Americans Looking Toward Italy

Manarola Italy (cinque terre)

A brief Google search reveals there is no clear definition of what is “luxury travel.” Nevertheless, Travel Leaders Group (self-described as one of North America’s leading travel companies) says those seeking the luxury experiences are eyeing Italy, as well as European cruises.

Its latest survey of travel agents reveals:

  • Among the top destinations for luxury travel in the coming 12 months, Italy leads the way, followed by European river cruises, Mediterranean cruises and the United States, respectively.  
  • In addition, 92.6% of the agent experts surveyed state that their luxury travel bookings are higher than or on par with this time last year, a marked increase from the 84% of agents last year.

Ireland made it into the top five this year, and the upwardly-trending Iceland came in at number 10. Jamaica, South Africa and New Zealand were also among the top 15 destinations affluent clientele are seeking for vacations, according to Travel Leaders Group’s luxury travel agents.

Just more than 34% of agents said that Italy is the top vacation spot for their luxury travelers. River cruises in Europe are the second-most favorite destination for luxury travelers, with 22% of the agents saying their clients are booking or inquiring about this option.

“River cruises are the best option for seeing Italy or other parts of Europe, especially for active and adventure clients who also want to feel pampered. From the moment they step on board, the crew already knows their name. There are also bikes and kayaks available for those who want an immersive experience,” said Missy Skoog, a luxury travel specialist in Blaine, Minnesota. “Clients who are also seeking fine dining experiences and river cruises have some of the top most skilled chefs. Additionally, the suites are large, there is butler service and one can take excursions to several small villages and cities without needing to unpack over and over.”

Third-place Mediterranean cruises are also popular with luxury clients, with 18% of the agents saying their clients are booking or inquiring about this option.

Holiday Cards and the Workplace

writing greeting cards

Workplace question: Should I send a holiday card to my boss or other members of management? Reference-checking firm Allison & Taylor answers in the affirmative.

It offers reasons why and tips for doing it correctly.

Why a traditional greeting card is a good idea:

  • Connecting with your bosses (or a former boss) will help keep you top-of-mind in their awareness, translating to possible future support or opportunity.
  • Staying in touch with bosses and colleagues via a holiday card is a subtle yet highly effective form of networking.
  • Sending your bosses (also former bosses, colleagues, suppliers, etc.) a card demonstrates a personal touch to accompany your business relationship.
  • Staying in the favor of your prospective employment references (particularly former bosses) is critical to your future employment success.
  • Developing and maintaining positive relationships with your management team, co-workers and former bosses will ultimately be a cornerstone of success in your career.

Sending the right holiday greeting card:

While sending out holiday cards is almost certainly a good idea, even this generous gesture can backfire if the proper protocols aren’t observed. 

  • Choose a high-quality holiday card that allows no possibility of offending its recipient. Remember that not everyone celebrates Christmas – be mindful of religious and cultural nuances.
  • Choose a design that is appropriate for your business associates.
  • Keep your contact list accurate and up-to-date. Make sure you’re not sending a card to someone who has left the department or the company.
  • Check the spelling of your contacts and their corporate name. Any good points you’ll score with a holiday card will be lost if you misspell your contact’s name or corporate information.
  • Include one of your business cards inside the greeting card. This small insertion ensures that your recipients have your most current contact information and will reinforce your name with the card’s recipient.
  • Sign each card personally. It only takes a moment to sign your name and write a short greeting, and your business associates will notice and appreciate this more personal gesture.

FCC’s Official Net Neutrality Decision Coming This Week

On Thursday, the Federal Communications Commission (FCC) will decide whether to overturn the Obama-era net neutrality regulations that currently govern the internet. It is highly anticipated they will decide to return to the pre-2015 regulations.

Net neutrality implies an open internet environment that internet service providers should enable access to all content and applications regardless of the source, and without favoring or blocking particular products or web sites.

The 2015 net neutrality laws reclassified high-speed broadband as a public utility under Title II of the 1934 Communications Act rather than the 1996 Telecom Act. These regulations applied to both mobile and fixed broadband networks. The reclassification changed how government treats broadband service and gave the FCC increased controls over internet service providers.

