Monday Business Briefing: Airport officials optimistic; Airbnb to collect Kentucky state taxes; CHI posts operating loss for year; and more
Welcome to the Sept. 18 Monday Business Briefing, your private business intelligence digest from Insider Louisville.
Airport officials optimistic about air service, approve millions in improvements
In a report to the Louisville Regional Airport Authority board last week, Tom Tyra, the authority’s director of marketing and air service development, said he didn’t believe the low-cost international flights to Iceland would impact Louisville International Airport.
Tyra noted that the flights were only offered certain days and at off-peak times. For example, a WOW Air flight offered out of Cincinnati will leave at 11 p.m.
“That is not so much an impact on what our traffic is,” he said, “because it’s a very unique type of service.”
And most travelers probably won’t stay in Iceland but simply use it as a stop on the way to somewhere else in Europe, Tyra said, arguing that people could just as easily fly from Louisville through Atlanta or Detroit to their ultimate destination.
“We will have to see what is the sustainability of that type of service,” he said.
Louisville holds on to more than 90 percent international travelers because the surrounding airports, including Nashville, Indianapolis and Cincinnati, only have a couple of direct international flights to offer.
Rather than focusing on international, Louisville is working toward improving its air service domestically with flights to Los Angeles and Boston. Tyra said the newly formed Louisville Regional Airlift Development‘s efforts and the plans for a minimum revenue guarantee are attracting attention. With the momentum, Louisville needs to focus on persuading airlines that there’s demand for those flights and the demand will continue into the future.
“We have a really dynamic place here, lots of good stories going on, and we need to show why Louisville is important on the map and not go ‘It would really help us,’ ” Tyra said. “Airlines hear that from every airport. It’s that narrative that makes us different and special.”
This month, air service operating out of Louisville International Airport offered 7,102 seats daily, up nearly 500 seats from September 2016. That number will go up in the next couple of months as Allegiant Air adds a new weekly flight to Fort Myers, Fla., and starts two new routes — one to Phoenix and the other Las Vegas.
At the Louisville Regional Airport Authority board meeting last week, the board also approved five contracts totaling nearly $9 million to — among other tasks — repave a runway and taxiway, repave and remark the area where aircraft park, and provide engineering services for the Bowman Field Airport Area Safety Program. —Caitlin Bowling
Airbnb to start collecting Kentucky state taxes
Starting Oct. 1, the home sharing site Airbnb will start collecting and remitting sales and transient room taxes to the state of Kentucky.
State sales tax is 6 percent, and the transient room tax, which typically is charged to hotel guest, is 1 percent. The state estimated that the agreement with Airbnb to collect the taxes will result in $1 million in additional tax revenue to Kentucky, according to a news release.
“Our goal is to work with all taxpayers fairly and equitably to ensure the appropriate taxes are paid, and this agreement achieves that. Kentucky’s tourism sector is a huge economic driver for the state, so it is important to collect revenues for enhancing the quality of life for Kentuckians and our visitors,” Department of Revenue Commissioner Dan Bork said in the release.
In 2016, Airbnb host in Kentucky earned $10.2 million in supplemental income from the roughly 80,000 guests who stayed in their houses, the majority of whom stayed in Louisville, the release notes. There are 3,100 total active Airbnb hosts in Kentucky.
CHI posts operating loss for fiscal year as it restructures, awaits merger
Catholic Health Initiatives, the Colorado-based health system that plans to unload its money-losing hospitals in Louisville, is in the midst of a turnaround as it enters the final stages of a planned affiliation with Dignity Health of San Francisco.
On Friday, CHI released its annual report for the fiscal year 2017 ended June 30, which showed that operating losses widened to $585.2 million from $371.4 million in 2016.
Even so, a jump in nonoperating gains, including investments, allowed the system to show a net surplus of $128.4 million in contrast to the $575.6 million net loss in 2016. Revenue for 2017 was $15.5 billion up slightly from 2016.
And the faith-based system notched a 16.4 percent gain in operating EBITDA in fiscal 2017, before restructuring, impairment and other losses, of $810.7 million. CHI said in its financial statement, “Fiscal year 2017 represented a transformational year for CHI operationally and strategically.”
Regarding its affiliation with Dignity, CHI said, “Catholic Health Initiatives and Dignity Health are in the final stages of the due diligence process to assess the potential alignment of the ministries and are pleased with the progress made to date.”
But the system offered no update on the sale of its hospitals. In May, CHI approved a plan to sell or otherwise dispose of substantially all of the Louisville market acute care operations, including certain entities of Jewish Hospital and St. Mary’s Healthcare.
CHI transitioned the University of Louisville Medical Center operations, management and control back to the University of Louisville, effective July 1.
And CHI assumed complete ownership of KentuckyOne, effective Sept. 1, when it purchased the non‐controlling interest from Jewish Heritage Fund for $150 million. —Mickey Meece
Brown-Forman to modernize its Louisville cooperage, eliminating 70 jobs
Brown-Forman is the only spirits company that owns its own barrel-making cooperage, and the company announced on Thursday that it was investing $45 million to modernize its Louisville cooperage, reducing operations costs by improving efficiency, but unfortunately eliminating 70 jobs in the process.
The cooperage will continue to employ nearly 205 people, and all of those let go will be offered transitional assistance.
“Making this investment will help ensure the long-term viability of our cooperage in Louisville, reduce injuries and preserve our unique competitive advantage of barrel-making,” said Alex Alvarez, chief production officer of Brown-Forman, in a press release. “While the improvements will result in the loss of some hourly positions, we believe this will strengthen the long-term viability of the cooperage.”
