in consumer prices this past quarter, you start to see why Federal Federal Reserve policymakers are getting nervy. So what does this mean for you? Well, it might mean higher interest rates for longer, because inflation is that stubborn back pimple on the economy that won't get any smaller.

Which is exactly what we needed to do in order for the Fed to cut rates. Yeah, I mean, slower growth by itself is not bad. We want to see moderating growth so prices come down. The problem is prices aren't coming down. That is the worst of both worlds, because you have slower growth.

Neil Freiman
GDB coming in a little lower than expected, while not alarming in and of itself. That's fine. We're still chugging along. The economy is doing fine. But the problem is that consumer prices rose 3.4% annually in the first quarter.

So combined with higher inflation and slower growth, that's kind of the opposite of what the Fed wants to see. So what did everyone do yesterday? They dialed back their interest rate cut expectations yet again. We were going into this year expecting six or seven interest rate cuts. Now the smart money is that there won't be an interest rate cut at all until at least the fall November, and maybe we won't even see one for the entire year.

So there's been a huge sea change that's going to affect everything. Ten year yields, which track interest rates, jumped. That means borrowing costs for everything from credit card loans to buying a house to just everything that you need to borrow money for is going to remain super high for the remainder of this year. Right. And Jerome Powell has said previously that he does think that growth can run at a faster rate.

Toby Howell
It's all right if the economy is running a little hot. Thanks actually to we've had a very strong labor market, we've had a very strong labor supply. These have been things that Jerome Powell has been beating this drum of like, yes, it's okay if we're running a little hot as long as those prices come down. But you cannot have both happening at the same time. You do not want to slow down in the economy and still high inflation.

Jamie Dimon, JP Morgan CEO, has been beating kind of this warning drum for really the past month. In his letter to shareholders, he cautioned against too much optimism. And then in a recent video he said market is pricing the odds of soft landing at around 70% right now. But he thinks it's closer to half of that. And his reasons are he doesn't like staring down this massive fiscal deficit that we've had.

He also just looks at the geopolitical scene and says this is more cause of her concern than the market is pricing in. So he basically just said, don't get lulled into a false sense of security here. We're not through that final mile of getting inflation down. I'll end on a positive note because why not? But the US economy has now grown after this past quarter, it's grown for 48 straight months, which is divide by twelve.

Neil Freiman
That's four years. So the US economy is still doing really well. And now it accounts for 26.3% of all global gross domestic product, which is the highest in almost two decades. So the US economy is still growing at a much faster clip than its peak years, which you could say is maybe not a good thing because our allies and our peers around the world buy stuff from us and, you know, one plus one equals three in the entire global economy. But the US economy is growing at a much faster rate than anywhere else in the world and it has been growing for four years now.

Toby Howell
Up next, we turn our attention towards the markets for your weekly dose of stock of the week. Dog of the week.

Hey, Neil, what's your favorite part of a road trip? Hmm, that's a tough one. Probably queuing up the perfect playlist before I hit the wide open road. What about you? Honestly, I like to kick back and play a video game.

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Neil Freiman
Oh, nice. Does it work in rural stretches? For sure. At and t actually covers more roads than any other carrier based on on independent third party data. It even powers features like real time gps and voice assistant.

Toby Howell
And it works outside your car, too, if you wanna get a little tailgate action going or something. Sounds awesome. So where can I go to add some wifi to my wheels? Head over to att.com incarwifi. That's att.com incarwifi.

Less is more. Am I right, Neil? When it comes to caffeine, heck no. But if you're talking about digital platforms. Then definitely correct on both counts.

So it makes sense that Netsuite by Oracle is the number one cloud financial system. It streamlines accounting, financial management, inventory and hr into one platform and one source of truth. I bet all that consolidation helps you reduce it costs, improve efficiency, and cut down on manual tasks. Right again, Neil. And these days, when everything seems more expensive, that's a huge deal.

