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Past performance does not predict future returns. You may get back less than you originally invested. Reference to specific securities is not intended as a recommendation to purchase or sell any investment.

In this episode of Global Infusions, Tom and Tom consider the history of travel, from missionaries and Grand Tours to ultra-long-haul flights. They discuss the benefits and downsides of tourism, the impact of the pandemic, and the clues to early trade routes that can be found in food. Finally, they cover the super tight labour market, the world’s longest serving employee, supply chain issues in healthcare, and an intriguing ancient tablet that sheds light on Egyptian work/life balance in 1250BC. 

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TR Hello, I’m Tom Record and I’m here with Tom Morris. Welcome to Global Infusions, an investment podcast from the Liontrust Global Fundamental team that takes a long term view of today's stories.


Last month we chatted about demographics – and the megatrends that will define the future. This episode we’re keeping it seasonal and as you prepare for your summer holidays, we’re talking about travel. If your taste buds are tickled or you have any questions for our next episode, please do send them in via your client contact or through liontrust.co.uk.


So sit back, grab a cup of tea and remember that when we talk about individual companies we are not making a recommendation to buy or sell shares and that some of these companies may not be held across Liontrust’s global fund range.


So Tom, Travel is a huge topic that covers history, weather, culture, food, transport and more… so where do you want to start today?

TM – Well I think we should start by acknowledging that even medium-distance travel is a pretty modern invention. Going back to the middle ages, most people didn’t travel much beyond their local market town. If you were very wealthy, or in the armed forces, or some kind of travelling merchant or missionary, perhaps you could cover 20-30 miles/day on horseback, but that was about it.

TR – And then in the late-17th century the idea of the Grand Tour became popular among European aristocrats, who would send their heirs on trips around France, Italy and other places, nominally to learn about history and culture and round them out as gentlemen, but clearly it was a bit of a jolly too.

TM – Yes, and then over the course of the 19th century, as steam powered boats and trains made travel much cheaper, trips became much more common for both leisure and business, and also for a lot of people in the emerging European and North American middle classes.

TR – I think Thomas Cook started organising the first packaged trips in the 1840s.

TM – Yes that’s right – he actually grew up close to where I did, in a town called Melbourne in Derbyshire, which as a bonus fact, is the place that Melbourne in Australia is named after.

TR – Good quiz knowledge!

TM – Sadly it hasn’t come up yet, but I’m waiting for it, along with a round on Japanese stock tickers. Right, so Thomas Cook was very religious, and he used to travel to attend meetings of the temperance society.

TR – the anti-alcohol society.

TM – Yes exactly. So he started organising trips for other society members to attend meetings, using the recently completed railway system. They proved to be very popular, and in the 1850s he organised his first foreign excursion, which took people on a tour of Belgium. In the 1860s he acquired space on Fleet Street, which you can still see the signage for today.

TR – Ah yes I’ve seen that near our offices.

TM – Yes it’s worth a visit for history buffs in the area. So as well as organising tours, Thomas Cook is also credited with creating the system of travel and hotel coupons which were the forerunner to the whole modern holiday industry.

TR – It does seem a bit ironic that a man motivated by temperance ended up creating an industry that now so often revolves around boozy breaks.

TM – Yes that had occurred to me too!

TR – So returning to your original comment, travel has come a long way very quickly. You can now fly directly from London to Australia, a journey that took weeks on a boat in the 19th century, 12 days and 31 stopovers on planes in the 1930s, and just 15 hours on a direct flight today.

TM – 31 stopovers!

TR – Yes, costing £195, which would be about £10,000 in today’s money. So only for determined and wealthy travellers.

TM – Indeed.

TR - Several years ago I went to a dinner ahead of one of the Lions tours and they had an old player there who regaled us with tales of how they took a dozen flights to get to Australia.  My favourite anecdote was when a couple of the players were sent home early for getting in a fight. They had to take the boat and arrived home a month after everyone else!

