🎙️ Cruisin’

🥇 Happy Monday, folks. As gold medals start getting handed out at the Paris Olympics, athletes aren’t the only ones repeating rewards from gold — the metal’s prices keep climbing.

Gold has risen 20%-plus over the past year amid geopolitical tensions, its reputation as a store of value, and purchases by China and other central banks looking to diversify from dollar-based assets.

— Matthew & Shawn

Here’s today’s rundown:

Today, we'll discuss the biggest stories in markets:

• The changing economics of America’s rural towns

• The cruise industry’s best hope

This, and more, in just 5 minutes to read.

Chart(s) of the Day

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In The News

🇺🇸 The Changing Economics of America’s Rural Towns

Some mid-size cities and suburbs are thriving post-Covid. But in some parts of the country, there are not nearly enough willing and able workers to fill open jobs. 

Case study: Take the small town of Ashland, nestled in northern Maine, which thrives thanks to the dedication of people like Lendell Tarr. With a population of about 1,200, Ashland relies heavily on Tarr, who, at 65 years old, wears many hats to keep the town running smoothly. What retirement?

• As recreation director, Tarr organizes and oversees the town’s sports programs, ensuring local children can access recreational activities. He also drives Little League players to their away games. He cleans the town office, assists seniors by taking them out for meals, mows the cemetery lawn, and even steps in to drive ambulances and school buses when needed.
  

• But Tarr wants to retire. “Fishing is calling me,” he admits, highlighting his desire to step back — a prospect that worries the town manager, who grapples with replacing Tarr. “He just can’t retire,” Martin states. “There’s no way I could have another Lendell doing the lawns, the bus driving.”

Multiple hats: Ashland's struggle to find and afford workers is not unique. Small governments across the U.S. face similar issues, often leaving remaining employees to pick up the slack, according to a new report from The Wall Street Journal headlined: “Rural Towns Are Aging, Cash-Strapped and in Desperate Need of Workers.”

Other residents may serve as the town’s deputy clerk, assistant librarian, and volunteer firefighter, and some joggle roles as police officers and the town’s code enforcer.

A country of towns: America’s big and medium cities dominate headlines, but the U.S. is dominated by small towns scattered between urban centers.  

So, it’s no surprise that the rural town employment issue extends beyond places like Ashland, Maine. In Texas, about two-thirds of cities with populations between 3,000 and 5,000 lack a finance director.

Why it matters:

Many smaller cities face similar shortages, often resulting in employees without financial management experience stepping in, which can lead to uncorrected bookkeeping errors. 

The replacement issue: Federal data reveal that the public-sector workforce outside metropolitan areas tends to be older, increasing the pressure to replace retiring workers. Local officials and government associations across many states report persistent challenges in finding qualified employees willing to work in small-town offices. 

• Rural areas have long struggled to retain or attract young residents starting their careers, often due to non-competitive salaries.

Getting older: One public sector CEO noted, “We’re going to have to get aggressive about attracting the next generation of workers to our towns.” 

• The hiring challenges span big cities and small towns, but the impact is often more visible in smaller communities, where local government offices provide essential services.
  

• As positions remain unfilled, regionalization of services becomes more likely.
  

• Maine faces unique challenges due to its aging population, with a median age of about 45. In Aroostook County, the population is much older. Limestone, near the Canadian border, has struggled with retaining town managers and has lost services over the years, including its ambulance and police departments.

One retired U.S. Customs and Border Protection agent took on multiple roles in Limestone out of necessity, including road commissioner, local health officer, and animal-control officer. He was “happily” retired, but now he’s working to address bookkeeping issues stemming from government instability. He isn’t sure when he’ll be able to retire for good. 

Read more

More Headlines

📈 Bitcoin almost hits $70,000 amid 2024 annual conference in Nashville

🍔 McDonald’s earnings, revenue miss estimates amid consumer pullback

🇮🇳 India's private capital-backed exits are on a tear  

🏠 U.S. home insurers report more than $15 billion in underwriting losses in 2023

📱 Apple releases first preview of its long-awaited iPhone AI

💪 Warren Buffett says one habit separates dreamers from doers

🛳️ The Cruise Industry’s Best Hope

For years, cruise ships have been a thing for mostly Baby Boomers and retirees. Lately, however, the younger generation has been jumping on board. Yes, cruise vacations are amid a resurgence in popularity, driven by an unexpected demographic: young travelers. 

