Travel Industry

Sen. Chuck Schumer (D-NY) wants to fight the airport security battle on foreign airports, so that it doesn’t have to be fought on  US airports or airspace. To that end, he has drummed up a 5-point plan which is well worth a read, if only for the shock value.

Sen. Chuck Schumer

Before we get to the details of the plan, a short statement from Sen. Schumer – “This incident [Flight 253] shows that more than eight years after the 9/11 attacks, there are still gaping holes left in our aviation security system, particularly overseas. My plan puts forward some common sense solutions to close these gaps in a quick and cost effective way.”

Schumer also pointed out that according to U.S. law, any flight that takes off from a foreign country bound for the U.S. must follow U.S. security procedures,  but the enforcement and monitoring by the TSA is very lax.

And here are the Senator’s proposed solutions:-

1. Call on U.S. Airlines to threaten to stop flying to foreign airports known to have lax security – To this end, Schumer has written to the heads of the major airlines asking them to immediately report any known security issues at foreign airports to U.S. security authorities, and threaten those airports that they will cease service to and from those airports if security isn’t improved.

2. Penalties for foreign airports that don’t comply with U.S. security rules - If the country is part of the visa waiver program, Schumer says it should be considered whether they should be kicked out of the program, if the non-compliance is serious enough. If the country is not part of the visa-waiver program, then it should be added to the list of countries whose incoming passengers and passport holders are subjected to enhanced screening.

3. Immediate review of all travel visas for anyone added to any terrorist database – Schumer said that this review and decision must be made within 14 days of a name being added to the database.

4. Worldwide information sharing of adjudications of visa applications – If any country does not want to share visa info with us, Schumer said no visas for their people coming to U.S. should be granted. Schumer’s statement specifically points out that the British had denied the Christmas Bomber a travel visa based on visa fraud but never informed U.S. authorities, because the denial was not based on a terrorism ground.

5. Foreign travel information sharing – Schumer said that any country with a travel agreement with the U.S. must share the foreign travel information of anyone seeking to travel to the U.S. He added that any country that declines this information should be denied visa-waiver status or should have its citizens prevented from receiving visas to travel into the US.

Read the full statement with more details about Sen. Schumer’s 5-point airport security plan here.

Telepresence

There’s a revolution in videoconferencing waiting in the wings, about to be unleashed much sooner than expected due to a high-stakes rivalry between Cisco Systems Inc. and Polycom Inc., both of whom are on the verge of unveiling business-quality videoconferencing products aimed at consumers.

Polycom has partnered with IBM, and is set to demonstrate a prototype of its Cloud-Based home telepresence solution at the Consumer Electronics Show in Las Vegas. This is HD videoconferencing, enabling video chats between multiple participants over high-speed Internet.

Cisco, which has made a $3.38 billion mega-bid to acquire videoconferencing company Tandberg, responded by announcing that it has its own plans to put out a consumer version of Telepresence – the company’s corporate videoconferencing product.

And the competition for the low-end market isn’t just restricted to Polycom and Cisco. Mouse manufacturer Logitech is buying LifeSize Communications, a privately held videoconferencing company, for $405 million.

An NJ based Startup named Vidyo says it has already done what Polycom and Cisco are planning to do – use the web to securely transmit teleconferencing data, thus scaling down the required equipment for easy use in homes, hotels and offices.

Vidyo

Their product uses an organization’s existing IP infrastructure — with no dedicated networks required, and offers a full range of user environments, starting from the home-office desktop.

Corporate travel managers are already onboard the teleconferencing wagon, as per a new survey conducted by Kotler Marketing Group, in conjunction with the Association of Corporate Travel Executives (ACTE).

According to the survey report, titled “2010 Corporate-Travel Spend Plans & Tactics,”  55% of respondents say they plan to rely on electronic alternatives in future. More than 40% see their organizations replacing more sales-related travel with conferencing over the next few years.

The only thing keeping videoconferencing from staging a complete takeover of business travel was the prohibitive cost of the setup, with most companies unable or unwilling to make investments worth in excess of $100,000 for products like Cisco’s Telepresence and HP’s Halo, without knowing whether it would be accepted by their business partners and employees.

