The Permanence of Change | Zoom Towns and Banks

Change is the Only Constant: In gathering unique and interesting stories for this week, a common thread became apparent: the stunning speed of disruption moving through nearly every facet of our society, whether we realize it or not.

So much has been accelerated by the pandemic in the way we live our lives. This is both comforting and a bit scary. We are witnessing the future approach faster than ever. The year 2020, however flawed, has given us a glimpse into what, say 2025, would have looked like without the pandemic. This may be encouraging as we are heading in the direction we were going anyway, but rapid changes can be disorienting.

The way we work, where we live, how and if we travel, how we bank, and how we seek entertainment—it is all changing before our eyes. We hope it is reassuring to have us, the team of Compass Ion Advisors, alongside, that you may value our relationships more than ever. As always, please reach out to us if we can help co-navigate with you through these turbulent times.

First, there were Boomtowns. Now, there are Zoom Towns: In an article from Fast Company, it appears the pandemic has accelerated the rate by which people who are able to work remotely picked up and found new towns to call home. This has put a strain on many of these “gateway communities” in the process. Admittedly, as the article notes, living on a lake in Sandpoint, Idaho does have a nice sound to it.

“A new paper published in the Journal of the American Planning Association shows that populations in these communities were already growing before COVID-19 hit, leading to some problems traditionally thought of as urban issues, like lack of affordable housing, availability of public transit, congestion, and income inequality. And while COVID-19 has accelerated the friction, the study suggests that urban planners can help places adjust.

There has been a drastic increase in remote work since March, when the pandemic hit the U.S. Nearly 60% of employees are now working remotely full or part time, according to a recent Gallup poll. Nearly two-thirds of employees who have been working remotely would like to continue to do so, according to that same poll.”

TSA Screens Over 1M Passengers on a Single Day for the First Time Since March: The Transportation Security Administration (TSA) screened over one million passengers Sunday, October 18, representing the highest number of passengers screened at TSA checkpoints since March 17, 2020. TSA screened 6.1 million passengers at checkpoints nationwide during the week (10/12-10/18), the highest weekly volume since the start of the pandemic.

“TSA has been diligent in our efforts to ensure checkpoints are clean, safe and healthy for frontline workers and airline passengers, implementing new protocols and deploying state-of-the-art technologies that improve security and reduce physical contact,” said TSA Administrator David Pekoske.

Although passenger volumes remain well below pre-pandemic levels, the one million single-day passenger volume is a noteworthy development that follows significant TSA checkpoint modifications in response to the COVID-19 outbreak. TSA has been deploying acrylic barriers and technologies that reduce or eliminate physical contact between passengers and TSA officers.

Why the Survival of the Airlines Depends on Frequent Flyer Programs: Despite the signs of increased travel, this article from Medium explores how the airlines, hanging on by the thread of a government bailout back in April, have resorted to all sorts of strategies and tactics to remain solvent with air travel still down 70%. One approach has been to borrow against their sizeable physical assets like aircrafts, their flight routes, and landing hubs. It turns out the real crown jewel of their assets may be their enormous loyalty programs for points and miles, which attract the best customers.

“The Financial Times pegs the value of Delta’s loyalty program at a whopping $26 billion, American Airlines at $24 billion, and United at $20 billion. All of these valuations are comfortably above the market capitalization of the airlines themselves—Delta is worth $19 billion, American $6 billion, and United $10 billion.”

Banking May Not be Any Easier than Airlines: If you think being an airline is hard, consider this chart from Ark Invest, which shows the growth of deposits at JP Morgan since 1990. Over the last 30 years, JP Morgan has orchestrated five major mergers and acquisitions to become the behemoth it is today, including nostalgic names like Chemical Bank, Chase Manhattan, and Washington Mutual, acquired during the Global Financial Crisis (GFC). Around the time of the GFC, and perhaps because of it, upstarts like Venmo and Square and other similar “digital wallets” as they are known, have crashed the party with exponential growth in users in a fraction of the time.

When Live Sports Defect, Linear TV’s Subscribers Will Cut the Cord per Ark Invest: Without live sports, linear TV would lose one of its most important value propositions. According to a study done by The Trade Desk (TTD), live sports are preventing 60% of cable customers from cutting the cord. To keep their customers engaged, linear TV providers have paid billions of dollars for the rights to broadcast live sports. Within the next year, contract negotiations will begin for three of the four major sports leagues in the US. The NFL, MLB, and the NHL will be able to cut ties with the major networks in 2021. But will they? While sports leagues have been experimenting with streaming TV for years, no major team has struck a streaming-first national broadcasting deal. During the past 40 years, sports leagues have extracted more from them in successive rounds of negotiations, the latest round generating $10.8 billion per year across the major four league sports.