The office of FCC Chairman Ajit Pai recently issued this Myth vs. Fact statement on returning to the pre-2015 regulations. One issue the public is concerned with is if internet providers would block or “throttle back” certain content to the public. Another is if content developers would pay internet providers for accelerated data transfer. The bigger issue is whether internet providers can operate their businesses as businesses rather than as a public utility. Data show that private investment in internet services has slowed under the post-2015 regulations.

The Indiana Chamber supports free-market competition in the delivery of advanced communications services. The competition in a free-market environment among industry service providers is consistent with providing choice to consumers and an adequate service of last resort in extended service areas.

The Chamber opposes any attempt to impose new regulations on broadband and other next-generation telecommunications services by the FCC, especially through the unilateral reclassification of such services under Title II of the Federal Communications Act.  The Indiana Chamber supports the U.S. Congress examining and deciding issues such as net neutrality. We believe that advanced communications and digital infrastructure are critical to long-term economic development. Since 2006, private companies have invested more than $1.5 billion in new broadband capacity in the state, expanding service to more than 100 Hoosier communities and creating 2,100 new jobs within the industry.

If the FCC rules to return to the pre-2015 regulations, it is expected that Congress will entertain legislation to promote some of the concepts of net neutrality and limit the ability to stifle content.

Business Podcasts to Inform Your Commute

Radio

Who said video killed the radio star?

(Okay, some band from the late ’70s sang that phrase in a popular song that many associate with the rise of MTV.)

But the point is, radio never died. It is back and bigger than ever, thanks to a growing industry movement: the podcast.

With the ability to instantly stream or download radio programs on any number of topics, podcasting has invigorated audio listeners and broadcasters alike. Your phone most likely holds enough hours of programming to keep you awake for days bingeing everything from true crime (my personal favorite), to news and politics, health and wellness, music, pop culture, literature and business (and a whole lot more).

If you’re new to the podcast landscape, understand that you can access shows from just about any device that has an internet connection. There are plenty of apps to download to manage your podcast subscriptions, which makes it easier to know where you left off and what you’d like to save for the future.

EchoChamber

The Indiana Chamber of Commerce launched the EchoChamber podcast earlier this year, featuring conversations with Indiana leaders in business, education, government and more. New episodes are featured every other Tuesday and you can listen via the web site, www.indianachamber.com/echochamber, or subscribe wherever you get podcasts.

(If you listen, do us a favor and rate and review us on iTunes! It helps more people discover our content.)

Our most recent episode features Blair Milo, former LaPorte mayor (elected at age 28), Navy veteran and the state’s first Secretary of Career Connections and Talent. She discusses the challenge of aligning current workforce efforts and introducing new ones to tackle workforce issues in Indiana. Listen here.

There are other Indiana-focused business podcasts to tune into as well: Indiana Chamber President Kevin Brinegar has been featured on The ROI Podcast from the Kelley School of Business. And Inside INdiana Business recently launched a podcast of its own, focused on its weekly television show.

If you’re looking outside of Indiana-specific business podcasts, Fast Company recently listed 10 popular business podcasts to check out:

  1. “Startup,” Gimlet Media

No podcast better captures the thrills and struggles of launching a company. Created as a remarkably candid docuseries on the birth of podcasting business Gimlet Media, it now traces the surprising stories of other enterprises.

  1. “Planet Money,” NPR

This show – launched in 2008 to help explain the financial crisis – offers fascinating explorations of the intersection between economics and culture.

  1. “Working,” Panoply

Each installment starts with the same question: “What is your name and what do you do?” Guests then reveal details of their jobs, whether they’re a neurosurgeon, a novelist, a pollster, or a clown.

  1. “Above Avalon,” Above Avalon

A giant bite of Apple. Hosted by analyst and technology writer Neil Cybart, this show goes deep into all things Cupertino, with some of the most informed analysis you’re likely to find.

  1. “Brown Ambition,” Brown Ambition

Journalist Mandi Woodruff and personal-finance expert Tiffany Aliche chat about news, relationships, and other topics, but they’re especially incisive when discussing their successes and failures in the business world.

