Travel Industry Blog

UA's idea isn't flying with the industry

United Airlines has found a sure-fire way to stir the pot this summer. Its announcement last week that the airline will no longer allow some travel agencies to use its merchant account to book United products after July 20 has heaped coals on officials’ heads.

Basically, a handful of agencies (no one has revealed just who and how many) will have to use their own merchant accounts to accept payments and then pay United in cash. The penalty for forgetting is $75 per ticket. Consultants like Robert Joselyn immediately said this smelled like a pilot program to shift the credit card fees and fraud liability to all travel agencies down the road.

And that’s just the opening volley. Among the anonymous comments posted at Travel Weekly within the first 48 hours of the bombshell:

• “With UA continually on the brink of another bankruptcy, what agency wants to pay with cash and take the risk of holding the bag??”

• “United seems bent on angering and alienating everyone they do business with - whether it be the passenger (I can’t tell you how many clients will say never again will they fly on UA) or their ‘travel partners’ who they seem oblivious to damaging their relationship with in every way imaginable.”

• Has United lost their minds??? We are free employees, selling United’s tickets for nothing and hoping maybe we can receive a service fee. The people at United hate the airline and Glen Tilton because they are Harvard MBAs who are in it for themselves and no one else … It’s just a method to drive down labor costs. Sorry, you airline MBAs, it is not going to work for you. You will see!!!”

• “It sounds more like they are having cash flow problems and want to pass the buck. We already push more and more people onto the discount airlines. and if this follow through the gds’s will have a problem and the discount carriers will benefit.”

Except at United Airlines

The ironic twist, of course, is that United isn’t the first to suggest credit card fees are a problem — Continental’s CFO mentioned in January 2007 that it was looking at ways to get around credit cards, including direct bank transfers. British Airways spent three years earlier this decade locked in a legal battle trying to shift American Express merchant fees from its corporate business. It finally pitched its tent and went home in 2005.

But talking and doing are different things, so it’s UA that the American Society of Travel Agents’ legal team now says it intends to take up with the U.S. Justice Department. According to Paul Ruden, the senior vice president of legal and industry affairs at ASTA, this could mean carriers are relaying their intentions without words to get around the antitrust law. He has some damning facts on his side.

As a travel agent and a business journalist, I’m torn between the two sides. Obviously, cost-cutting is a key ingredient in business survival, and I do it myself. Business is not for the faint of heart: it’s a rough and tumble game.

The problems stem when you play out the consequences. Agencies, as many experts point out, will have to charge more service fees beyond the current $10 mark-up at online databases to cover their costs. Meanwhile, consumers are becoming restless and feisty about fees instead of numb and accepting. When airlines unbundled services and began charging $15 here, $25 there, the result was mass irritation. Tacking on another $10 for using an credit card falls in that same category. Not to mention many Americans are beginning to see holes in their income stream and simply can’t afford to pay another sawbuck.

So, naturally, they’ll trot to the airlines’ URL sites directly to book without fees — bad for travel agents, but remember: This is business. Put on your big girl panties or don’t play. However, this also means the passenger load is now the airlines’ full responsibility — their employees are on the hot seat to handle processing changes, cancellations/credits and notifying folks of new itineraries.

It doesn’t take any in-depth musing to determine labor costs could outstrip the estimated $171 million United now pays in credit card fees. From that standpoint alone, it would be nice to save United Airlines from itself.

Which lends some weight to Ruden’s theory that the real end game is to save GDS fees. “Maybe this is partly or all about getting out from under their full-content agreements,” he told ATW. And there are some rules to this game that shouldn’t be broken — like honoring your contracts.

Photography: cliff1066, szlea

Disney World is about to get some serious competition as Florida’s premier theme park, as Florida may soon be home to the second Legoland theme park in the US.

Legoland Model Builder

Merlin Entertainment Group Inc., the company that designs Legoland, is said to be doing research on building an entire new theme park in central Florida.

The latest round of chatter was triggered by Screamscape, which reported that one of it’s readers was asked to participate in a survey where the questions “were all about building Legoland Florida, which would be based on the basic design and layout of the Legoland California park, and feature about 50 different rides and attractions.”

The location mentioned for the park was in Winter Haven near Cypress Gardens, about an hour’s drive south of Disney. Some mainstream news organizations followed up on the chatter, and a local NBC affiliate WESH TV got confirmation from a Legoland Spokesperson that Merlin Entertainment was indeed looking into a theme park in central Florida.

