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QUEST MEANS BUSINESS

Irish Debt Downgraded; Heineken, Papa John's CEOs Seeing Global Growth

Aired August 25, 2010 - 14:00:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


RICHARD QUEST, HOST, QUEST MEANS BUSINESS: The rating agencies are putting the boot in. Irish debt takes a pounding. Tonight, we hear from Europe's economic commissioner.

We've got bee and pizza. Heineken and Papa John's chief execs tell me their plans for the future.

And we're all going on that summer holiday, but what are the popular destinations, and why?

I'm Richard Quest. I still mean business.

Good evening.

Downgraded, but defiant: Tonight Ireland is fighting to restore its financial credibility in the markets, after Standard & Poor's rating agency slashed Irish credit rating and revived fears about the sovereign debt crisis in Europe. The cut comes at a crucial moment for Ireland on the eve of a key test on the trading floors. It is not the first time that sovereign debt has been downgraded, but it certainly stoked the flames once again.

If you join me over in the library you'll see what I mean. S&P downgraded from AA to AA minus, it has also a negative outlook for future ratings moves. Now, it is not a huge difference and it still has the vaunted A letters within it. So it will have an effect. It will make it more difficult and more costly for the Irish government to roll over their debt. S&P says it will cost up to $63 billion to prop up Irish banks. You'll be familiar, of course, they also say that net Irish government debt will rise to 113 percent GDP, in 20-or by 2012. So that is a serious situation, but on the other side Ireland doesn't have to actually refinance much of its debt anytime soon.

However, the Irish government, or the agency responsible for debt management, has said "flawed", and it called the S&P report "not robust". And the reason is because S&P took into account all the properties that Irish government debt now backs. And it said they didn't give them any value whatsoever; even more astonishing, since a lot of those assets are actually major commercial properties in London. It is as if S&P added, but then forgot to subtract, or the other way around.

The key test, the most important test, Irish 10-year bond yields rose to more than 5.4 percent. Now that is more than 3 percent more than German 10-year bonds, which is the benchmark across Europe. All this would be academic if Ireland wasn't going to the market tomorrow to have a bond sale. It will be interesting to see and the market will be watching. What price to they have to offer into the market and even if they do get good cover, how many times over covered is that debt?

We'll be looking at that, obviously, and telling you about it tomorrow.

Things could be a lot worse. Here's how Ireland's long-term credit rating look compares to some of its European neighbors. At the top is Germany, which of course has AAA and is a stable. The U.K. has AAA negative, Spain is AA negative outlook, Portugal is A minus, negative. But everyone is well above Greece with its BB, plus. That rating is just above the junk bond levels. The level at which speculators and many pension funds and unit trusts are not allowed to invest.

This has been a serious matter for Olli Rehn, the EU commissioner for economic and monetary affairs. So much so, he took the unusual task of speaking about the matter when I asked him was the rating agency being unfair to Ireland?

(BEGIN VIDEOTAPE)

OLLI REHN, EU COMMISSIONER FOR ECONOMIC & MONETARY AFFAIRS: We have normally not a habit to comment on the business of the rating agencies. But I can sympathize with the Irish government because Ireland, in fact, has taken very substantial measures over fiscal consolidation and bank recapitalization, which will help with turning the economy of Ireland to a better direction.

QUEST: When we look at the economic numbers now, in the United States and a large, large areas of the Euro Zone, a noticeable and worrying slowdown is underway. This gives cause for concern. And I wonder, is it time to ease off on the deficit reduction?

REHN: No, it is not. And if you look at it from the European point of view, the economic outlook in Europe is turning positive. We are in fact-you can say that Europe is turning the corner in terms of its economic development. In other words, there is a robust recovery underway in Europe, although it is moving at an uneven pace, in different parts of Europe.

QUEST: Europe can't live on Germany's exports alone. A two tier, European, economic speed is rapidly evolving here.

REHN: No it is not. In fact, we have a carefully calibrated and differentiated strategy of exiting from fiscal stimulus. In other words a large majority of member states of the European Union, and of the Euro Zone, are continuing and completing their fiscal stimulus plans in the course of this year, until the end of this year. Which have been running both in 2009 and in 2010.

QUEST: Commissioner, too much of European growth, currently, relies on the German economy and those German exports.