  1. “How I Built This,” NPR

This series explores backstories of various big businesses, from AOL to 1-800-GOT-JUNK. The storytelling is simple and linear, leaving space for gripping personal tales to emerge.

  1. “Eater Upsell,” Vox Media

Editors from culinary site Eater glean insight from chefs and other industry pros, both famous (Anthony Bourdain) and less so (cookbook photographer Evan Sung).

  1. “Exponent,” Exponent

Tech watchers Ben Thompson and James Allworth tackle topics of the moment – fake news on Facebook, Uber’s scandals – and offer broader discourse on where the digital world is headed.

  1. “I Hate My Boss,” Wondery

Former Nike and Oprah Winfrey Network marketing executive Liz Dolan and executive coach Larry Seal offer advice on your stickiest workplace conundrums.

  1. “Loose Threads,” Loose Threads

Focused on innovation and technology in the fashion industry, this podcast digs into notable developments in manufacturing, design, retail, and other areas.

What’s playing on your drive home? Share your favorite podcasts in the comments!

Tennessee to Offer Skills ‘Warranty’

Tennessee has drawn its share of higher education attention with its Promise program gaining national recognition. A new initiative seeks to further address workforce skills challenges.

The Times Free Press in Chattanooga has the details.

Beginning next fall, new graduates of the Tennessee College of Applied Technology (TCAT) or similar technical programs offering certificates and degrees from state community colleges will come with an eye-catching “warranty” for prospective employers.

If companies can demonstrate the graduates they hire aren’t up to snuff, “we’ll take them back and train them for free,” Tennessee Board of Regents Chancellor Flora Tydings told Gov. Bill Haslam.

Replied Haslam: “I love the idea. … That’s accountability at its finest.”

“It’s exactly what it sounds like,” Tydings told reporters. “If you do not have the skill set for which we say we have trained you, we’ll take you back and retrain you for free – if an employer documents that you do not have those skill sets within a year of graduation.”

Tydings said she doesn’t expect community colleges and TCAT to have to do much graduate retraining because of the job the institutions do.

promise

House and Senate Get Started on Tax Reform; Where Does Donnelly Stand?

Late last week, the House Ways and Means Committee concluded its markup of the GOP tax reform bill (the Tax Cuts and Jobs Act) and voted along party lines to move the measure, 24-16. The core of the House bill reduces the number of individual tax rates, slashes the corporate tax rate and eliminates many deductions and credits.

The bill now will be taken up by the full House of Representatives for debate and vote – likely before the Thanksgiving recess. What are some sensitive issues being discussed in the tax reform bill? Pass-throughs, adoption tax credits, deductibility of state and local taxes (SALT), excise tax and more.

The GOP can only lose 22 votes in the House and whip counts are being held very close to the vest – only five or six Republicans have publicly stated that they are against the bill in the current form (all due to SALT).

Meanwhile, the Senate decided on Thursday to release its own tax reform plan. From the business perspective, the differences largely are about adjusting the dollar dials and creating negotiation items. In other words, politics. The Senate option does delay some positive economic effects, but if that’s what it takes to get a permanent tax reduction in the books so be it! We do want to point out that there are some notable differences between the two versions, particularly on the individual side – including with the estate tax and mortgage deduction, which, again, serve to set up further negotiations.

Senator Todd Young welcomed the effort from the Senate Finance Committee.

“I’m encouraged by the Senate’s proposal to create a tax code that is simpler, fairer and allows hardworking Hoosiers to keep more of what they earn. I’m also glad that this proposal maintains the adoption tax credit that is important to so many Indiana families. As we continue to debate a final tax relief package, I will keep working to ensure Hoosier voices are heard.”

Meanwhile, Sen. Joe Donnelly, didn’t give away his stance: “As I have said, tax reform should create jobs, protect jobs, invest in American workers and benefit middle class families. I will carefully review the Senate proposal and continue to engage with my colleagues and the White House on behalf of Hoosiers as the Senate works on tax reform.”