And now a few other locations are also being bandied about now, including near Old Town in Kissimee and another spot on the grounds of a failed amusement park, Splendid China, which is located just a few minutes off Disney.

Legoland California

Legoland has three parks in Europe and only one theme park in the US, in Carlsbad, California, just off San Diego, where it charges $63 for an adult ticket and $53 for children.

They’re trying to change the focus of Legoland California from a theme park for day-trips into an attraction where visitors can stay overnight. And to this end, they recently got permission from Carlsbad’s planning commission to build a 250 room Lego-themed hotel within the grounds.

Stands to reason that if they go ahead with the plans for Legoland Florida, it will be the full package - with a Legoland theme park and a hotel and other resort facilities.

That pits them in direct competition with Disney World, and has the potential to trigger some big changes in Orlando’s theme park landscape, including possibly a major price war which would likely spread out to include the companies’ parks in California.

The Ypartnership/Yankelovich 2009 National Travel Monitor shows the West winning the battle for domestic travel dollars, with the South tagging along just behind.

Visit California

When asked about their interest in visiting specific regions across the country during the next two years, more than seven in ten (72%) leisure travelers said they’d like to visit the western region of the United States, followed by the South with 62 percent (62%), the Northeast with 33 percent (33%) and the Midwest with 21 percent (21%).

In the battle of the states, Florida wins the race as the most sought tourist destination with 34% mentioning the Sunshine State as the destination they would like to visit most in the next 2 years.

Florida was followed by California with 30%, and then Arizona and Hawaii, both tied at 16% each. Listed below are the top 10 states.

Florida - 34%
California - 30%
Arizona - 16%
Hawaii - 16%
New York - 15%
Washington (state) - 13%
Alaska - 12%
Colorado - 12%
Texas - 12%
Nevada - 11%

And when it comes to specific destinations, the National Parks top the charts, with 66% of leisure travelers opting for the National Parks as their dream destination, followed by the Hawaiian Neighbour Islands (Maui, Kauai, etc) at 63%, Honolulu at 59%, Florida Keys at 45% and Orlando with 40%.

The bottom 5 of the top 10 destinations were rounded up by San Diego (39%), San Francisco (38%), Las Vegas (36%), New York City (36%) and Lake Tahoe (34%).

In a press statement, Peter C. Yesawich, chairman and CEO of Ypartnership, said that “Given that a lower proportion of U.S. travelers are planning to take an international trip during the next two years, the results of this year’s MONITOR underscore the high degree of interest in travel within the United States. And the data suggest there is a wonderful opportunity for preferred destinations to capitalize on this trend.”

For more information, visit www.ypartnership.com/.

mobile computing heaven

The race is on.

The Westin St. Francis in San Francisco’s Union Square is among the first hoteliers to sign up with LodgeNet Interactive Corporation to implement its Mobile Internet Devices and integrate them into their own hospitality system.

In English, this means Westin guests can order in-room dining, book a spa appointment, make golf reservations, sign up for their reward program points and even change the in-room temperature and electricity controls through their iPhones and Blackberries. Basically, guests’ smart phones replace the concierge function, which will no doubt trigger a rebuttal from the National Concierge Association. But let’s face it: the name of the game has always been “be relevant or be run over.”

The project is in the pilot stages this summer; LodgeNet says it should roll out more test markets between now and the end of 2009. Anyone who wants to see this technology in action can stop by the company’s booth at HITEC at the Anaheim Convention Center June 23 - 25.

It’s a smart move for anyone who read the American Hotel and Lodging Association’s 2008 study on customer satisfaction. A whopping 82 percent of guests say they care most about their wi-fi services, even over in-room entertainment systems and airline check-in kiosks.

Which could explain why Omni Hotels — the first luxury hotel brand to give guests free wireless access in their rooms — is focusing more on the basics. It signed with BelAir Networks to upgrade its network design to accommodate mobile computing. “With nearly 50 percent of our guests using wi-fi and their bandwidth demands continuing to accelerate, we sought a high-performance network partner” says Richard Tudgay, Omni’s IT veep.

Photography: Westin St. Francis

With the launch of City Tours (http://citytours.googlelabs.com/), Google adds to the list of trip-planning solutions which use some combination of local data, maps, user generated content and social networking tools.