TM – Ha! Boat punishment! So relatively affordable mass travel and tourism has brought a lot of benefits to both travellers and the places they visit, but it’s also brought costs, from the hollowing out of cities like Venice, to environmental issues in places like Mount Everest, which is now covered in rubbish and dangerous queues waiting for selfie opportunities.

TR – Venice is an interesting example, as a place that exists almost solely for tourism these days. There has been a great deal of controversy there over the cruise ships in particular. Cruise tourists swarm the place during the day, but don’t contribute as much to the economy as they stay on the giant boats rather than in local accommodation.

TM – the size of the ships is quite shocking when you first see one. I almost couldn’t believe my eyes when I was last there in 2017 – it looked ridiculous against the narrow canals and palaces and bridges. There are also concerns that currents from the giant ships cause damage to Venice’s delicate foundations, and they certainly cause damage when the collide with other boats and docks, as they did in 2019.

TR – I think Venice last year banned the largest cruise ships from entering the historic centre of the city – instead they now have to dock at a nearby industrial port. Not as glamorous, but it seems like the right decision.

TM – The idea of places being overrun with tourists also raises interesting questions about how you might seek to ration supply. Museums like the Louvre in Paris and the Accademia in Florence can only accommodate so many people at a time, leading to big queues wanting to get a look at the Mona Lisa or Michelangelo’s David.

TR – So in a normal economic problem, you would match supply and demand by increasing the price, but when it comes to cultural goods, it may not be socially acceptable to raise the price as high as it needs to go?

TM – Exactly – very high prices would fix the overcrowding problem, but they’d also restrict access to just the richest. Rationing access in that way feels regressive, and so it has to be done some other way.

TR – like queueing.

TM – Yes exactly, but that has downsides too, creating poor experiences for people, especially older people and those less able to stand for long periods.

TR – Museums can make themselves bigger and more able to handle crowds – I know the Louvre recently renovated the room that holds the Mona Lisa so that it deal with 30k visitors each day, but it’s still nowhere near enough.

TM – My view is that they should open close to 24hrs a day, with timed tickets, charging ultra-high prices for peak times and closer viewing angles, and then using that revenue to subsidise cheaper entry for everybody else over a much larger range of opening hours than the current 9am-6pm. Why not offer semi-private viewings late in the evening for ultra-wealthy people to attend after their dinner at the George Cinq, and then use that to pay for opening the museum on a Tuesday, when it is currently closed?

TR – That does make some sense. So one of the things that you touched on there and really stands out to me is that travel is about broadening experiences. Which is a really important part of challenging your perceptions, thinking differently and keeping an open and happy mind. Now, get this – a recent survey suggested that the anticipation of going on holiday makes people happier. 

TM – Now that’s not a great surprise – personally I absolutely love researching hotels and restaurants and that sort of thing.

TR – True, but the increase in happiness is almost as much as you get from going on the holiday itself.

TM – So book your holidays well in advance to maximise your happiness!

TR – Indeed! So Tom, what are you looking for when you’re seeking out restaurants on your travels?

TM – Well, I really enjoy discovering local ingredients, as well as the way that people share their meals and their customs around food – it’s just endlessly fascinating.

TR – OK, so let’s go on a bit of a food travel odyssey. Quick question - Do you know where the word tomato comes from?

TM – Err – no – to be honest I don’t.

TR – So a clue is the word tomatl means ‘plump fruit’ in its native language.

TM – Quite fitting as it is technically a fruit not a vegetable.  Anyway, maybe it’s from Central America? The tl syllable is something you see occasionally in that region, like the Axolotl in Mexico – a cute salamander and a great scrabble word.

TR – yes it came over from the Aztecs to Spain in the middle of the 16th century, and was originally yellow. The first reference to it was as a mala aurea or golden apple in latin. Then a decade later the red variety came over and became more popular.

TM – and then presumably it spread across Europe with the tomato name.

TR – except in some places like Italy, where it took the Italian name pomo d’oro – the apple of gold.  The Pomodoro name then travelled through Russia as far as the Uighurs in China. So you can see how the food travelled by the words that are used.

