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News ~
Snapshot
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ECONOMIC INSIGHTS ---
INCENTIVE
TRAVEL BUDGETS EXPECTED TO GO UP IN 2005
The
Business Travel Coalition, an advocacy group for corporate
travel managers surveyed planners and found that more
than half of them (52%) expect their budgets for incentive
travel programs will increase next year. The average
boost is anticipated to be 8.9% over their 2004 budgets.
The average amount spent on qualifiers and guests is
$5,806. Four nights/five days is the typical length
of programs and spring is the most popular season. Senior
management make the site selection 66 percent of the
time with planners only accounting for 17% of the decisions
on sites. - Meetings & Conventions
SPENDING
INCREASES TEMPERED BY CONTINUED COST CUTTING
The Business Travel Coalition surveyed 112 corporations
and found that 45 percent of the travel managers responding
expect an increase in airline spending in 2005. However,
given the 4% increase in spending projected this year
over last, 45% of respondents said dollars spent in
2005 should remain flat and 6% said there will be a
decrease in 2005. the survey underscores the continual
cost-consciousness among travel buyers. A whopping 94%
agreed that cutbacks in business travel are permanent
as higher use of low-cost carriers and non-refundable
tickets continues. - Business Travel News
LUXURY
HOTELIERS EXPECT TO CONTINUE STRONG PERFORMANCE
The economy and the hotel industry are picking
up momentum, but the luxury hotel segment already is
humming along. "People are selectively deciding
where to spend their dollars," said Jeff Senior,
v.p. of brand management for the InterContinental brand,
which is a part of InterContinental Hotels Group. "The
luxury segment in hotels is a beneficiary of that changed
mind set. People believe they deserve certain things,
and they might skimp in other areas to reward themselves."
The InterContinental brand is experiencing a successful
year, Senior said. Fairmont Hotels & Resorts also
is performing above and beyond what was expected. "We've
had a fairly significant increase in our revenue and
operating profits," said Tom Storey, executive
v.p. of development. "Our [revenue per available
room] was up about 23 percent in the second quarter,
which translated to overall [earnings before interest,
taxes, depreciation and amortization] increasing 45
or 46 percent." Jack Adler, president of Loews
Hotels, agreed. "It's much better to be in 2004
than to be in 2003," he said. "Our hotels
are performing quite well through the end of August.
The hotels' RevPAR has grown more than 10 percent year
to date. Corporate business is coming back. Our midweek
business has increased greatly. Group business is beginning
to pick up, as well. At the same time, our leisure business
is still very strong." -- Hotel Motel Management
WEALTHY
CONSUMER CONFIDENCE DOWN, BUT TRAVEL MAY BE UP
Representing almost half of all consumer spending
and a third of the total U.S. economy, the wealthiest
11 million households show declining optimism in their
12 month outlook, in new survey by American Affluence
Research Center. While the majority of affluent Americans
remain optimistic about current and future business
conditions, an increasing percentage is showing concern
about business conditions, the stock market, and their
own personal household income 12 months from now. Against
this backdrop, the wealthy are displaying mixed signals
about their future spending plans. With the exception
of new automobiles, their plans for major purchases
such as homes, boats, home remodeling, and cruises remain
relatively strong. Planned spending for international
vacation travel is at a positive level for the first
time since the surveys began, while planned spending
for major appliances is at its lowest level ever. This
new survey also provides information on plans for travel
outside of the continental U.S. during the fourth quarter
(including favored destinations, cruises, hotel brand
preferences, and the length and cost of the vacation).
Additional highlights from the national survey of 412
men and women in the wealthiest 10% of American households
can be found on the AARC web site, www.affluenceresearch.org.
MEETING
PLANNERS EXPECT TO BOOK MORE OFF SITE MEETINGS
Some 19 percent of North American meeting
planners surveyed by the Orlando-based research firm
Yesawich, Pepperdine, Brown & Russell expect to
book more off-site meetings in the coming year. The
study signals "the reversal of a stagnant meetings
market trend that has persisted since the events of
Sept. 11," Peter Yesawich, the research firm's
chairman and chief executive said in a statement accompanying
the new study. The meetings business is not only picking
up, it is increasingly being built around longer stages
of planning, according to Meetings & Conventions
magazine's 2004 Meetings Market Report, issued this
month. Its research indicates that the time to plan
meetings is up 5 percent, with the complete process
averaging two years per event.