REHN: It is to my mind, in fact, a positive signal that German export industries are doing well, in the global competition. The same goes for many other European companies, take the Nordics, take many Central Eastern European countries. It is correct. We have a more difficult situation in mostly Southern European countries.

QUEST: Right.

REHN: Of course, Greece, as an example; but Greece is taking very determined action to reform the country and to reform it economic structures.

QUEST: Commissioner, ask anyone in the market, ask anyone privately, and they will tell you that eventually Greece will have to restructure its long-term debt. Now notice I say restructure, not default. Do you believe, and are you prepared to say now, that it is best that Greece gets on with restructuring the long-term debt that it is going to have to do eventually?

REHN: No, it does not have to happen. And it will not happen. I talk also, a lot, with the market forces, privately, the investors, privately. And I know the feelings, as we got Greece in the financial markets.

I think we are also seeing some change in the sentiment in the financial markets, in relation to Greece. There are two or three reasons why debt restructuring not necessary or something to be preferred.

QUEST: Are you now confident and clear to say that no double-dip recession in the Euro Zone?

REHN: I saw the statement of George Stiglitz, the other day, about double dip in Europe. That is not going to happen. Europe and the European economy is sometimes like a diesel engine, an old diesel engine, in the sense that it starts slowly but when it gets going it is moving forward robustly and we now have such a robust recovery underway in Europe.

(END VIDEOTAPE)

QUEST: The European Economic Commissioner Olli Rehn, saying he sympathetic with the Irish plight with regards to the problem that they are facing. And, of course, onwards talking about the no double dip recession in Europe.

When we come back in a moment, beer and pizza, and its not all work for this man.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Beer is my hobby, yeah.

QUEST: Really?

UNIDENTIFIED MALE: Yes, it is. Yeah.

QUEST: Do you ever make it yourself?

UNIDENTIFIED MALE: Yes, I did. In my earlier years I started my career in the brewery in Amsterdam, first, and then in (UNINTELLIGIBLE) in Holland, and I have been brewing beer and working in the fermentation cellar, on the bottling line. I did it all, yeah.

(END VIDEO CLIP)

QUEST: He's the chief exec of Heineken. He gives us the good, the bad, the and the bubbly, on the beer, in a moment.

(COMMERCIAL BREAK)

QUEST: The Irish debt downgrade we told you about made for a miserable day on Europe's trading floors. And there was yet more worrying news on the U.S. economy, which we'll come to in just a moment.

To the European bourses and all the major indices ended lower, extending the losses. Tullow Oil shed 4.6 percent in London. It says plans to develop oil fields in Uganda maybe delayed. Mines and metal producers were among the big fallers. Financial shares were hit hard around the region. Even BHP Billiton's results failed to sparkle. A market that was just downright grumpy.

Patricia Wu joins me now at the New York Stock Exchange.

And if there was a reason for grumpiness, we can find it on the other side of the Atlantic. Existing home sales yesterday, new home sales today, and both a deplorable number.

PATRICIA WU, CNN FINANCIAL CORRESPONDENT: Absolutely, Richard. You know another gloomy day, another weak economic report. So, as you mentioned, the gloomy new home sales, they missed estimates, just like existing home sales did. New home sales plunged more than 12 percent to their lowest level on record. Analysts had been forecasting a modest gain.

Now new homes represent just 10 percent of the market, but the report signals further weakness in housing and reflect additional weakness in construction and the jobs market, since existing home sales, which makes up the core of the housing market, fell more than 27 percent on Tuesday.

Now we also go the durable goods number out. And guess what, Richard? Gloomy and missed estimates. It rose just 0.3 percent. Actually a drop of nearly 4 percent when you take out transportation goods. And that is the biggest drop since January 2009, which is near the low point of the recession, Richard.

QUEST: OK, there are two factors here, though, Patricia. We knew the numbers were going to be disappointing and there was a slowdown. The fact that they're missing estimates is important. Is there anything preventing the market going over the cliff?

WU: Well, the fact that we haven't gone over a cliff and that the Dow is actually positive, and the Nasdaq is actually positive right now, is one small tiny glimmer of good news. Which the traders say, they'll take it. And they're hanging their hat on that as well as the fact that they say that maybe the selling has been overdone, because we saw a quick snap back, after the knee-jerk reaction to the housing numbers earlier in the session.