TM – Very interesting – so the only thing I can offer on this topic is a snippet about tea - if a country got its tea by boat, then it’s usually called tea, and if it came overland via the silk road then it’s usually called Chai or char.

TR – and that’s to do with where in China it came from – the northern overland route, where they spoke Mandarin, or the SE ports where they spoke Southern Min and… so you can use language to map the ancient trade routes. Travel and history are intimately linked.  Looking to the future, most of the world has worked out how to live with covid, but China stands out as pretty much the last proponent of zero covid, which is impacting global travel quite substantially.

TM – Yes, before covid, China accounted for over 20% of international tourism and well over a quarter of a trillion dollars of spending.

TR – and the potential for spending growth is immense – as only 7% of Chinese citizens have passports, and we’ve recently been hearing that it is getting increasingly difficult to get a new or renewed passport because of covid.

TM – So that source of tourism looks like it’s on hold for a while, but with huge pent up potential.

TR – and it is a great place to visit… a few years ago for their birthdays we gave my parents a trip to East Asia and expected them to want to go to Thailand or Japan. Instead they built an amazing tour around China – from the terracotta army in Xi’an to a cruise on the Yangtze and a walk on the great wall as well as visits to modern cities and ancient villages. They had an amazing time.

TM – Yes – a country rich in history and one that has experienced a lot change. But of course, little chance of visiting at the moment. So you mentioned COVID and pent-up demand for travel and leisure, which has been one of the big investment themes of the last couple of years.

TR – There was a point in 2020 where the consensus seemed to be that travel was going to be impaired for many, many years, and the share prices of many of the companies involved got absolutely slammed.

TM – Indeed, but even back then, the seeds of a mega boom were being planted. Government stimulus, central bank easing, the need to blow-off steam after being locked in our homes, and opportunities for leisure companies to reset their cost bases and implement apps to make things like check-ins faster and more efficient, as well as more COVID safe.

TR – I know that a lot of commentators were talking about a 5yr+ road to recovery.

TM – Yes, but in the end some parts of the industry did it in one year. Nevada gambling revenues actually hit an all-time high in 2021. Vegas was making record profits even before most business travellers and conferences had returned.

TR – Amazing.

TM – Hotel companies have also been reporting record pricing for key dates in places like Miami. In fact STR, which is an industry data provider, reported in April that the three highest price weeks ever recorded for US hotels all occurred in the period between December 2021 and March 2022!

TR – and I would guess one of the drivers for that has been the disruption of the construction pipeline for new hotels. Rebounding demand plus constrained supply equals excellent pricing power.

TM – exactly, and you can see a similar dynamic at play with airlines at the moment. Lots of the legacy carriers retired old planes and cancelled orders for new ones during the pandemic, leading to quite a tight market as demand bounces back. We were actually talking to easyJet’s management about exactly that this morning.

TR – And it’s the same around the world – Copa in Panama is now accelerating deliveries of its new planes. So let’s move on to the news – Tom, what do you want to start with today?

TM – Well the hot labour market is very topical at the moment, with record tightness in many countries - the UK for instance has more job openings than unemployed people for the first time on record. The Quits rate, which measures the % of people voluntarily leaving their jobs in the US, was at 3% in March, the highest since the data series began in 2001.

TR – So if it carries on at this rate then over a third of employees would leave in twelve months. It really is super hot – and of course that’s one of the things that’s driving prices up to create today’s high inflation. But there are also signs that things might be slowing with hiring freezes at Meta, Twitter and Wayfair and large companies like Amazon and Walmart saying they are overstaffed.

TM – Exactly, so in that context, a story caught my eye this month about someone who has broken the record for the longest time working at the same company.

TR – OK – 65 years?

TM – 84 years! Walter Orthmann, a 100 year old Brazilian man, has worked at the same textiles company since 1938! So linking back to today’s main topic, Orthmann credited travel as one of the reasons why he has stayed so long – the ability to travel round the country meeting suppliers has helped to keep the job fresh for him.