Donnelly also met on Thursday with the White House Director of the National Economic Council Gary Cohn to discuss his tax reform priorities. Earlier last week, Donnelly participated in another such meeting with White House Director of Legislative Affairs Marc Short and Cohn. President Donald Trump called in for a portion of the event. In that meeting, Donnelly discussed his tax reform priorities and shared a letter that he also sent to Vice President Mike Pence on Tuesday emphasizing that the tax policies should align with the interests of American workers and support companies that invest in the U.S.

Donnelly’s priorities are consistent with his End Outsourcing Act, which would support companies that invest in American workers and penalize companies that ship American jobs to foreign countries.

The Hill reported late last week that “Blue Dog Democrats are lining up in firm opposition to the Republicans’ tax code overhaul, hoping that Tuesday’s election results (particularly in Virginia) will force GOP leaders to reach across the aisle for a bipartisan alternative.”

Donnelly, a Blue Dog Democrat, has not said anything of the kind publicly and has been heavily courted by the Trump administration for his vote.

Federal Tax Plan = Meaningful Cuts More Than Comprehensive Reform

The “Tax Cuts and Jobs Act” (H.R. 1) has finally arrived! The long-awaited details – over 400 pages worth – are now out there for all to debate. This is a debate that will play out before the House Republican Ways and Means Committee this week. Much of the public discourse will focus on how it impacts individuals, but for the business community it is the taxation of businesses, large and small, that is of the most significance.

The plan includes a reduction of the corporate rate from 35% to 20%, an important and meaningful step. It also caps the taxation of income derived from pass-throughs (S corporations, LLCs, partnerships and sole proprietorships) at 25%. Key provisions are outlined below. And if you are truly into tax law, the full bill is also available, as is a section-by-section summary.

Now you may note that this legislation is labeled a tax cut, not tax reform. And while many will call it that, it is probably better characterized as a tax cut bill. Cuts are good, and these measures will certainly be the impetus for some level of economic growth. But the trillion dollar questions remain: How much will it spur in gross domestic product (GDP) growth? And, can that realistically be enough to offset the projected reductions in tax collections?

Nobody can really know the answers to these politically-charged questions. But as you read the “scoring” of this legislation (to be published by the Congressional Budget Office after passage out of the House Ways and Means Committee), you may consider these items for context: the GDP growth rate in the United States averaged 3.22% from 1947 until 2017; GDP has pleasantly surprised people by breaking the 3% mark the last couple quarters; and the GDP will probably need to go a good bit higher to prevent the bill from adding substantially to the already staggering federal deficit. So listen for what growth rates are assumed in the projections that will be discussed and debated – and draw your own conclusions.

Key provisions affecting businesses

  • Reduces the corporate tax rate: The rate will drop to 20% from the current 35% and is designed to be permanent.
  • Establishes a repatriation tax rate: The repatriation rate on overseas assets for U.S. companies would be as high as 12%. The bill also may include a mandatory repatriation of all foreign assets. Illiquid assets would be taxed at a lower rate, spread out over a longer period than liquid assets like cash.
  • Creates a 25% rate for pass-through businesses: Instead of getting taxed at an individual rate for business profits, people who own their own business would pay at the so-called pass-through rate. (There will be some guardrails on what kinds of businesses can claim this rate to avoid individuals abusing the lower tax.)

Key provisions affecting individuals

  • Creates new individual income brackets:
    • 12% for income up to $45,000 for individuals and $90,000 for a married couple
    • 25% up to $200,000 individual/$260,000 couples
    • 35% up to $500,000 individual/$1 million couples
    • 6% over $500,000 individual/$1million couples
  • Caps state and local property tax deduction at $10,000, but does NOT cap income or sales tax deductions.
  • Eliminates the estate tax: The threshold for the tax, which applies only to estates with greater than $5.6 million in assets during 2018, would double to over $10 million; the plan then phases out the tax after six years.
  • Does NOT change taxation of 401(k) plans.
  • Increases the child tax credit to $1,600 from $1,000. The bill would also add a credit of $300 for each non-child dependent or parent for five years, after which that provision would expire.
  • Limits home mortgage interest deduction: On new-home purchases, interest on loans up to $500,000 would be deductible. (The current limit is $1 million.)
  • Nearly doubles the standard deduction: To avoid raising taxes on those currently in the 10% tax bracket, the standard deduction for all taxes would increase to $12,000 for individuals (up from $6,350) and $24,000 for married couples (up from $12,700).
  • Eliminates most personal itemized deductions and many credits. The only deductions preserved explicitly in the plan are for charitable gifts and edited home-mortgage interest.
  • Repeals the alternative minimum tax (AMT). The tax, which forces people who qualify because of an outsized number of deductions, would be eliminated under the legislation.