HIGHLIGHTS
OF THE YESAWICH STUDY
One in five (19 percent) meeting planners
expects to book more off-site meetings in the year ahead
(16 percent of association meeting planners and 23 percent
of corporate meeting planners). The top concern expressed
by both corporate and association meeting planners was
"making the meeting agenda relevant." Planners
cited the cost of lodging accommodations as the second
most important concern. Although 23 percent of corporate
meeting planners expect to book more off-site meetings
in the year ahead, they also indicated they were likely
to shorten the length of those meetings and replace
larger meetings with one or more smaller meetings. All
planners rated "site inspections" as the most
important source of new information on both destinations
and lodging accommodations, and planners expressed a
clear preference to work directly with the host hotel
and/or resort sales personnel when negotiating and booking
meetings. Orlando was cited as the No. 1 destination
for future corporate meetings (by 53 percent of corporate
planners), while San Diego was rated the preferred destination
by association planners (48 percent). The combined ratings
for both corporate and association planners revealed
that San Diego reigns as the most desirable destination
for a future meeting of any type (46 percent of all
planners).
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HOTEL HIGHLIGHTS ---
HOTELS
TO GENERATE $14.6 BILLION ON LINE THIS YEAR
The hotel industry had a strong year online
in 2004, generating $14.6 billion in revenue and garnering
a channel share of 17 percent. Much of the growth that
has taken place since 2001 has come from merchant model
hotels. Jupiter Research anticipates that market recovery
will see the merchant model drop over the next couple
of years as many major hotel chains establish best-rate
guarantees across their distribution channels, including
their Web sites. Online hotel revenues will see the
strongest growth in the managed business sector due
to the momentum of online business travel booking tools.
Managed business travel will account for 11 percent
of hotel channel share in 2004. Jupiter Research projects
this figure will increase to 27 percent in 2009, surpassing
online leisure and unmanaged business hotel channel
share of 25 percent. -- Hotel Interactive
RADISSON
ENHANCES ONLINE GUEST CHECK IN SERVICES
Radisson Hotels & Resorts has enhanced
its "Express Yourself" online guest check-in
system by letting customers choose an automated wake-up
call time and request the hotel's airport shuttle transportation
service. The online check-in service is available at
Radisson hotels and resorts in the Americas. Radisson
also said it has launched an online meeting services
suite available at its Web site, www.radisson.com. The
Carlson Hotels Worldwide brand said the Web-based tool,
powered by PlanSoft, lets event and meeting planners
seamlessly search Radisson's inventory of group facilities
and services, and submit electronic RFPs for free to
Radisson hotels fitting their specific event criteria.
The product suite includes links to local convention
and visitors bureaus, convention centers and various
meeting-related suppliers. Other Carlson Hotels Worldwide
brands will offer the service on their Web sites next
year.
---
AIR TRAVEL TRENDS ---
IATA TO
STRENGTHEN AIRLINE INDUSTRY WITH TECHNOLOGY
Giovanni Bisignani, Director General and CEO
of the International Air Transport Association said:
"Using technology effectively, we will strengthen
the industry with improved passenger service and reduced
costs." The four core projects at the heart of
the initiative are lead by a commitment to 100% electronic
ticketing by the end of 2007. Three related projects
further simplify the travel process: common use self
service kiosks (CUSS) for check-in, bar-coded boarding
passes and radio frequency identification for interline
baggage management. All were agreed by a resolution
at the IATA AGM. In the wake of cumulative industry
losses topping US$30 billion since 2001, cost reduction
is a priority. In 2003, airlines reduced non-fuel unit
costs by 2.5% and a further 3.0% reduction is expected
for 2004. E-ticketing will save the industry US$3 billion
annually in processing costs. RFID for interline baggage
management promises improvements in handling accuracy
in the range of 15%. Each check-in using a CUSS kiosk
will save US$0.50 in processing costs.
