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Business Travel Footnotes for June 2011

clip_image002 A Business Travel Update from Wilcox World Travel and Tours,   1 West Pack Sq, Suite 1700,   Asheville NC   28801   828-254-0746

Airlines

More Airlines are Making More on Those Ancillary Fees All those fees for services and amenities that used to be included in your airline ticket—baggage (although Southwest Airlines lets you check two bags free and your first checked bag is free with JetBlue Airways), seat assignments, meals, in-flight entertainment–are adding up. The number of airlines charging those fees increased from 23 to 47 last year, according to an annual study by Amadeus, a major global distribution system. Fee revenues were up 38 percent to $21.46 billion. And for a few airlines, ancillary fee revenue now generates nearly 30 percent of their revenue. Topping that list: vacation carrier Allegiant Air, 29 .2 percent; Spirit Airlines, 22.1 percent. (Source: Amadeus press release).

What Bothers Air Travelers Most? Fees and Discomfort

All those ancillary fees and lack of comfort are sore points with air travel consumers and it’s why some people are traveling less, according to a Consumer Reports survey. Eight of ten major airlines got low grades on seat comfort and several others got low marks for cabin crew service, cleanliness and in-flight entertainment. Two exceptions: Southwest Airlines and JetBlue Airways. Southwest got top marks for check-in and cabin crew; JetBlue scored tops on seating comfort. US Airways scored lowest overall and got the worst marks for cabin crew service. Flyers were also unhappy about service fees—40 percent of those who say they’re flying less blame fees. The fewer fees airlines charged, the happier passengers were with them—and, interestingly enough, both Southwest and JetBlue go easy on baggage fees. (Source: Consumer Reports press release). More People Will Take to the Skies This Summer The Air Transport Association of America is projecting that about 1.5 percent more people will fly this summer than did last year, to the tune of 2.24 million people in the air every day. The ATA predicts that 206.2 million passengers will fly between June and August. That is well below the pre-recessionary high of 217.6 million in the summer of 2007. (Source: ATA press release). Airfares Rise in Fourth Quarter 2010 Average domestic airfares rose to $337 in the fourth quarter of 2010, up 5.2 percent from the average fare of $320 in the fourth quarter of 2009, according to the U.S. Department of Transportation. Newark-Liberty, NJ, had the highest average fare, $461, while Atlantic City, NJ, had the lowest, $156. Despite that increase, airlines are correct in saying that, long-term, fares are staying low. The DOT calculates that in 1995 dollars, the average airfare in the fourth quarter of 2010 was $236, compared to $288 in 1995 and $300 in 2000. Adjusting for inflation in 1995 dollars, fares in 2010 averaged $235, up 6.7 percent from 2009 but down 21.6 percent from the inflation-adjusted high of $300 in 2000. (Source: DOT press release).

Tarmac Delays Keep Decreasing

There is some good news for flyers. March was the fourth month out of the last six that the nation’s airlines reported no tarmac delays of more than three hours, according to the Air Travel Consumer Report just released by the U.S. Department of Transportation (DOT).  A year ago, in March 2010, the carriers reported 25 tarmac delays longer than three hours.  Carriers also reported a decrease in the rate of canceled flights in March compared to a year earlier.  (Source: DOT press release).  