Also, we still have low volume here, late summer days, so not a lot of conviction to take the market in either direction. One traders says we're going to have to wait until after Labor Day, in two weeks, for that volume to come back. Others are saying we won't see much movement until after the November elections.

But in the near term, we get more jobs data out Thursday. Investors may be waiting for that, before they take the stocks up or down. Because you remember it was a psychologically jarring jobless claims report that started this market on its recent loosing streak. The Dow has been down more than 400 points since then.

Also the GDP number on Friday could give us a better idea of where we are headed.

QUEST: All right. Patricia, many thanks, indeed.

After all that economic digest, some beer and pizza. You have to admit that sounds like much more cheerful way to proceed. Because we promised it you, we have got the chief exec of Papa John's, joins me in a moment with a slice of the action. QUEST MEANS BUSINESS, good evening.

(DESK BELL CHIMES)

(COMMERCIAL BREAK)

QUEST: So, as promised, it is time for beer and pizza and we start with the drinking stuff. Heineken is toasting a big jump in earnings. Half year net profits rose 42 percent to nearly $1 billion. What is remarkable is that Heineken's beer sales actually fell. It was cost cutting and price rises that gave profits a lift. Heineken says the sales slump due to a weak economic climate and higher taxes. Russia when it trump-tripled its duty on beer earlier this year. Sounds like I've been imbibing the stuff.

Heineken brews a lot more than just signature beer. Jean-Francois Van Boxmeer, the company's chef exec showed me the other brands he's got deep in the frig.

(BEGIN VIDEOTAPE)

QUEST (on camera): This is the granddaddy?

JEAN-FRANCOIS VAN BOXMEER, CEO, HEINEKEN: This is the granddaddy, as you call it, yeah.

QUEST: Does this still make the most money for you?

VAN BOXMEER: Mr. Heineken would be very, very -kind of nice looking at you, saying it is the granddaddy.

QUEST: Is where you make the most money?

VAN BOXMEER: This is the one we perhaps make the most money around the world. This is 17 percent of our sales, but double the amount of profit in out total portfolio; 17 percent of our volume, worldwide, is the Heineken brand.

(CROSS TALK)

QUEST: Right, but you can't live by Heineken alone?

VAN BOXMEER: No.

QUEST: So how do you-?

VAN BOXMEER: Next to that we have-

QUEST: How do you developing it on a bit?

VAN BOXMEER: We have 270 other brands so we have a very limited assortment today here.

QUEST: Well, you have sort of the exotics?

VAN BOXMEER: Yes. Those are the new-that is Tiger Beer from Singapore, which we can find in Singapore and many Asian countries, but also in London. That is Dos Equis. This is very famous in the U.S., comes from Mexico. Those are our new Mexican brands, Sol, Dos Equis, Tecate, those are the new Mexican kids on the block.

QUEST: Right?

VAN BOXMEER: Which we just acquired. Then you have-this is totally new to Heineken, not new to the U.K., these are the ciders.

QUEST (voice over): While Heineken's product range is expanding, in the beer business it is a share of mature markets like Europe and the U.S. is in decline. The main growth it is seeing is in emerging markets.

VAN BOXMEER: In the areas where we have it difficult, let's say, Europe and North America. You have declining sales. We make it up by, you know, just cost management. That's what we do. The fundamental problem about Europe and North America are demographics. Demographics are not very, you know, dynamic. And the population is graying. And that means that you have to re-tailor your business because the pie is just becoming smaller.

QUEST (on camera): How can you turn that around, so that you can either put new products in or grow the business in developed markets?

VAN BOXMEER: It is both. We are doing both. We grow out business in developed markets, but we also invest in the developed markets, by introducing your proposal. Think about cider. Cider is a phenomenon here in the U.K. We have 48 percent of the cider market in this country. And we introduced cider on the Continent.

QUEST: Do you make as money in those emerging markets, where yields and margins tend to be less.

VAN BOXMEER: Look, that's true. And that's why still, the European continent is attractive. We make good margins. We have higher prices, the premium end of the market is bigger and more developed and you still make a reasonable amount of cash flow, which it turns in out business models, that finances our expansion into the developing markets.

QUEST: In your notes to the accounts, you talk about the austerity measures, now being introduced in many of your developed markets. That is going to have an effect on you.