Finding ways to cut costs and boost performance at the same time is a no brainer. 37,000 companies have already graduated to Netsuite, and by popular demand, it's extended its one of a kind, flexible finance program for a few more weeks. Get in on the opportunity. While it's still here, go to netsuite.com brew. That's netsuite.com brew.

It's stock of the week, dog of the week time, where Neil and I comb through the stock market and pluck out one stock that has a nice aura to it and one stock where the vibes are just way, way off. Neil, brutal loss for you today in the pre show slam poetry contest. So I'm up first, and my stock of the week is Chipotle. I may not be able to pronounce it very well, but it's doing just fine without me. Chipotle keeps raising prices, and you all keep buying.

It's increased prices six times since 2021, but it hasn't hurt sales. Store traffic increased 5.4% from a year ago, which, combined with an average check size that was up 1.6%, means same store sales rose a healthy 7%. It's currently on a Scotty Scheffler Nelly Corda esque hot streak, reporting better than expected earnings for four straight quarters now. Neil, the stock is up 6% last week and 59% in the last twelve months, compared to an S and P 500 index of us restaurants that has been flat over the same time. What's behind this inexorable march?

Higher. Call me crazy, but it might be time to start talking about Chipotle in the same breath as McDonald's and Starbucks. I mean, what do you think? It's really. It's one of the fastest growing restaurant chains now.

Neil Freiman
It's opening up 300 new locations this year. It has 3500, 3500 locations currently in North America, and it's planning to double that to 7000. So it's on an absolute heater. Yes, very Nelly Corda Scotty Scheffler like. And it just people.

It has this brand loyalty that keeps people coming back. It has high income consumers. It can appeal to a wide variety of customers. Whether you're trying to go on a particular diet that's very customizable so you can go in and get exactly what you want to eat. It is just an amazing growth story.

Toby Howell
Right? And we've been seeing these headlines that it's millennials and Jim Bros. Kind of pushing this stock ever higher because Chipotle's customers are this very unique blend. They're usually affluent, they're usually health conscious. Their customers are 20% more likely than the average US consumer to earn more than $125,000 a year.

So they are less affected by these price hikes that we've seen eat into the profits of every other restaurant, like the McDonald's of the world. So it is just kind of occupies this very interesting niche within the restaurant industry that makes it weather these price hikes better than other companies. Yeah. And it has. It had some marketing tactics that also helped it the previous quarter introduced this limited edition chicken al pastor, which was selling so well that the company instructed its employees to not use chicken in their meals that they make for themselves because they had to save it for the customers and there wasn't enough chicken Alpa store to go around.

Neil Freiman
That actually drew a huge outcry over the past week. So after that, Chipotle came and said, okay, okay, you can have chicken because we don't want, really want this controversy. But that just speaks to the high demand for these particular menu items that they're rolling out and are hugely popular. And their other kind of marketing hack that they figured out is that they added barbacoa to their menu and a lot of people didn't know what barbacoa was, so they added the words braised beef in front of it. So now it's braised beef barbacoa, and now it's one of its best selling meats.

Toby Howell
So it is interesting the leverage that you can pull to really increase sales. My dog of the week is southwest, because it's really not a great time to be an airline that exclusively flies Boeing 737 planes. The company's stock fell 7% yesterday after announcing it was cutting costs and pulling out of some airports as it grapples with higher expenses and delayed deliveries from a struggling Boeing. So southwest expected to get 79 new planes from Boeing this year. But now, after Boeing's Alaska Airlines door panel fiasco and the ensuing fallout, it's expected to receive just 20.

Neil Freiman
That, and other headwinds are sending its growth plans into reverse. Southwest rarely pulls out of markets, hasn't done that since 2019. But it's getting out of four cities, including Syracuse and Cozumel, Mexico, to adjust to its new reality. And finally, Southwest teased what would be its biggest change in years, scrapping its single class open seating cabins to drive more revenue. First class on Southwest?