AIR TRAFFIC
RISING, SOUTHWEST TOPS ON DOMESTIC PASSENGERS
U.S. airlines carried 7.5 percent more domestic
passengers and flew 3.9 percent more domestic flights
during the first eight months of this year than they
did during the same period last year, the U.S. Department
of Transportation's Bureau of Transportation Statistics
(BTS) recently reported. Southwest Airlines carried
54.8 million domestic passengers during the first eight
months of 2004, the most of any airline. Delta, at 53.9
million passengers, and American Airlines, at 49.8 million
passengers, rounded out the three busiest carriers.
Domestic airlines carried 424.8 million passengers during
the first eight months of 2004, up from the 395.3 million
in 2003. These passengers were carried on 6.6 million
domestic flights, up 3.9 percent from the 6.4 million
flights operated in 2003. - Meetings Media
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INTERNATIONAL INFO ---
CHINA IS
FAST BECOMING THE MAGNET FOR TRAVEL FIRMS
As one of the fastest growing and most intriguing
tourism destinations in the world, China is becoming
a magnet for travel-related businesses. Nearly 2,900
such overseas and domestic enterprises gathered in Shanghai
to attend the 2004 China International Travel Mart (CITM),
a jump of 16 per cent from 2002. The CITM shifts annually
between Shanghai and Kunming. The mart has been held
five times, three times in Shanghai and twice in Kunming,
capital of Yunnan Province. This year there are 1,196
domestic booths and 652 international booths, up 65
per cent and 35 per cent over last session, said Shen
Huirong, director of the Tourism Promotion and International
Liaison Department of the China National Tourism Administration
(CNTA).
PARIS
HOTELS RECOVERY CONTINUES
While not quite as good as in September, October
performances confirmed however that the Parisian hotel
market is recovering. The totality of the upscale segments
posted an increase in occupancy rates varying from +5%
for Large Capacity and First Class properties to over
+7% for the rest of the 4 Star supply in the city. The
average increase in occupancy for the upscale category
was +6%. The mid-scale hotels, on the other hand, observed
a slightly lesser growth with only +2%, and even a drawback
for the Superior 3 Star hotel -down by 2%. In October,
the overall RevPar (all categories) was on the rise.
The upscale hotel market showed a 5% progression and
the mid-scale segment over 8%. Even though the Boutique
hotels won the race in the Upscale segment, it is the
Standard 3 Star hotels that are maximizing RevPar growth
this month (+12%). - Internet Travel News
NEW ZEALAND
SEES BIG JUMP IN TOURIST ARRIVALS
A 9 per cent jump in tourist arrivals last
month has convinced the Government that this year will
be a record year for the country's biggest export-earning
sector. Some 181,000 people visited the country last
month, Statistics New Zealand says, with more tourists
arriving particularly from Australia and Britain. Although
they generally stayed for a shorter period - 19 days,
down from 22 days the previous October - increased visitor
numbers is good news for tourist operators selling everything
from hotel accommodation and sightseeing trips to restaurant
meals and mementos.
TRAVEL
CLICK SEES WORLDWIDE ELECTRONIC BOOKING UP
Travel Click's eMonitor results for the third
quarter of 2004 show that worldwide electronic hotel
bookings were up 4.7% for the Global Distribution Systems
(GDS) and Internet combined. Hotel revenue from the
electronic channels also increased 12.1% as the Average
Daily Rate (ADR) rose 6% over the same period last year.
Hotel room nights booked electronically through the
Global Distribution Systems (GDS) and key Internet sites
were also up 5.8% versus the same period last year.
Electronic room nights year-to-date through the third
quarter increased by 8.8% from the same time period
last year, revenue was up 15.4%, and ADR increased by
6%. Average length of stay for the 2004 year-to-date
period was 2.12 nights, slightly higher than last year's
2.10 nights.