VAN BOXMEER: The next wave of pressure is, of course, budget deficits. Go for fiscal measures. Beer taxation is, of course, in the-you know, in the line what governments can do and some countries have done it already. Think about Russia, think about Greece, think about the Czech Republic, think about the U.K., here. And that, of course, effects consumer prices, and also demand for our products.

QUEST: The dynamics at the moment have never been more challenging for you, have they?

VAN BOXMEER: Well, I think it is a contrasting view. They are challenging-once more they are challenging in the developed worlds, but they are extremely encouraging in the developing world. We have seen growth rates in India of 30 percent, three, zero. You can dream about it. Brazil is growing 14 percent. Mexico is doing fine; Africa is booming. Vietnam is our fourth largest country for Heineken sales, worldwide. So we have plenty of opportunities to grow our company, our business, our brands going forward.

(END VIDEOTAPE)

QUEST: The chief executive of Heineken.

Now, we've had our fill of beer. Luckily the pizza man has also arrived. Although, seemingly without pizza, but we'll soon put a stop to that.

John Schnatter is the founder and the co-chief exec of Papa John's, one of the world's largest pizza companies. He is in the U.K. to open a new dough plant, and a quality control center.

John, many thanks.

The pizza business, we think of it as being-its price point for entry for people is actually quite low. Pizza is a food that doesn't cost a fortune.

JOHN SCHNATTER, FOUNDER, CO-CEO, PAPA JOHN'S PIZZA: Yes, a lot of value, a lot of value.

QUEST: How do you function during a recession?

SNYDER: Well, we don't like the downturn any more than anybody else, but folks seem to trade down. And our business is good. Our traffic is up high single digits. And our accounts are, you know, holding their own. In this market, we are up 24 percent in the last few years in the United Kingdom.

QUEST: Now when you say "trade down" does that mean they trade down from an exotic pizza with all the trimmings, to a basic? Or they are trading from restaurants to yourselves?

SCHNATTER: Yes, they're trading down from casual dining or something a little high end, down to a pizza, because there is so much value in a pizza. You really get a lot of bang for your buck.

QUEST: Really?

SCHNATTER: Yeah. I mean, you can feed a family of three with a 14- inch pizza for what, 10 bucks? You know?

QUEST: Very large in the United States, but clearly the U.S. market is just about saturated in pizza? So where is the expansion going to be for you?

SCHNATTER: Well, we have a lot of growth in the U.S., we have 2,800 stores, we think the U.S. will hold 3,800. So we have, you know, another 25 or 30 percent to go.

QUEST: How do you know? You say you think it will hold. But with so many other stores, how do you know that?

SCHNATTER: Well, Dominoes has 5,000.

QUEST: Right.

SCHNATTER: Pizza Hut has 6,000. I figure we can have 4,000. But the U.S. is our short-term growth vehicle for revenues. Long-term, five or 10 years down the road, we have to be international. And we have 700 stores. We are 29 countries and-

QUEST: Which is your most profitable country outside the United States or Canada?

SCHNATTER: Uh, China.

QUEST: China?

SCHNATTER: We have 157 stores in China and they make good money.

QUEST: So you are, just as we heard from the head of Heineken, you are also emerging markets, heading to the Far East, heading to those less developed markets where you can get in and move on.

SCHNATTER: Absolutely. I traveled the whole world the last 12 days. There is a lot of opportunity. We do well in Russia, in Moscow. We think India is going to be fantastic. Dubai, Bahrain, we do great. Kuwait is good. Cypress, I just left Cypress this morning and it is a fantastic market.

QUEST: OK, so, tell me, culturally, what moves and what doesn't? Everyone likes a basic pizza, but there are some things-for example, have you ever made a pizza that just hasn't sold? It was a good idea in the office and in the lab, but people said-GRRRNT!

SCHNATTER: Well, good pizzas are discovered in the lab. I mean, there is no doubt about it, you know, the franchisees are some of the folks, the managers, they are the ones that come up with the great ideas. They are valid entrepreneurs, and you have to listen to them.

But to answer your question, I thought we entered international 10 years ago, I thought you had to do it differently. I thought, you know, this market would require this, this market would require this. And what we found that if you do it the Papa John's way, whether it is Cypress, whether it is Russia, whether it is the United States, if you do it the Papa John's way, it works. And you don't want to get off that.

QUEST: And finally, are you at all concerned wheat prices, commodity prices, the cost of the-pretty hard to make a pizza without wheat.