Hotels

Hotel Occupancies, Rates Expected to Go Up Increasing demand, lagging new construction and an economic recovery that should pick up for the second half of the year bodes well for hotels and means travelers will face slightly fuller hotels and modest price increases, according to consulting company PwC. According to Macroeconomic Advisors, the economic growth that slowed somewhat for the first part of year should gain traction in the second half of the year. That, combined with still-subdued hotel development, means U.S. hotel occupancy should average 59.8 percent this year; rates should increase 3.7 percent this year and 5.5 percent in 2012. (Source: PwC press release). Some Markets See Major Occupancy Increases Among the top 25 hotel markets in the U.S., five are seeing year-over-year hotel occupancy increases in the double digits. Houston is up 14.8 percent to 65.1 percent; Nashville is up 11.2 percent to 65.4 percent; Norfolk – Virginia Beach is up 10.8 percent to 59.2 percent; Orlando is up 10.8 percent to 76.4 percent and Minneapolis-St. Paul is up 10 percent to 64.1 percent, according to the hotel consulting company STR. (Source: STR press release). Easter, World Events Cause Temporary Lull for Business Travel The double-digit growth that business travel had seen earlier this year slowed in April, due primarily to the Easter holiday and world events. These included the earthquakes in Japan and New Zealand and simmering tensions in North Africa and the Middle East. But Pegasus Solutions, the world’s biggest processor of hotel transactions, calls this just a temporary slowdown. “The fundamentals driving corporate travel recovery – overall economies, corporate earnings, business trips and meetings/conference travel – are improving and increasing, while pent-up consumer demand and slow room supply growth portend a better summer travel season than last year’s,” said Mike Kistner, CEO of Pegasus. (Source: Pegasus press release). Car and Rail Amtrak to Add More Free Wi-Fi to Trains This Year Amtrak plans to expand its on-board free Wi-Fi this year. It plans to install AmtrakConnect on more trains in the Northeast Corridor and on more West Coast trains. It has also completed building a dedicated wireless network that improves connectivity and delivers a high-speed signal to trains traveling through New York City tunnels. Amtrak also plans on upgrading its system to 4G to increase available bandwidth. Free Wi-Fi is already available on Acela Express trains between Washington, D.C. and Boston and on Amtrak Cascades trains. (Source: Amtrak press release). clip_image003[6] Spotlight on:  Sleeping With Your Smartphone Smartphones and similar handhelds have become so integral to their users’ lives that more than 60 percent of mobile workers sleep with their smartphone, according to a the quarterly Mobile Workforce Report produced by iPass, which provides enterprise mobility services. Ninety-one percent of mobile workers check their smartphones even during off hours, 30 percent check them every six to 12 minutes, even when they’re technically off duty. All of this takes its toll.
  • The average mobile worker works 240 hours a year longer than the general population
  • Thirty-eight percent of mobile workers wake up at night to check their smartphone
  • Thirty-five percent check email in the morning before getting dressed or eating breakfast.
  • Twenty-nine percent report that their mobile technology use causes friction with their spouse or partner.
(Source: iPass press release).   Wilcox World Travel and Tours is committed to providing you with useful information on the latest developments in the travel industry. The above information has been compiled from a variety of sources and is updated monthly.

Business Travel Footnotes for March 2011

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A Business Travel Update from Wilcox World Travel and Tours,   1 West Pack Sq, Suite 1700,   Asheville NC   28801   828-254-0746

Airlines

Air Traffic Is Up—But So Are Oil Prices

Air traffic continues to increase, says the International Air Transport Association, with passenger traffic up 8.2 percent in January, better than December, when severe weather in Europe and North America slowed the recovery. January’s air travel volumes were 18 percent higher compared to the low point reached in early 2009 and some 6 percent above the pre-recession peak of early 2008. The problem with this otherwise rosy picture? Oil prices. The industry’s current forecasts were based on $84 per barrel oil and that price is now up to more than $100, said Giovanni Bisignani, IATA’s director general and CEO. A $1 increase in the price of oil means the industry has to recover $1.6 billion in additional costs. Bottom line? It’s another challenging year for airlines. (Source: IATA press release).

Airlines Gingerly Test the Waters With Fare Increase

Airlines keep testing the waters with fare increases. Early last month, several carriers initiated fuel surcharges that ranged from $4 to $10, according to airfare comparison website FareCompare.com. Except for some peak travel “miscellaneous” surcharges for popular travel periods, U.S. consumers haven’t seen domestic fuel surcharges since November 2008, according to Rick Seaney, FareCompare’s CEO. And airlines continue to try hiking fares. Late last month legacy carriers tried a $20 fare hike but ultimately cut that in half when low-cost carriers countered with a $10 fare hike of just $10. (Source: FareCompare.com).