---
BIZ/LEISURE TRAVEL ---
AVERAGE
CORPORATE AIR FARES AT 5-YEAR LOW
Companies are seeing the lowest average air
fares paid since 1999, primarily due to low-cost carrier
pressure on popular routes, as revealed by new data
from eCLIPSE Advisors, a subsidiary of American Express
Business Travel. "Competition between legacy and
low cost carriers is increasing, and as a result, business
travelers are gaining access to lower airfares across
a growing list of markets. The continuing downward pressure
on business airfares has created an environment where
average fares purchased in the third quarter of 2004
were at their lowest levels since Business Travel Monitor
[benchmarking service] was launched in 1999," said
Michael Boult, COO of eCLIPSE Advisors. The average
fare in the third quarter of this year was $217 one-way,
down 10 percent from 2003, BTM data shows. The average
fare paid continues to remain much lower than typical
business airfares-a measure of companies' success in
buffering themselves from airlines' published prices
via negotiated discounts and greater use of leisure-type
airfares, eClipse officials noted. For all of last year,
the difference between the average fare paid was 47
percent less than the typical business fare, compared
to a difference of 49 percent in 2004. - Meetings
Media
BIZ TRAVELERS
TURN BACK TO AGENTS WHEN ONLINE FAILS
In today's corporate climate, where self service
means saving money, business travelers are increasingly
asked to make their own air, lodging and rental car
arrangements through online programs. But those who
have been frustrated when doubts arise about whether
the bookings are being done correctly or when the process
takes too long may want to know they're not alone in
reaching for the phone, going back to the old-and presumably
more expensive-way of doing business. That's one inference
from a recent survey done by Seattle-based Travelport,
a company which provides travel management systems,
technology and customer support and is part of Cendant.
The poll, which covered 631 U.S. business travelers,
found that about a third of those who had the option
of booking on line instead used traditional methods,
such as calling a travel agent. -- eHotelier.com
BUSINESS
TRAVELERS PREFER AIRLINE AND LODGING WEB SITES
Although business travelers at companies with
unmanaged or lightly managed travel policies pay more
frequent visits to online travel agencies, they prefer
the online experience provided by airline and lodging
Web sites, according to a new study from Keynote Systems
based on research with 1,500 business travelers as they
interacted with dozens of leading travel Web sites.
Said Dr. Bonny Brown, director of research and public
services for Keynote: "This differs from all other
Keynote studies in the travel industry where the online
agencies consistently outperformed supplier sites. Business
travelers have a distinctly different view on researching
and booking travel than do other travelers, and this
presents a significant opportunity for travel suppliers
such as airlines and hotels." According to the
study, business travelers often use online travel agencies
as an information resource and then proceed directly
to specific air, hotel or rental car Web sites.
-- eHotelier.com
PRICE
AND SELECTION TOP PURCHASE DRIVERS FOR BIZ TRAVELER
In general, the price of a travel service
and the selection available on a site are the top drivers
for business travelers in determining where to purchase
online, with air and lodging supplier sites the clear
leaders in pricing satisfaction and the online agencies
the clear leaders in selection. JetBlue and Southwest
Airlines were ranked as the sites offering the best
prices; whereas Expedia was consistently ranked as providing
the best selection. More than 85 percent of business
travelers participating in the study mentioned price
as a leading consideration, and 48 percent indicated
that loyalty programs were a "very important"
or "extremely important" consideration. For
lodging, price and proximity of the hotel to business/meeting
location were equally matched as leading considerations,
cited by nearly 80 percent of business travelers. High-speed
Internet access was mentioned as a "very important"
or "extremely important" consideration by
53 percent of business travelers. A complete list of
the leading factors driving purchase decisions is included
in the full Keynote report. -- eHotelier.com
---
CRUISE NEWS---
CRUISE
LINES CHANGE NATIONAL CRUISE MONTH TO OCTOBER
The Cruise Lines International Association
is moving its annual National Cruise Vacation Month
promotion from February to October. The new promotional
month would fall before, instead of during, the cruise
industry's Wave season, which historically is the industry's
heaviest booking period. The trade organization also
will introduce several cruise promotions, including
a program called the "World's Largest Cruise Night,"
during National Cruise Vacation Month, which will coincide
with its recently announced plans for a trade show.