SCHNATTER: Absolutely. Am I concerned?

QUEST: Yes, the rise-well, obviously, what is happening with Russia, what is happening with global wheat prices?

SCHNATTER: You know, I've been doing this for 32 years. Papa John's is 26 years. We've seen all these cycles. We've seen cheese at $2.20 a pound, in the same year it is $1.20 a pound. So, you don't like it when things go up, you don't like it when commodities shoot up. They just do. So you manage through it, and you know, you get through it. And you know, sooner or later they come back down to market supply and demand prices.

QUEST: John, many thanks indeed. Stay where you are. Many thanks, indeed for joining us. Next time, of course, feel free we are fully bribable with pizzas.

(LAUGHTER)

QUEST: Not even a slice of Margarita in sight. Many thanks.

SCHNATTER: Thank you.

QUEST: All right. In just a moment, decisions, decisions. Would you like a package holiday, or a camper van? Stay-cation or away-cation? Long haul, short haul? Low cost, first class? Don't drag your luggage out of the cupboards just yet. We're going on vacation in a moment.

(DESK BELL CHIMES)

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest, QUEST MEANS BUSINESS, this is CNN. But on this network the news always comes first.

(NEWSBREAK)

QUEST: The death toll from Pakistan's devastating floods is now pushing 1,600. The powerful waters wiped out bridges and roads several weeks ago. Some victims still have had no access to relief. The U.N. says it needs at least 40 additional heavy lift helicopters for aid drops and rescues. The U.S. has pledged to send four more helicopters.

The British prime minister, David Cameron, and his wife Samantha have named their new baby girl Florence Rose Iliot (ph) or Engliot (ph) or Endellion. In other words, I'm not sure how I pronounce that name. The newborn was expected in September, but apparently couldn't wait that long. A statement from the P.M.'s office says mother and daughter are doing very well. The Camerons have two other young children.

Now, summer's last hurrah is looming. In the U.K., coming up next, August bank holiday. North America, it's Labor Day Weekend in the U.S. and Canada. Wherever and whatever it is, it's coming up fast.

So, tonight, we're asking, what's your passport to holiday happiness?

Are you a staycation or a cruise, camping or a package deal?

The question means a lot because tourism is a billion dollar business, we know, so far. And we're making your holiday our business. On Tuesday, we asked whether you should keep up with events at work or learn to let go.

Tonight, how you're spending that precious holiday break.

Package holidays are very much back in fashion. They've risen 32 percent in the past five years, particularly with the recession. They're more popular because they offer value for money and convenience and you know how much you're going to spend. An all inclusive, you won't be involved with things like, for example, extra meals outside. The all inclusive is very in.

Staycations are very popular. The prime minister has joined the throng of Londoners in Cornwall for his staycation. His wife, of course, was pregnant and has just had the child. Because of uncertainties in the U.K. weather, many people are wary of spending it in places where there might be a nasty downpour.

In fact, the majority of you say you're happy to travel abroad -- 86 percent of you -- in search of fun. You also like to go green. Twenty- three percent of you say Thomson First Choice customers book their holidays at hotels which have the Travel Life Sustainability stamp of approval.

All in all, 96 percent of you want to be good to the environment wherever you go.

These demanding holidays, you want to vote -- we're told you want to be able to learn something, maybe learn Shakespeare. You want to learn a new language or you want to learn how to do something better, maybe cook pasta. Thousands of you are booking into language schools across the continent. You're spending money jumping through academic hoops.

Jim Boulden now takes a look at how the package holiday and the holidays we're spending is changing.

(BEGIN VIDEOTAPE)

JIM BOULDEN, CNN CORRESPONDENT (voice-over): Cheap, easy to book and, of late, risky -- the British package holiday is under threat. The Internet allows people to easily book their own travel, while the economic crisis has led to the advent of staycations and to the collapse of numerous short haul package holiday firms -- three big ones just this summer.

PAUL CHARLES, TRAVEL EXPERT: Those that have gone under are those that have priced too low, that have had to discount to survive and which actually just can't survive in the current economic climate.

BOULDEN: One of the benefits of a summer package holiday -- booking early to save money.