It just doesn't sound right. Doesn't sound right. If the toxic relationship between Boeing and Southwest makes me lose the amazing southwest seating arrangement, I am going to be very, very mad. But you're right, this relationship with Boeing has a lot of second order effects. Less planes means less fights, less revenue.

Toby Howell
But it's also left Southwest very overstaffed, on the hook for a higher cost. So even though these Boeing delivery setbacks, they're trying to paint the picture that, like, no, we're not at the mercy of Boeing. We still control our own fate. They kind of are at the mercy of Boeing at, to a certain extent. And it's, it's a little crazy that Southwest has maintained that particular single class seating arrangement for this time because you, all you have to do is flick a switch and you make a lot more money.

Neil Freiman
I mean, it's pretty clear you can upsell people. Every single other airline does it. You, when you book a flight, you get hit with the screen that says, do you want to upgrade your flight to $20? Do you want various seating classes? And, you know, eight airlines made $4.2 billion on seating fees in 2022.

So it seems to me like it's just a matter of time before Southwest looks at its balance sheet and says, okay, where can we move things around to make this look a little bit better? Well, we can start charging for seats. The one thing that they said is off the table is charging for bags. Bags will still fly free at Southwest. Like a bachelorette group chat, Oracle is planning a trip to Nashville.

Toby Howell
It's currently header headquartered in Austin, Texas, which is in line with what a lot of trendy tech companies who absconded for their Silicon Valley roots decided to do. But now it's heading even further east towards better country music and better vibes. In a move that has shocked many, Oracle is making the leap to get closer to the healthcare industry, but also to offer its employees a better lifestyle, according to its founder, Larry Ellison. Ellison said Oracle surveyed employees and they said they wanted to live in places that were good for raising a family and had a vibrant culture. Nashville checks those boxes, but let's not get it twisted.

There's a significant business reason as well. Healthcare is a big deal in Nashville. The industry employs more than 300,000 people and adds $68 billion to the region's economy. And given Oracle's $30 billion deal to buy the electronic medical records company Cerner back in 2021, it clearly sees healthcare as a driver for cloud computing growth in the future. So much so it's willing to shift its hq to a healthcare hotbed.

What's Austin's loss? Is Nashville's gain? Big loss for Austin, big gain for Nashville. Oracle is a huge company, but you said it. I mean, if you want to be in the healthcare industry, want to be a leader in the health care industry, you have to have a presence in Nashville.

Neil Freiman
It has HCA Healthcare, which was one of the first for profit hospital companies in the US. It's one of the largest owners of hospitals. It has created this ecosystem that is absolutely booming. When you think of Nashville, maybe you think of country music, maybe you think of Vanderbilt, but if you actually go and look at the logos on all the office buildings and talk to the people and say, hey, what industry are you working? Are you working in?

I mean, healthcare is huge, but it is a big loss for Austin, and they were blindsided from this. They said, hey, city hall wasn't. Wasn't aware of this. And for a city that had seen so much growth and so much corporate relocations since COVID over the past few years, it's come to a shock that. That they're, you know, their glow has maybe worn off a little bit.

Toby Howell
Right. It was definitely a shock. Until recently, there wasn't really any controversy between these two cities because Austin was just clearly doing a lot better. At the end of 22, Austin's economy was almost 20% bigger than Nashville's $222 billion economy. But.

But all of a sudden, this rivalry has popped up. Austin is still doing okay, though, and better than most. 3.5% unemployment rate. It's below the national average. If you just look at the skyline, it's full of these construction cranes.

Samsung is opening a $17 billion plant nearby in the suburbs, and it plans to invest $40 billion in the area, so. And it still has the metas, the apples, the googles of the world have presences there. So it's not the end of the world for Austin. But I do kind of like this rivalry that's. It is a rivalry.

Neil Freiman
I mean, it's bachelorette party, bachelor party central for both of those. They both have great live music. So I do like the little rivalry popping off between Nashville and Austin. But Nashville is a really great location. I mean, it's central.