Once affordable consumer oriented videoconferencing products suitable for office cubicles and homes become commonplace, any executive who wants to travel would first have to explain to superiors (and to the people on the other end of the meeting) why it can’t be done via a videoconference. Ironic thing is that this explanation – of why a face-to-face meeting is essential, would itself be likely delivered via a videoconference.

End game here is that the videoconferencing industry, which managed to squeeze out only $7 million from corporate users in 2008, is now set to rake in over $200 million by 2015, according to research firm Gartner. And this $200 million is coming straight out of the travel industry’s pockets.

Telepresence photo by Ed Kohler

Related posts:-
NBTA, USTA Start Pushback Against Teleconferencing
Two Biggest Hotel Chains Explore New Industry Move into Teleconferencing

New York’s tourism industry is apparently in much better shape than previously forecasted. Turns out that by the end of November, the number of visitors to the Big Apple had already exceeded the magic marker of 45 million by 400,000.

NYC - Tourists Heading for Liberty Island

City officials had earlier forecast that the number of annual visitors would fall from 47 million in 2008 to 45 million in 2009, a drop of 2 million.

But with the 45m marker already breached, and December data – usually one of the biggest months of the year, yet to be factored in, it looks like NYC’s tourism sector is putting the recession behind far more quickly than other sectors.

The surprising uptick in numbers is attributed to the weak dollar,  aggressive promotions launched by NYC & Company – the city’s official tourism & marketing organization, and sweet deals being offered by the city’s hotels.

Avg. domestic airfares to NYC for the holiday season have dropped 8%. The average room rate for hotels in Manhattan fell by $70 (22%) in 2009, according to PKF consulting. For 2008, the average room rate was $312, while it had dropped to as low as $216 in the last quarter of 2009.

The outlook for 2010 looks a lot more rosy, with the rising visitor count, the avg. room rate expected to go up to $218 in the first quarter, and the number of rooms sold set to increase by 4.5%.

One area where New York lags behind other cities is in getting New Yorkers to take an interest in their own attractions. In the latest semi-annual ‘New York Pass or Fail’ survey, 41% of New Yorkers surveyed think Top-of-the-Rock is on top of the Empire State Building (it’s on the GE Building). Ken Barrows, VP for New York Pass, which sponsored the survey, says that tourists seem to know more about the city than New Yorkers.

While that doesn’t exactly speak highly of New York as a staycation destination, it does show that New York as an international tourist destination is doing just fine. Out of the 47m visitors in 2008, 9.5m were international visitors. With the fall in the dollar and recession induced drop in domestic travel, those numbers have tilted in favor of international visitors for 2009, and the trend looks set to continue in 2010.

2009 was a comparatively good year for the travel & tourism sectors, in terms of getting Congress to listen to the industry’s problems and solutions. But inspite of a good start and plenty of bills being introduced, not a single piece of legislation specifically aimed at the travel industry actually got signed into law.

US Capitol

This means that the 2010 legislative agenda for the travel industry is already pretty much all mapped out. Here’s a listing of these bills, along with current status and expected resolution.

Travel Promotion Act of 2009 (S. 1023) - The travel industry’s biggest legislative accomplishment in 2009 was to turn the Corporation for Travel Promotion into reality. Almost. The Senate has passed the bill and so has the House. The Senate bill was returned back by the House with amendments, and is being ‘held at the desk’ since 9/10/2009.

The Senate needs to take it up again to consider the House amendments, a procedural vote which is usually a formality. But due to the Senate being otherwise occupied with the Healthcare debate, S. 1023 has had to wait it’s turn. It is expected that it will be quickly pushed through by itself in this year’s first session, or tacked on to a bigger bill and sent to the President for being signed into law.

The Freedom to Travel to Cuba Act (S. 428 & H.R. 874) – That this bill was actually introduced with 35 cosponsors and is being seriously considered by Congress is by itself an achievement. The bill, introduced by Sen. Byron Dorgan (D-ND), has been referred to the Committee on Foreign Relations.

It faces significant opposition from important Cuban-Americans in Congress, and it is difficult to see how this bill is going to pass without some serious high-level diplomacy and concessions by Cuba.