-- Travel Weekly
---
ONLINE ISSUES ---
The first-ever,
all-encompassing, online source for information, research,
contacts and best practices, eConnect is an HSMAI Foundation
program hosted by the University of Houston's Conrad
N. Hilton College. Click
Here to go to eConnect
and access the exclusive HSMAI Member Only areas.
ONLINE
TRAVEL REPRESENTS 23% OF ALL TRAVEL PURCHASES
In 2004, $54 billion worth of travel will
be sold online, accounting for 23 percent of all travel
bought throughout the year, according to a new Jupiter
Research report. This figure represents a 20 percent
increase, or about $9 billion, over 2003 online sales.
Online travel revenue is higher than Jupiter Research
forecast in 2003 because the travel industry has made
steps towards recovery. (Overall sales had increased
by only three percent between 2002 and 2003.) Strong
growth will continue over the next five years, with
online travel sales reaching $91 billion in 2009. --
Hotel Interactive
AMADEUS
SEES INCREASE IN HOTEL BOOKINGS
Amadeus announced its hotel bookings for the
year to September 2004 grew 13% compared with the same
period last year. The company attributes this to the
impressive adoption of its Dynamic Access level of connection
which gives travel agencies real-time availability and
prices at every stage in the booking process. Currently,
82 hotel companies have signed up to Dynamic Access,
representing in excess of 100 hotel brands and nearly
23,000 properties. These properties represent 70% of
Amadeus' total hotel bookings. -- Internet Travel
News
DEBATE
RAGES OVER TRAVEL SEARCH ENGINES
Debate about the next generation of travel
search engines and their competition with online agencies
permeated the recent PhoCusWright Executive Conference.
Travel-search proponents said their companies' offerings
will take hold because they are tapping into the established
shopping techniques of millions of online consumers.
Online agencies countered that they -- and not the search
engines -- provide better value to consumers and suppliers.
Yahoo Chief Operating Officer Daniel Rosensweig said
that Yahoo's upcoming introduction of the FareChase
travel search engine and similar products by competitors
will not displace online agencies -- such as Yahoo's
partner, Travelocity -- because consumers shop for travel
in multiple ways and travel will continue to be sold
in numerous ways. There was much talk about whether
the search engines can be comprehensive if online agencies
like Travelocity, Expedia and Orbitz shun the meta-searchers.
For example, Orbitz works with SideStep and Kayak but
has boycotted others; Travelocity dropped out of FareChase
and Kayak but uses Mobissimo; and Expedia says it will
not play ball with any "screen-scraper" for
now. -- Travel Weekly
CHALLENGE
FOR ONLINE AGENCIES IS CUSTOMER LOYALTY
Outgoing Orbitz CEO Jeffrey Katz said the
challenge for online agencies is to find value for customers
and suppliers, but he noted there is "shockingly
little" consumer loyalty on the Web. Priceline
CEO Jeffery Boyd noted that Yahoo's purchase of FareChase
and AOL's minority investment in Kayak were among the
key events in online travel this year. Kayak CEO Stephen
Hafner asked Boyd why Priceline, which has a retail
operation along with its opaque business, and other
online sellers should be afraid of the pricing transparency
that the travel search engines bring. Boyd responded
that he would not rule out partnering with a travel-search
engine but would rather invest in developing consumer
loyalty. Boyd said his concerns about the meta-searchers
include brand dilution and the cost of participation,
including robotic searches that raise Web sites' GDS
costs. -- Travel Weekly
EXPEDIA,
HOTELS.COM LAUNCH NEXT PHASE OF DIRECT CONNECT
Expedia and Hotels.com have launched the next
phase of implementation for their direct connect technology
to enable the automatic delivery of bookings made on
the two travel sites. The second phase will enable hoteliers
to manage the room inventory they offer on Expedia.com
directly from the hotel's central reservation systems
(CRS), eliminating the need to manually update the Expedia
extranet. The second phase roll-out of direct connect
will provide hotels with a streamlined system for managing
rates and inventory, as well as the opportunity to optimize
bookings in a more cost-effective environment. The technology
was designed from the ground up to serve the unique
needs of the hotel industry. - Internet Travel News
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