Cruises are attracting Millennials and Generation Z in large numbers. Royal Caribbean Cruise reports that half of its passengers belong to the younger age group—Millennials and Gen Z are the fastest-growing segment of their customer base. The shift has prompted a fall in the average age of cruise passengers for two consecutive years, a trend that had remained stagnant since at least 2016.

“Even honeymooners have been asking about cruises,” said the head of a travel agency whose cruise business has quadrupled in the last two years. “If you would’ve said that 10 years ago, I would’ve said you’re on crack.”

Royalty: Nobody has benefited from the trend more than Royal Caribbean, which swiftly recovered from the pandemic and launched two of the largest cruise ships ever built. 

• Since hitting a low in March 2020, Royal Caribbean's stock price has surged nearly 600%, outperforming Carnival, up 88%, and Norwegian Cruise Line Holdings, gaining 142%.
  

• Royal Caribbean's new ships, featuring upscale dining options, adults-only areas, and private Caribbean islands, have broadened its audience. Its 2024 earnings are projected to be 50% higher than their pre-pandemic levels in 2019.

Zoom out: The cruise industry as a whole is catching up with the broader travel sector. In 2022, ocean cruises carried 31.7 million passengers, a 7% increase from 2019, despite a 12% decline in international tourism over the same period. This year, cruises account for 7.2% of US travel expenses, up from 5.8% in 2019. It’s fairly slow but steady, with noteworthy growth that bodes well for big cruising companies. 

“I don’t think this is a fad or a trend. I think this is very much how this group of customers now, Millennials who are aging, this is how they want to consume experiences,” Virgin Voyage’s CEO told Bloomberg. “The trends that we’re on, I believe, are very much fundamental shifts in consumer behavior.”

Why it matters:

The pandemic exacerbated a trend that younger Americans set: They prioritize travel and experiences over things like homeownership.

And, look, cost is obviously a big factor for most travelers, especially younger ones, but cruises are typically cheaper than other vacation options. Advocates believe cruising is a cost-effective way to see the world. 

By the numbers: In 2023, the price of booking a cruise was 40% below a comparable land-based vacation, and although this figure has now adjusted to around 20%, it’s a sizable difference. 

• Broadly, the rising cost of travel has further boosted the appeal of cruises. Since January 2023, vacation expenses have jumped by 13% compared to pre-pandemic levels. The cost of dining out and car rentals has increased by more than 20% since 2019. Airfares have remained stable, but tickets often exclude amenities like carry-on bags.
  

• Social media influencers are also driving the shift. Deloitte’s 2024 travel outlook found that 42% of Gen Z and 26% of Millennials use short video content to plan their trips, compared to just 12% of Gen Xers. “Social media has put cruising more on people’s radar as something that’s not just for old people,” said one cruise blogger. 

Read more about the cruise industry's outlook

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Quick Poll

On Friday, we asked: Are you looking for a job right now? Why or why not?

— Just over half of folks aren’t looking for a job. One reader said, “In 2022, I took an early retirement buyout from my employer at the time from which I had expected to retire. They had a reduction in force. Life happens. I now have a job I really enjoy, and I hope to stay here until I retire in ~7 years.” One respondent added, “I own my own business, always looking for new possibilities, but will definitely remain my own boss and look for growth in new businesses and investments. ”

Another said, “Work is overrated. It is bad for my health, and I prefer to be semi-retired. If a job finds me, I might work a short-term assignment.” Another said, “Recently retired and oh so glad I don’t have to deal with that anymore.”

— Among people who are looking, a reader said they are “focused on culture, ability to grow a platform and leadership position within a solid team,” while another said “I am in the process of applying for one; have been meaning to for a couple of years now.”

See you next time!

That's it for today on We Study Markets!

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