Full policy highlights of the bill can be found here.

Keep in mind this is the House’s plan and it will be subject to a different form of scrutiny in the Senate. So regardless all the prior coordination among those working together on this effort for months, some (perhaps many) things will change – they always do!

As for the timeline, it’s hard to say. But we do know that the House Ways and Means Committee will begin hearing amendments this week, and the process could take several days. A vote on the bill by the full House, as it is passed out of Ways and Means, is anticipated to come as early as November 13. From there it goes to the Senate Finance Committee, then full Senate. Optimists hope for something to pass before the end of the year. However, don’t be surprised if the debate isn’t carried over into the beginning of 2018.

Indiana’s delegation members are also weighing in with their views on the new tax bill. Chief among them is Congresswoman Jackie Walorski (IN-02), a member of the pivotal House Ways and Means Committee: “Hoosiers deserve every opportunity to achieve success and live the American Dream, and that’s what tax reform is all about. The Tax Cuts and Jobs Act will help American businesses expand, invest and hire more workers, and it will let middle-class families keep more of the money they earn. It’s time to fix our broken tax code and level the playing field for hardworking Americans by once again making America the best place in the world to do business.”

Resource: Bill Waltz at (317) 264-6887 or email: bwaltz@indianachamber.com 

‘Please Mr. Postman’ Bring Me a New Wardrobe/Makeup/Pet Item/Toy

Delivery

The masses were familiar with hearing “Avon calling” at the doorstep in the 1950s and 1960s as employees of the skincare company went door-to-door offering samples and direct sales of makeup products.

Fast forward to today and the person bringing makeup samples, clothing, luxury products, wine and other items is the postal worker, delivering subscription boxes full of goodies.

The service gained popularity a few years ago with companies such as Birchbox, which delivers high-end skincare and makeup samples monthly for $10. Numerous other companies have followed suit with monthly subscriptions or on-demand services. The services run the gamut from specialty pet items to STEM-related toys for kids to disposable razors and meal kits, to name a few. (There are 2,500 companies that sell subscription boxes, according to a 2016 Bloomberg article).

But what are the benefits of these services, and are they sustainable business models?

We all probably have an anecdote about someone telling us about the service they subscribe to (I can think of two: one of my co-workers subscribes to monthly makeup samples through IPSY; another has tried Hello Fresh as an easy and quick way to get a foolproof homecooked meal on the table on busy evenings).

And I’m quick to recommend my own experience with personal styling company StitchFix. As someone who would never initiate or pay for a personal stylists’ services at a department store, I absolutely love being able to have the service delivered to my doorstep. Not one to follow fashion trends (and at 6-feet tall), the company sends me five pieces tailored to my size, shape and style preferences for a $20 styling fee. I keep what I want (the $20 comes off the top of the price of clothing) and send back the rest for free.

There are a few reasons these services are popular, one being they are personalized experiences with the convenience of not leaving your home. There’s also the anticipation factor – you don’t know what you’re going to get until you’re opening the box and pulling back tissue paper.

But can the practice sustain? Particularly as large companies begin to capitalize on the idea, can start-ups survive stiff competition?

This Forbes article gives a good in-depth look at growth in the industry, demographics of the targeted audiences and up-and-coming companies, as well as the major challengers getting into the subscription box game.

Scaling niche businesses is also a challenge. How do you keep the products personalized and quality high when you start marketing to a broader audience in order to grow? And with the highly-personalized nature of these services, can automation ever play a role in the manufacturing process?

Bloomberg recently focused on meal delivery company Blue Apron, which went public earlier this year. The article notes company shares have fallen by half in about two months’ time.