American Fined for Charging Bumped Passengers a Fee to Use Travel Vouchers

Read the fine print if you volunteer to give up your seat on an overbooked flight. The Federal Aviation Administration has fined American Airlines $90,000 for failing to disclose that vouchers given to passengers who voluntarily gave up their seats on oversold flights could be redeemed only after paying a ticketing fee of as much as $30. Airlines have to look for volunteers before involuntarily bumping passengers, when the Department of Transportation requires the airlines to pay travelers cash in most cases. Ray LaHood, US Transportation secretary, said that if you give up your seat, you deserve full compensation—and not find out later that they have to pay $30 to use it. (Source: DOT press release).

Major Carriers Tout Service into Tokyo’s Haneda Airport

Carriers are adding flights to Tokyo’s Haneda Airport, located near Tokyo’s business center, even as they maintain service to the larger—and more distant—Narita. Delta Air Lines is now flying between Tokyo-Haneda and Detroit and Los Angeles. American Airlines has also begun flying nonstop between JFK and Haneda. The new service is a result of the Open Skies Agreement that the U.S. and Japan signed in October. U.S. carriers aren’t the only airlines flying into the more conveniently located Haneda; British Airways launched its new route to Haneda in Japan on Feb. 19. (Source: American, British Airways, Delta press releases).

Low Cost Carriers Add Workers; Network Carriers Cut Them

Low-cost carriers reported an increase in fulltime employees in December, the latest figures available, while network carriers reported fewer, according to the Department of Transportation. The result was that the number of fulltime employees for passenger airlines increased .2 percent. It’s a major turnaround for the industry, which saw employee numbers drop for the 28 months up until November 2010, when there was no change. (Source: DOT press release).

Hotels

Hotel Industry Appears to Start Recovery

If you’ve been enjoying low rates and easy availability at your favorite hotels, the market is beginning to tighten, but not by much. U.S. hotel occupancy and rates are starting to edge up. In year-over-year measurements, the industry’s occupancy was up 5.8 percent to 47.7 percent. Average daily rates ended the month with a 2.8-percent increase to $96.64. Demand is strong and room rates are edging up slightly, with the higher end of the market outpacing moderately priced hotels, according to Smith Travel Research. The hotel research and consulting company expects this trend to continue over the next several months, (Source: STR press release).

Luxury Hotels Keep Their Customers Happiest

Value does not mean cheap when it comes to hotels. Even though economy guests say that price is the most important element in their choices, economy hotels received the lowest value scores (79.2) in the 2010 Market Metrix Hospitality Index released last month. Upscale hotels received the top scores for delivering value (83.5). Hotel loyalty programs also played a bigger role for guests in choosing a hotel than in 2009. (Source: Market Metrix press release).

Car and Rail

Amtrak to Add More Free Wi-Fi to Trains This Year

Amtrak plans to expand its on-board free Wi-Fi this year. It plans to install AmtrakConnect on more trains in the Northeast Corridor and on more West Coast trains. It has also completed building a dedicated wireless network that improves connectivity and delivers a high-speed signal to trains traveling through New York City tunnels. Amtrak also plans on upgrading its system to 4G to increase available bandwidth. Free Wi-Fi is already available on Acela Express trains between Washington, D.C. and Boston and on Amtrak Cascades trains. (Source: Amtrak press release).

clip_image003[6] Spotlight on:  How Travel Helps Build Your Business

Hitting the road is good for your company’s bottom line, according to an American Express and Global Business Travel Association study. The study found that companies overlook how travel can give them a competitive edge. Among its findings:

· Every dollar strategically spent on business travel delivers $20 in additional gross profit.

· To get that return requires spending an average of 4 percent more on travel—or about $70 per employee.

· Industries that could benefit from more business travel spending: banking, finance, retail, and pharmaceuticals.

Source: American Express Global Business Travel press release.

 

Wilcox World Travel and Tours is committed to providing you with useful information on the latest developments in the travel industry. The above information has been compiled from a variety of sources and is updated monthly.

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