You can get anywhere from it. It has lower costs. There's no state income tax. So you can see why a lot of companies and people are moving to Nashville. And I'm sure the residents of Nashville, looking at what happened in Austin with a huge home price increases, and say, wow, we really don't maybe want to become Austin 2.0, where everyone wants to move here and lower Broadway just becomes, you know, Disney World, which it may be already has.

Okay, here are a list of things you have to pay to enter Universal Orlando, national parks, the Guggenheim, and as of yesterday, the city of Venice, Italy. Venice became the first city in the world to charge a payment for tourists and a bid to clamp down on over tourism and make the city more livable for residents. So if you're planning on day tripping to the queen of the Adriatic this summer, be prepared to fork over €5 if you go on any one of 29 peak dates through the middle of July. There's a reason Venice became the first city to charge an entrance fee for tourists. It's overrun.

As many as 40,000 visitors arrive each day to Venice which is nearly the same amount of people as live there. And there's a pervasive feeling its future is at stake if it doesn't take some action. A few years ago, UNESCO threatened to put it on its heritage sites in danger list due to mass tourism and rising water levels, which motivated city leaders to install the fee. Toby. Venice today, Santorini tomorrow.

Toby Howell
I mean, that sounds like a good trip itinerary in my book, but, yeah, locals were out protesting this, which I was a little surprised initially because you would think that they would want less tourists, but they don't like that. The fact that their city was being put behind a ticket fee, much like an amusement park. And they said for them, charging money for tourists while still doing everything you can to attract tourists is just greedy. At some point, they think the way forward is to actually work on repopulating the city with locals. Right now, there's around 49,000 local inhabitants and there's more beds for tourists in the city than actual locals.

So every one protester said every house that's lived in is a house taken away from tourism as a positive thing. Like, that's what he's advocating for. So. And also there's some constitutional rights here. They think it's restricting freedom of movement in other ways.

So some people are saying you didn't even go far enough either, too, because a five euro fee won't do anything to dent them, the 30 million people that visit Venice every year. So there was a lot of controversy around this, but this is what cities. Are doing everywhere they're faced with over tourism. Barcelona, Amsterdam, New York City, Japan. Where's the city?

Neil Freiman
Venice. They're all figuring out, we're getting so many tourists, so many visitors. How do we stem this tide? How do we make it livable for, for locals? We've seen a variety of strategies, which has been interesting to look at.

In Venice, they're putting this tax, essentially, which economists would say, this is exactly what you should be doing. They're doing something similar in Japan, where they're charging tourists 70% more to take a train ride. So that would. That economists would say, yes, that is sound policy. In Barcelona, as we talked about, they are removing a bus that goes to a popular tourist destination from Google Maps and Apple maps so that tourists can't find it.

So that's one way to do it. Amsterdam rolled out this social media campaign that literally tells drunk british people don't come here. So we're seeing a suite of options about how cities are tackling mass tourism. And then Milan also passed on a very controversial ban as well. They're saying they're banning the sale of takeaway food after midnight.

Toby Howell
And so a lot of people are up in arms in that because the times are like, you mean to tell me I can't sit around late night and talk while eating gelato or something like that? That's a very fabric of our culture. So we've seen varying reactions, varying responses. But the common thread is how can we figure out how to have sustainable tourism and not overrun our locals? Let's wrap it up there.

Neil Freiman
The work week is almost over. Have a wonderful Friday, and thanks so much for spending your mornings with us. You have any feedback on the show? Have copilot generate an email and send it along to morningbrewdailyorningbrew.com doT. Let's roll the credits.

Emily Milliron is our executive producer. Raymond Liu is our producer. Ychenua Ogu is our technical director. Billy Menino is on audio. Hair and makeup is craving Chipotle.

Devin Emery is our chief content officer, and our show is a production of Morning Brew. Great show, Daniel. I wish you all well.

Toby Howell
I wish you all well.