Five-year-old Blue Apron, which raised close to $200 million in venture capital before its IPO, has warned it may never be consistently profitable. And that isn’t just a Blue Apron problem: The business model for subscription boxes turns out to be much tougher than it sounds, because of the high costs of getting and keeping customers. “You’re coming into an area where margins have always been thin, which makes turning a profit a huge task,” says James Wester, an analyst at researcher IDC. “Just applying new technology on top of traditional industries doesn’t work.”

About 2,500 companies sell different kinds of subscription boxes in the U.S. alone, with the top handful generating nine-figure annual revenue. Profitability, however, is a different matter, and the past year has been littered with box companies that couldn’t work it out. The recently shuttered services have names like Treatsie (for high-end candy and other sweets), Fair Treasure (jewelry and other accessories), and Blush Box (beauty products, lingerie, and sex toys).

Now that Blue Apron has gone public, its numbers are more transparent than most. In pre-IPO filings, the company said it had spent an average of $94 in the past three years to acquire each subscriber, that each was paying an average of $236 a quarter for about 24 meals’ worth of preportioned ingredients, and that those numbers had dipped slightly since 2016. Counterintuitively, scale hurts subscription-­box makers, because getting big means they have to spend way more on marketing. (Blue Apron spent $144 million on marketing in 2016, a 182 percent increase from the year before.) Among subscription boxes in general, “the pricing is not smart given the price of acquisition being so high,” says Ross Blankenship, a venture capitalist at Angel Kings.

As with any relatively new service or company, only time will tell if this section of the retail industry can last. Until then, tell us about your experience (in the comments section) with subscription box services.

Playing the Federal Numbers Game

government employeeQuestion: Exactly how many people work for the federal government? Answer: It depends.

A new study titled “The True Size of Government” puts the number at somewhere between seven and nine million. Here’s the breakdown:

  • 2 million employees
  • 3.7 million contractors
  • 1.6 million grant employees
  • 1.3 million active duty military
  • 500,000 Postal Service

Military members are not always included in such calculations. Same with the Postal Service, which does not receive congressional appropriations. The grantee and contract numbers are estimates from the Bureau of Economic Analysis

Study author Paul C. Light of New York University says an important takeaway is “the study reminds us that the nation depends on a very large blended workforce that includes many more contract and grant employees than federal civil servants. It is easy to say the civil service is too big, but it is only part of the workforce needed to faithfully execute the laws.

“The question is not whether we have too many government employees, but do we have the right blend to deliver the mission at the best price, value and performance. … This means we should be counting all the heads when we get into debates about cutting performances.”

That blended workforce actually dropped from 11.3 million to 9.1 million between 2010 and 2015, according to a separate study published by the Volcker Alliance.

Light doesn’t question the value of contract and grant workers. He does note that while cost savings are often cited for their increasing use, that is not always the case when “indirect costs such as supplies, equipment, materials and other costs of doing business enter the equation. Add overhead to the total and contract employees can cost twice as much as federal employees.”

Small Business Revolution Offers Chance to Win $500,000 Revitalization

What can $500,000 and a lot of publicity do for a small city of 10,000 people in Indiana?

That’s what the team from the Small Business Revolution – Main Street series wanted to know when it revisited Wabash to see the impact of the program one year after the city won the contest.

For a quick recap on what happened in Wabash and some of the results a year later, watch this video of the team returning to the city:

The second season, which just debuted, focuses on Bristol Borough, Pennsylvania. Deluxe Corporation, which created the contest, is accepting nominations for the third season of the video series and a chance to win a $500,000 investment for your town and small businesses.

The series stars Robert Herjavec from Shark Tank, who gives the winning town and its small businesses one-on-one guidance, while upgrading public spaces and access to marketing and business services from Deluxe. The town’s business owners are the focus of individual episodes.

Nominations are open through October 19 and the public will determine the winner through voting. To be eligible, the city or town must have less than 50,000 residents. Anyone can nominate a town (even if they don’t live there).

To watch the whole Wabash series, visit www.deluxe.com/small-business-revolution/main-street/season-one/.