Passenger Bill of Rights (S. 213 & H.R. 624) – Tarmac time legislation has been grounded in Congress since 2007, but picked up a lot of momentum in 2009, mostly due to passengers being severely inconvinienced by carriers looking to cut back on services to save costs. The bill, introduced by Sen. Barbara Boxer (D-CA), has been referred to the Committee on Commerce, Science, and Transportation.

Ironically, the chances for getting this bill passed in 2010 were pretty good, until the DOT took the matter into their own hands last month and announced a three hour limit on tarmac wait times. With the key component of the bill no longer an urgent necessity, S. 213 has lost the momentum it had in 2009, and there looks to be no reason for Congress to further antagonize the powerful airline lobby.  

Protecting Resort Cities from Discrimination Act (S. 1530 & H.R. 3732) – This bill was introduced to rectify the situation created by the existence of an ‘unofficial’ blacklist of resort cities such as Las Vegas and Orlando, which federal agencies were told to stay away from for meetings, events and conventions. This bill, introduced by Sen. Harry Reid (D-NV), has been referred to the Committee on Homeland Security and and Governmental Affairs.

It will likely be passed very quickly this year, and will enable federal agencies who wish to hold their conferences and events in resort cities to do so without fear of a backlash. This in turn will provide cover for corporate America’s meeting planners to do the same.

To add to the above bills, there are large bills like the Climate Bill, which could possibly allow off-shore drilling to the detriment of the tourism economies of coastal states like Florida. There are also funding issues that Congress needs to address, including for passenger screening at airports, air traffic control modernization and high-speed rail.

Photo by dbking

2009 Roundup

The past 12 months have brought massive change for the travel industry, with a new President and a new legislative agenda, the recession and its massive impact on airline fees and hotel revenues, the H1N1 swine flu, and massive projects like CityCenter.

The shift in consumer preferences too was equally momentous, with the top consumer travel stories for 2009 showing a tilt in favor of budget travel.

Here’s a roundup of the top travel stories for 2009 which ended up as the most viewed articles published by various travel media outlets.

U.S. Travel Association - List of the most accessed articles in the U.S. Travel News Brief. The list is topped by an NYT story about hotels facing an uncertain future.

More stories in the list on the recession’s impact, cancelled meetings and the negative perceptions over business travel (AIG Effect). A couple of stories on President Obama’s election and his policies for the travel sector. One article about the Travel Promotion Act and one on the launch of DiscoverAmerica.com. See the full list here.

Travel Weekly – Travel Weekly’s top 10 2009 stories list is more of a roundup of the top issues, including airline fees, United’s merchant fee tiff, tarmac time, AIG Effect, H1N1 Swine flu, Alaska cruises, OTA hotel taxes, Travel Promotion Act, and the launch of the two biggest game-changers – Royal Caribbean International’s Oasis of the Seas and MGM Mirage’s CityCenter in Las Vegas. Read the details here.

New York Times – The NYT published its own list of top travel stories and slideshows for 2009. Their list is topped by Frugal Traveler Matt Gross’ guide for the Frugal Pleasures of Paris in Summer. 

Bing Travel – Bing’s list of top slideshows and articles in 2009 was topped by an article by Peter Greenberg on How to avoid staying in a Filthy Hotel Room.

Yahoo! Travel – Yahoo’s list of top 10 travel destinations for 2009, based on consumer interest and activity, is a big story all by itself, which underlines the shift in favor of budget travel. The 2008 list had New York in 2nd place, with Paris and Honolulu claiming the 5th & 6th spots. The 2009 list is topped by Vegas and Miami, with the more expensive New York dropping down to 6th, Honolulu to the 9th spot and Paris coming in last.

Worldhum – Worldhum’s list of 21 most read features of 2009 are topped by two posts for introverted travelers by Sophia Dembling. The list also includes articles about twitter tips from tweeting travelers, and one about the perils of travel writing.

Baltimore Sun – The Baltimore Sun’s list includes two accidents which completely enthralled the travel media for days - Capt. Sully Sullenberger’s Hudson Miracle (USAirways Flight 1549) and the tragic Air France Flight 447, which vanished in the Atlantic enroute to Paris from Rio.