UNIDENTIFIED MALE: You do find that there's a seasonal pattern to these things. For tour operators, the cash fill position looks very good throughout the spring and the early summer, as people make bookings. But those bookings aren't paid for by the company until later in the year. So it's in the -- the late summer and -- and the autumn, around about now, that the point of maximum vulnerability approaches for these firms in terms of the cash flow cycle.

BOULDEN: Another benefit of a traditional British package holiday, that's where you pay for every part of the trip once, through one operator. The entire experience is covered by an industry-wide insurance policy, providing people a full refund or letting them complete their holiday as normal, with a guarantee of a flight back home. As these passengers recently found out, after KissFlights went under.

UNIDENTIFIED MALE: We were rung up about an hour later to say that step -- somebody had stepped in and the flights were -- were now on.

UNIDENTIFIED FEMALE: We actually found out by e-mail last night at half past 11 that they've ceased training. But through all the other e- mails, we were able to find out that we could still come in today.

BOULDEN: Thomson Holidays, owned by German travel group, TUI, says short haul bookings from Britain are down 12 percent this year. The long haul is up strongly.

CHARLES: Venezuela or Vietnam, which is increasingly popular, a lot of these places are improving the quality of their hotels, their restaurants. They're realizing there's more disposable income from a very active U.K. population.

BOULDEN: Does that mean the traditional short haul package holiday is dying?

BOB ATKINSON, TRAVELSUPERMARKET.COM: There will always be people who basically want everything done for them in one go. And that could be for a variety of reasons. They might not have the -- the ability, the knowledge or even the will to go looking for the information to do it themselves and possibly save some money doing it.

BOULDEN: Insurance is another reason. For those who like to book the various parts of their holidays separately, they have to pay for travel insurance and negotiate the whole mess if one leg of the journey goes bad, which could include paying again just to get home.

Jim Boulden, CNN, London.

(END VIDEO TAPE)

QUEST: Christian Cull of First Choice and Thomson Holidays, part of the TUI Group, is with me now.

All right, so, what is the -- the rationale this year, in a time of slowdown, in a time where we're coming out of recession, for what people are determined to do?

CHRISTIAN CULL, FIRST CHOICE AND THOMSON HOLIDAYS: Right. Well, at the moment, they seem to be on the beach. They've just walked off a very miserable London street. It hasn't stopped raining since lunchtime here. That's one rationale. People do want to get away from it. Some people are staycating. You said one in 10 is staycating. That leaves us one in nine or 10. We're more than happy to take them on holiday abroad.

CNN wants to go beyond borders. We're helping people do that on holiday.

QUEST: Ah, a nice one.

But the package holiday, which we thought was not exactly dying out. It did make this resurgence during the recession.

As we come into some sort of growth, are you likely -- is that going to continue or are you going to see people wanting to go back to the FIT type traveler?

CULL: I think people want to be -- have -- when they buy a holiday, they really like to know that they don't have to do any worrying at all. We can do all that for them...

QUEST: Right.

CULL: -- it's safe and -- and sure with us. We're the top tour operator. And, of course, we operate across the world. We're a German and London based company, mainly. The U.K. accounts for about 40 percent of the business. And our customers want to know that they're safe, that holiday they really work hard for all year, it's in good, safe hands with us. That's the rationale a lot of the time.

QUEST: As we've seen in the U.K. and elsewhere, holiday companies collapsing this year -- now, obviously, I'll beat you to it. Obviously, you'll -- you're going to promote the advantages of a strong holiday company like your own.

But the truth is the importance now of the security of a holiday company.

CULL: It's very extreme for the customers who have suffered the way they have done over the last few weeks, where people are coming into our shops -- we've got 850 shops in the U.K. -- asking for advice and reassurance and we are able to give them that.

QUEST: Where are people going?

What's the hot -- what's hot and what's not?

Where do the people not want to go?

CULL: People want to go all sorts of place. Tomorrow, we've got a new brochure which we are focusing on Egypt, Morocco and Tunisia. We're opening up a new resort in Aswan, so then people will cruise up the Nile again. Further afield, though, we've got Costa Rica opening up...

QUEST: What do you think...

CULL: -- and what we call multi centers. People are doing a bit of hotel and a bit of trekking or a bit of exploring -- doing two things in one holiday.

QUEST: But is there a discernable trend -- I mean you've got -- you're saying multi-trek -- multi-trekking or multi-tourism.

But what about cruises versus -- I mean cruises have become very popular again.

