Editor’s Note: Connecting the Dots is a series of monthly conversations with Michael Dominguez, President and CEO of Associated Luxury Hotels International. The series examines issues in the global economy in 2024 that will “connect the dots” to be helpful not only in business but in life as well. This installment is moderated by Tim Altbaum, Founder and CEO at Vario, a full-service A/V and production company. Altbaum is president-elect of the MPI DFW Chapter, a former board member of NACE, and holds CSEP, CMP, HMCC and CMM designations.  

 

Tim Altbaum: By definition, did we have a recession? Did we not have a recession? You talk about everything's been trending positive, and at some point, the bubble's going to burst. What are your comments on that? At least by definition. 

 

Michael Dominguez: I think it is a miss on our part that we all know in 2020, we had a recession. A recession for the last 40 years has been defined by two consecutive quarters of declining GDP. We had that when we shut down the country, that everybody understands. The next one that we had a big argument in this country about was at the end of ‘21 and early ‘22, where we had two declining quarters of GDP. By definition, that was a recession. The reason I think it's important, politically, nobody wanted to admit that we were having a recession. Economically, if we did have a recession, this means this is an expansion, and we are expanding, and we should have more confidence around this expansion. 

 

 

Altbaum: Well, you can't have a recovery without a downturn. No one wanted to admit we had a downturn. Therefore, we're in this extended period of uncertainty, because are we recovering or are we just maintaining? We're kind of going up. But you had to have a down to go up, right? 

 

Dominguez: Exactly. I was joking that the best way I've always explained recessions in the economy, it's like dieting. When we put on too much weight, we tend to diet to get healthy. You tend to diet a little bit to make sure we're healthier. It's the same with the economy. When our economy gets too big, we need to diet a little bit. 

 

Recession

 

Altbaum: But you don't want to go too fast. 

 

Dominguez: Exactly, you don't want to crash diet. And that is 2008. That's what you want to try to avoid. And you know, one of the things that I think is important and the reason the ‘R’ word is so scary when you talk about recession is if you're under 40, the only two recessions you've ever experienced were the worst two we've seen in 50 years. And I'm old enough to know, we had recessions that you barely felt. It was just where we got into very stagnant growth for an 18-month window, and then we run. If there's any point of optimism I can give to everyone, the difference between a bull market and a bear market. Are we growing, are we shrinking on the market side of it? A bear market's average time is 18 months. The average bull market over the last 40 years is almost six and a half, seven years, so even if we're in that downtime, it's not going to last very long. Historically it's telling us it's not going to last very long. 

 

Read more installments of Connecting the Dots at alhi.com/industry updates