Photo by Optical_illusion (thanks to Britt)

The Department of Homeland Security has served Travel Troubleshooter Christopher Elliott with a subpoena in order to find out who sent him a TSA Security Directive outlining new regulations set into effect in response to the Christmas terror incident onboard Northwest Flight 253.

Christopher Elliott

On Dec 27, 2009, Elliott (see TI100 profile) published the full text of the TSA Security Directive SD 1544-09-06 authorizing pat-downs, physical inspections. Two days on, Elliott now says that he was visited by Special Agent Robert Flaherty from the TSA Office of Inspection in Orlando.

The agent had with him a subpoena which says that Elliott is supposed to hand over – no later than Dec 31 – “All documents, emails, and/or faxsimile transmissions (sic) in your control possession or control concerning your receipt of TSA Security Directive 1544-09-06 dated December 25, 2009.”

Elliott didn’t comply immediately, and he hasn’t revealed what he’s going to do, other than discuss it with his lawyer. The subpoena mentions that the TSA needs the information as part of an ‘ongoing investigation.’

(Update 1: Dec 30, 2009 - Steven Frischling, a self employed photographer, also got a visit from two TSA Special Agents, for the same reason. Apparently the feds have now confiscated his computer.)

(Update 2: Dec 31, 2009 - Wired has more details – The directive was sent to Frischling anonymously from someone using a Gmail account, who claims to have been hired by the TSA as a screener in 2009. Frischling says the TSA agents who visited him were armed and threatened to get him fired from his job as a blogger for KLM Royal Dutch Airlines.

They wanted to get an image of Frischling’s harddrive, so they went and bought one, but couldn’t get it to work when they came back. Even worse, they damaged his laptop’s keyboard in the process. The TSA needs to give their agents some IT training too, in addition to media relations, and finding leakers…. )  

(Update 3: Dec 31, 2009 - The TSA has withdrawn its subpoenas to both Elliott and Frischling. They have also offered to buy Frischling a new computer. Elliott says that he was first granted an extension on the deadline, and that his intention was to challenge the subpoena in court.)

Earlier this month, the TSA accidently posted its airport screening procedures manual on the internet, to the Federal Business Opportunities web site. The 93-page manual revealed that only 20% of checked bags are to be hand searched for explosives and revealed in detail the limitations of x-ray screening machines.

ABC News has a quote from Clark Kent Ervin, the former inspector general at the Department of Homeland Security who says that ”The TSA should immediately convene an internal investigation and discipline those responsible.” The TSA says that a full review of this incident is underway.

Last year, the TSA instigated another leak investigation to find out who told CNN that less than 1 percent of the nation’s daily flights carry armed federal air marshals. According to CNN, TSA Spokesman Christopher White said a TSA investigator was looking into the “possible unauthorized release of sensitive and classified information to the news media by covered parties.”

Maybe if the TSA was just as dedicated in weeding out terrorists as it is in going after internal document leaks and the news media, they would have a better chance of keeping the skies safe.

In response to the Christmas terror attack on Northwest Flight 253 and the resultant calls for enhanced screening of passengers, the U.S. Travel Association wants policymakers to embrace screening techniques that meet a three-part test: strengthen security, balance travelers’ privacy needs and improve traveler facilitation.

Millimeter Wave images

The USTA specifically mentions “whole body imaging” (WBI) and increased use of canine security as examples of promising security measures in need of greater analysis.

Roger Dow, President and CEO of the U.S. Travel Association, said that “We must find new screening techniques that strengthen security, protect privacy and reduce wait times and other hassles for travelers.”

Dow added that the entire debate on whole body imaging had so far been focused on the privacy aspect, and the technology has not received the necessary analysis based on its effectiveness, including the security benefits, reduction in wait times and potential for reducing travelers’ hassles at security checkpoints.

And perhaps the most important part of U.S. Travel’s response is their call for Congress to “allocate undesignated stimulus dollars to the immediate deployment of screening techniques.”

The airline industry is already awaiting a federal response for their request for $6.4 billion from the TARP bailout fund, to be spent on aviation infrastructure and upgrades related to the shift from a land-based navigation system to a satellite based one. The Aerospace Industries Association estimates that the funding, if approved, could lead to the creation of 150,000 new jobs.