CULL: Cruises have got fantastic loyal customers, as well. They like it and they come back for more. And their itinerary, of course, gives them such a -- a wide range of things to see and enjoy.

But we -- we think people are going abroad because things taste different, they feel different, they sound different...

QUEST: All right...

CULL: -- when they're away from home.

QUEST: -- hang on. Before you finish that (INAUDIBLE).

If things are going to look different, go on.

CULL: Am I going to put this on?

QUEST: Go on. You put yours on. Yes. Yes.

CULL: OK.

QUEST: Things are looking different. Here's a fruit cocktail. You're quite safe with that.

So things look different.

CULL: Cheers.

QUEST: Cheers.

Good health.

When do you go on your holiday, by the way?

CULL: I just came back a week ago from Thomson holiday in Crete. We've got a sensatory holiday out there...

QUEST: What's (INAUDIBLE)?

CULL: -- it's very nice, indeed, out there -- fantastic service. People want the all inclusive, value for money and quality of service.

QUEST: Cheers.

CULL: Cheers.

QUEST: Forget bank holiday blues, you'll love your holidays. We'll show you some of your vacation snaps in just a moment.

(COMMERCIAL BREAK)

QUEST: As number crunchers fret about gloomy global economies, you've been getting out there and sending us your vacation snaps from all over the planet.

Let us return to more normal surroundings.

Shakat Nabi (ph) of Dubai likes the philosophical approach -- practicing yoga in the Maldives. He reminds us that a dream is not what you see in sleep, a dream is what does not let you sleep.

While in Namibia, Lydia, Lydia Tramonitza (ph) gets her blood racing with a reminder to watch out for the crocodiles if you plan to take to the River Kwandu, where she shot this picture earlier today.

And to South Africa and a stunning shot of Table Mountain that was taken from the company grounds in Capetown and sent to us by April Valet (ph) to mark her trip.

You can send us your pictures. You'll find us on Facebook, e-mail, quest@cnn.com and the Twitter address is, as you already know, is atrichardquest.

Can there be any better reason for us to be talking about the business of holidays than the miserable weather afflicting large parts of Europe at the moment?

Rain, rain and more rain.

Guillermo Arduino is at the CNN World Weather Center.

GUILLERMO ARDUINO, CNN METEOROLOGIST: Where is Richard Quest?

Underneath all this rain in here. I can't even see him. But the weekend is going to be nice, so there is something to look forward to. I think that tomorrow it's going to rain a lot and then Friday will -- well, thanks it's going to be light rain to medium rain and then Friday it's going to rain a lot. And Saturday and Sunday, things are going to be nice.

Tuesday, as you see, some storms moving into London right -- right now. To the north, it's fine. Usually it's the opposite. You know, Scotland with very bad weather and the south with better conditions. But that's not the case today.

Thirty-one in Bucharest, 25 in Paris. Of course, temps are going down in London, at 18; Madrid, my God, 37 degrees.

The strong winds and the severest of the weather is going to be in the east, though. So we can commiserate with people in London, but there it's even worse. And the south, the Med, Richard, we're still going to have cruise ships and how popular they've become in the last years, look at the Med, wonderful. Perhaps in the Baltic Sea it's not that great for the next two days.

So delays, perhaps, a little bit, in London, Amsterdam and that's about it. And then Copenhagen still with bad weather and rain. And to the south, conditions are fine all the way to Milano and parts of Rome, too.

You see this system?

This is a tropical system that is moving away. But I want you to be mindful that we got 200 millimeters in Puerto Angel; also, here next to Puerto Vallarta, we got a lot of rain. We're checking exactly to see how much rain we got -- Richard.

QUEST: Many thanks, Guillermo, at the World Weather Center.

Finally tonight, it's becoming ever clearer -- we love our holidays -- cruises, camping, package and deluxe. We're prepared to spend money getting away from it all. Some of you watching will be luxuriating with weeks off, others barely a long weekend.

Tomorrow, Ali Velshi and I on Q&A looking at the benefits of a vacation for employees, employers and the economy. And we'll also be able to head to head quiz where we'll -- we'll be testing ourselves. It's all at CNN.com/QMB.

And that's QUEST MEANS BUSINESS for tonight.

I'm Richard Quest.

Whatever you're up to in the hours ahead, I do hope it's profitable.

"MARKETPLACE AFRICA" is next.

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