The cooperage was established in 1945 and will remain open during construction. It produces more than 2,500 barrels a day for B-F products like Jack Daniel’s, Old Forester, Woodford Reserve and others. —Sara Havens
Funding begins to percolate for local startups
After a somewhat sluggish start to the year, in part due to the booming economy, funding for startups locally seemed to be lagging. Now, investors are back in the game with more gusto.
Of course, six startups just won $25,000 and 12 weeks of mentorship and education from the annual Vogt Awards. The Community Foundation of Louisville and GLI’s EnterpriseCorp are partners in the program.
EnterpriseCorp also recently announced Who’s Been Funded, and that included a 2016 Vogt Award winner, Breath Diagnostics, which received $350,000 from an undisclosed source.
The company is implementing breath analysis technology to provide early detection for cancers and reduce patient exposures to costly, high-risk medical procedures, according to a report presented by Lisa Bajorinas at the September Venture Connectors luncheon. (Venture Connectors next lunch meeting is on Oct. 4 and features Sheri Rose, executive director of Thrive Center Inc., a nonprofit technology innovation and education center that is working to enhance quality of life for those age 50 and older.)
Another medical concern, and a 2017 Vogt winner, RCM Brain, raised $450,000 from local angel investors. The company says it helps health care providers collect more revenue from insurance companies by analyzing their contracts and claim payment information. Last month, XLerateHealth, a Louisville-based health care startup accelerator, announced that RCM Brain was part of its fifth class of health care startups.
Weather Check, a 2017 Vogt winner, received $100,000 in addition to the $25,000 Vogt money, from an undisclosed source.
Academic Platforms, a full-service education development company serving university and speciality education markets, received $600,000 from yLoft.
As Insider already mentioned, the biotech startup Apellis Pharmaceuticals, based in Crestwood, Ky., said it had secured $60 million in funding to help it with clinical trials of a drug that treats a rare, chronic, life-threatening blood disorder.
So far this year, according to EnterpriseCorp, 40 companies have been funded to the tune of $26.7 million with a capital investment of $86.7 million. Next up, EnterpriseCorp is planning its annual Evening of Entrepreneurship at the Kentucky Derby Museum on Oct. 4. —Mickey Meece
Hands-only CPR training at Cincinnati and Indy airports
Travelers at the Indianapolis and Cincinnati airports with some time on their hands can put those hands to good use to learn CPR.
Those are two of seven airports across the country offering hands-only CPR training via a kiosk. CVG introduced its kiosk this summer at Concourse A near Gates A6 and A7.
The American Heart Association and the Anthem Foundation, the philanthropic arm of Anthem, Inc., introduced the Hands-Only CPR Training Kiosks that teach the simple, yet lifesaving skills of Hands-Only CPR.
Each year, the AHA said, more than 350,000 cardiac arrests occur outside the hospital, and about 20 percent occur in public places such as airports.
Hands-Only CPR has been shown to be as effective as conventional CPR for cardiac arrest when it occurs in public, and CPR can double or triple a victim’s chance of survival, according to the AHA.
The interactive kiosks are designed to train large numbers of people on this simple, lifesaving technique. Each kiosk has a touch screen with a short video that provides an overview of Hands-Only CPR, followed by a practice session and a 30-second test.
So far, the AHA says, more than 20,000 visitors have learned Hands-Only CPR from the Association kiosks installed in 2016 at: O’Hare International; Indianapolis International; Hartsfield-Jackson Atlanta International; and Baltimore-Washington International. A representative from Louisville Regional Airport Authority said it had not yet been contacted by the AHA. —Mickey Meece
Startup Weekend Louisville is less than a month away
Startup Weekend Louisville, which describes the experience as summer camp meets shark tank, is on. This year, the action-packed weekend will be held at the PNC Gigabit Experience Center Oct. 13-15. Registration is now underway.
No other city in the world has held as many consecutive Startup Weekends as Louisville. Here’s what to expect, based on previous weekends, according to its website:
- 54 hours of hustle with likeminded team mates
- An opportunity to pitch any idea for up to 60 seconds
- A great T-Shirt (always the high quality soft cotton blend type, none of the heavy cotton ones)
- 7 meals (see if you can do that for the price of the ticket)
- Coffee, drinks & snacks all weekend
- Mentorship by the region’s who’s-who of startups
- Ability to pitch the progress you’ve made to a panel of entrepreneurs & funders
- FREE .co domain (given out Friday)
- $300 Google Cloud credit
- Fun, tons of fun!
Glassdoor ranked Louisville 10 in its list of Best Cities for Jobs 2017, which got the attention of Mayor Greg Fischer and Louisville Forward on Twitter (“Louisville is hiring!”). And sure enough, there are nearly 60,000 open jobs listed on Glassdoor for Louisville.
According to recent Census data, in 2016, only 5.1 percent of Kentucky residents were without health insurance, a 64 percent decrease from 2013. The Associated Press noted that the state led the nation in that decrease and that “nearly all of that decrease is because Kentucky was one of 31 states that expanded their Medicaid programs under the federal Affordable Care Act, allowing more than 461,000 people to get health coverage.”
CEOs of leading beer, wine and spirits companies, including Brown-Forman, are developing “new robust responsible marketing standards for digital channels that represent best-practice in this rapidly-changing field,” they announced last week.
New Albany seafood restaurant Hull or Highwater announced that it would open for business at 4 p.m. Thursday, Sept. 28. The restaurant, located at 324 E. Main St., has been in the works for months as the owners had to do a complete build-out.