 U.S. Travel’s request for an immediate transfer of stimulus dollars towards deployment of screening techniques would be hard for Congress to ignore or decline under the current circumstances, with the public demanding some action from Congress and the White House.

And if and when Congress grants the fund transfer, it should set the precedent and clear the decks for the $6.4b request from the TARP fund towards NEXTGEN.

Travelport heads to London Stock Exchange

Looks like 2010 holds excitement at least for travel reservation company Travelport, Ltd. as it plans to launch a $2 billion (that’s billion with a b) IPO on the London Stock Exchange.  At least that’s the word from Bloomberg, as officials at Travelport have kept mum on the matter. But whoever is talking to the financial media knows that Barclays Capital, Credit Suisse Group AG, UBS AG, Deutsche Bank AG and Citigroup Inc. are on board to advise on the share sale, and that this should happen by early February.

In case Travelport doesn’t ring a bell, it’s the New York firm that owns 48 percent of Orbitz, along with Galileo and Worldspan. And in the complicated web that is big business, Travelport itself is actually owned by investment firms Blackstone Group LP, Technology Crossover Ventures, One Equity Partners, and Travelport’s managers.

But what really matters is what this move represents. ““The big picture is the travel market has stabilized and is looking like it’s ready to go up,”  Michael Millman, founder of Millman Research Associates, told Bloomberg. (He recommends buying Orbitz and Expedia Inc. shares.) “Travelport has basically said they want to do an IPO at the right time, meaning when they can get a good price.”

Considering other signs don’t point toward a strong travel year, it makes me wonder which crystal ball these executives have to gaze into — because I certainly want to look over their shoulders and see for myself. According to Bloomberg, here’s a peek at what they’re seeing:

• Priceline.com Inc. shares are up 24 percent since Nov. 9, when it reported quarterly sales and profit ahead of analysts’ estimates on bookings of discounted trips.

• Air ticket sales over at Expedia Inc., the biggest Internet traveling agency, jumped 27 percent in the third quarter from a year earlier. Their secret: reduced booking fares.

• On the other hand, Travelport reported third-quarter revenue of $570 million, down from $634 million a year ago. Insert shrug here.

Photography: alamez (Flickr.com)

The search for a scapegoat for the Christmas terror incident abroad Northwest Airlines Flight 253 has begun in earnest. On Dec 25, 2009, Nigerian Umar Farouk Abdulmutallab tried to detonate an explosive on the plane heading from Amsterdam to Detroit.

Northwest Plane with Delta markings similar to Flight 253

The White House has ordered two separate inquiries, with White House spokesman Robert Gibbs saying that the government will review the effectiveness of watch lists and also review airport security procedures for passengers before they board flights.

As a stopgap measure (until Dec 30), the TSA has stepped up airport security procedures. The new rules include a thorough pat-down at boarding, no movement for the last hour of the flight and no access to carryon luggage during this period.

These rules are unlikely to do anything other than make air travel even worse for holiday travelers, because as Homeland Security Secretary Janet Napolitano pointed out, Umar slipped through the dragnet not because the system failed, but inspite of the system working as it should.

The TSA’s current screening process, equipment and boarding procedures are incapable of stopping someone like Umar, and the only way it can be done is by implementing invasive airport security regulations (read full body scans) and controversial screening procedures such as racial profiling.

But this leaves out one very important aspect of the Flight 253 incident still undiscussed – The role of the United Kingdom in putting Umar on this path, and not keeping tabs on a disillusioned former student. Umar – the son of a wealthy Nigerian banker and a model student, had led a charmed life in a ₤4 million apartment in Mansfield Street in London, while he studied Engineering with Business Finance at University College London from Sept 2005 to June 2008.

In May 2009, the UK refused his application for a new visa after he apparently applied for a bogus course, in an effort to continue his stay in London. Rejected and disillusioned by the West he had looked upto all his life, his views turned extremist, so much so that his own father got worried and contacted the U.S. Embassy to inform them about his own son.