TR – Fascinating – says a lot about culture and job design, not just pay, as a way of creating loyalty. So the first thing I want to bring up this episode is on gender and books.  So specifically looking at the use of male vs female pronouns in US published books.

TM – ok, and what does it show?

TR – well, there are 75% more male pronouns per 100 words than female pronouns, which reflects an unnecessary but persistent bias throughout literature.  The good news is that this is on a balancing trend – a hundred years ago the ratio was over 3x as many male pronouns as female. So we’ve seen some slow improvements there.

TM – Yes really slow – but it’s a very interesting piece of analysis. The next item from me today is another one on a labour market theme. I saw an article from the British Museum about a 3,200 year old Egyptian tablet that was used to record reasons why people missed work.

TR – An absence register?

TM – Yes exactly, and it’s fascinating. It turns out that a lot of the reasons for missing work today were also true in 1250 BC. Things like being ill, or looking after a family member, or attending a funeral. You see entries that say things like ‘suffering with his eye’, or ‘embalming his brother’. You also see some entries that don’t occur so often today:

TR – Such as…

TM – Well a lot of people took time off for brewing beer, for instance. One notable entry just says ‘bitten by a scorpion’ – it’s not clear if he returned or not! Several people took time off to fetch stones for the local scribe, to attend feasts, and one guy was apparently ‘strengthening his door’. I just thought that it was interesting that work/life balance has clearly been an issue for thousands of years, largely for the same reasons it’s hard to get right today.

TR – the next from me is on supply shortages from the global pandemic. Now, we’d hoped that by the middle of 2022 we’d be past these, but the lockdown in China has led to shortages of a specific dye that GE makes and is needed in CT scans. Hospitals in the US are rationing this dye and only using it for emergencies… they don’t expect normal supplies for months. There are still a lot of supply issues that can be sorted out over the coming year.

TM – The ripples of disruption have shown how finely tuned the global supply network is – so many interdependencies, and optimised for cost, rather than resiliency, which is something that surely is now set to change. The final article I wanted to mentioned this week is on cheese, specifically parmesan.

TR – So I know that big wheels of Italian parmesan are very valuable – I think some specialist banks even take them as collateral for loans?

TM – Yes indeed. Genuine Parmigiano Reggiano is very valuable indeed. So valuable that there is massive market for fakes. The Italian trade association reckons that authentic parmesan sales are around $2.4bn a year, while fake parmesan sales are around $2.1bn, so really material.

TR – That sounds like a big problem.

TM – It is, which is why for the last 20yrs the big wheels of genuine parmesan have been marked with unique tracking codes that can be used to verify their authenticity. The problem is that the counterfeiters are getting better, much like with banknotes, and so new security measures are required.

TR – So holograms and that sort of thing.

TM – pretty close – they’re going to start implanting microtransponders into the rind of the cheese to allow for much more secure tracking and authentication, starting with a test programme of 100k.

TR – fascinating. Now for my final news snippet, I’m going to talk about a confluence of bitcoin mining and fossil fuels.

TM – so the intersection of the new wonderkind and the old economy?

TR – exactly.  As you know, crypto mining uses a lot of electricity. Just bitcoin, so one cryptocurrency, uses more power than Finland and its 5.5m people. So we’re seeing cryptominers doing what you’d expect and targeting ways to get cheap power. This story I came across is looking at stranded gas.

TM – This is natural gas that is produced but has no pipeline to take it somewhere useful.

TR – yes, so the cryptominers are coming to the gas… and the gas is being burnt at the wellhead to make electricity to fuel the calculations that earn bitcoin. You get these giant containers full of cryptomining equipment next to generators burning the gas in the middle of a field in Pennsylvania.

TM – a stark reminder that not all new technologies are environmentally friendly!

TR – indeed.  Thank you for listening to Global infusions - a podcast that believes that the best discussions are had over tea and cake. We hope you've enjoyed your cuppa and our thoughts on travel. Please do subscribe through Apple or Spotify and with that we wish you goodbye!

TM – Goodbye!


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