By December, Umar was on his way to Yemen to meetup (he claims) with Al-Queda and then to Nigeria, from where he boarded the flight to Amsterdam. The point here being that Umar – a disillusioned 23 year old Muslim youth whose visa was rejected by the UK, traveled from the UK to Yemen to Nigeria to Amsterdam and then to the US in the same month. It should automatically have set off some alarm bells.

The main culprit here is a systemic failure to stop people like Umar for fear of being labeled as racists, and the increased danger and safety measures facing holiday travelers today are  direct results of that political correctness.

A middle way out would be if the DHS and their counterparts in other nations were to speed up wider implementation of Trusted Traveler programs like Global Entry at airports around the world. Ironically, both Amsterdam and Detroit currently have Trusted Traveler programs in place.

Suspect people like Umar wouldn’t have been able to get into it, and had there been intensive security measures for those not in the program, he would easily have been stopped at either end.

The choice is simple – Implement trusted traveler programs at all major airports with flights to and from the U.S., and  passengers not in it would be subject to the maximum level of security and screening possible.

In a board meeting in Honolulu on Monday, just a few days before Christmas, the Hawaii Tourism Authority approved a strategic short-term plan with new targets for the next three years. They’re now targeting 6.7m visitors in 2010, and 6.9m visitors in 2011 and 2012, with $13 billion in annual, direct spending by visitors.

Barack Obama on vacation in Hawaii, visiting USS Arizona Memorial

And just in time to help them get the new plan off to a rollicking start, President Obama arrived for Christmas on his annual family vacation in Kailua, along with a torrent of media attention focusing on the First Family’s every move, with iconic images of Hawaii in the backdrop, and a vacation in Hawaii as the central theme of each story. 

According to the Anholt-GfK Roper Nation Brands Index, Obama has boosted the value of Brand America by over $2 trillion, from $9.7 trillion in 2008 to $11.8 trillion this year. A healthy part of this brand boost shows up as visitor interest, especially in destinations related to Obama, such as Hawaii, Chicago and Washington DC.

The connections between Obama and the Hawaii Tourism Authority have also started shifting from the intangible to the real and quantifiable, mostly due to the HTA being proactive in making use of Brand Obama.

Last month, when the media found that the President was headed for Hawaii again, visitor interest in the HVCB site started surging. According to HVCB spokeswoman Darlene Morikawa, the number of visitors to the site nearly doubled after they set up a micro site detailing Obama’s links to the islands.

Since kicking off the Presidential campaign, the Obamas have taken four vacations, three of them in Hawaii – in the full glare of the national and international media. In addition to the free media coverage, the HTA has also initiated campaigns with Obama as a central theme. 

'Obama's Hawaii' promoted in China

Earlier this year in July, President Obama selected Hawaii as the theme for the annual congressional picnic, with a Luau on the White House South Lawn. Chef Alan Wong prepared the island-inspired menu for more than 2,500 attendees, and members of Tihati Productions, including Cha Thompson, provided the entertainment.

The HVCB used the Luau as an opportunity to feed the media with a storyline promoting Hawaii as a destination, and the resultant media coverage in blogs, print, internet, and broadcast stories ended up producing over 700 million impressions. There’s no way to buy this kind of exposure with a paid-for campaign. 

On the business front, the HTA’s new plan 3-year plan specifically states that they’re seeking meeting, convention and incentive business because large groups help improve per person per day spending. This shift from leisure to the convention business no doubt takes into account the impact of the 2011 APEC conference, and a desire to get more such conferences.

From November 12-20, 2011, around 10,000 participants from 21 member nations will be in Hawaii for the Asia-Pacific Economic Cooperation (APEC) summit, bringing in a flood of global attention, boost in hotel occupancy and visitor spending. 

In addition to Honolulu, other cities bidding for the summit included New York, the Los Angeles-Orange County area, San Francisco and Miami. After the choice was narrowed down to between Hawaii and the two locations in California, the White House decided to go with Honolulu, citing security issues. The fact that President Obama’s Hawaii vacations have been going smoothly without any untoward incidents was a big influencer.

It’s a good bet that with more Obama vacations in store and with the White House actively steering business in their direction, Hawaii’s tourism industry will recover more easily and faster than other leisure hot-spots.

Barack Obama photo – public domain, work of the U.S. federal government (source)