Google City Tours

City Tours is still under Google Labs , and as such, it’s still pretty much in it’s infancy, but it’s already being touted as something with immense possibilities. City Tours points out the attractions and plans out multi-day trips. All you do is name the city and you’re good to go. And if you specify the location of your hotel and the length of your trip, City Tours will map out a complete itinerary for you.

When you type in the city name, you get back a planned 3-day trip, with around 10-12 attractions mapped out per day. The site suggests time to be spent at each location, and walking distances between the mapped attractions. You can modify the number of days, and add new attractions.

It’s pretty basic and simple, and adding new attractions seems to work, so long as you don’t try to add some name or attraction which could have other meanings. But the interesting part is in the possibilities that City Tours offers. It uses Google Maps to figure out the relative positions of the attractions in each itinerary, and line them up so as to create a suggested tour with the minimum overall amount of walking necessary.

So you could, for example, work out a complete trip plan, starting from your hotel, throw in restaurants, attractions, shows, and a complete trip, rather than just the attractions. You could make it work for a multi-day roadtrip across state lines, involving multiple destinations.

And instead of just walking between destinations, if you could plug-in Google Transit to cover the distances between the attractions, that would make it even more closer to reality. You’d get a trip plan with suggested attractions for each day of your stay, and the closest public transport options for traveling from one point to the next. That’s pretty much all you’re looking for in a trip planner.

And there are plenty of sites, like GoPlanit, which already offer something close to this. The difference with Google is the vast scale of it and the user participation - pretty soon, people will have added so many attractions to each place that the system will be bigger and better than what any other trip planning site can offer.

FlyClear, a New York based company which charged annual fees for clear card services to help it’s members get through TSA Airport Security checkpoints faster, ceased operations earlier this week.

Clear Card from FlyClear

Apparently, Clear’s parent company - Verified Identity Pass Inc., was “unable to negotiate an agreement with its senior creditor to continue operations.” The Clear Lanes being operated at 20 airports nationwide, and being used by the over 260,000 people who had signed on with FlyClear, suddenly closed on Monday without any prior intimation.

The service had an annual price tag of $199, and the company says it’s not in a position to offer any refund. And it looks like the company is closed for good, with no plans for any comeback. They haven’t filed for bankruptcy protection, and they’ve wiped all the data from the airport verification kiosks.

FlyClear was founded in 2003 by entrepreuner Steven Brill, and the program took off at Orlando International Airport in 2005. The Clear Lanes at Orlando alone have seen over 1 million passengers pass through. For frequent and elite travelers stressed out by the post-9/11 security measures and extra-long lines at Airport Security checkpoints, Clear provided a much-needed service - A Clear Card with a biometric chip issued after a TSA vetting which whisked you past the bottlenecked checkpoints.

Inspite of the obvious need for such a service - and this is probably one of the main reason for Clear’s demise - fact is that neither the TSA nor the airlines ever fully embraced it, and they weren’t really able to expand the service and make it a commonly available facility at all airports.

And last year in May, a laptop containing information about 33k Clear users and applicants went missing from the Clear office at San Francisco International Airport. The TSA went ballistic and revoked Clear’s Registered Traveler status. 10 days later, the laptop mysteriously turns up in the same spot where it went missing, and prettty soon, things were back to normal.

So what happens to all the data now - The fingerprints, iris images, photos, names, addresses, credit card numbers and other personal information? Clear is promising that all personal data on record will be deleted and members notified in a final email missive from the company.

But they haven’t deleted it all yet, and a statement on their website states that the information provided can only be used by companies for the TSA’s Registered Traveler program. So they could keep it on file until they’re able to ’sell’ the information in accordance with these rules.

And now, with all their assets will be up for grabs and likely to be put on sale, it only makes it harder for the company to make good on it’s promise to keep the data secure.

Either way, Clear is gone, and there’s no fast lane for a quarter of a million people who forked out $199 a year.

You could be in your desired hotel room for less by using a few hacks.

Although hotels use “opaque sites” like Priceline and Hotwire to unload unsold inventory without diluting their brand names, with a little sleuthing customers can often figure out what hotel they’re booking. But as I recently found out, sleuths like me should beware, because if you play the game long enough, once in awhile you’re going to end up in the “wrong” property.

For my blog Frugalista, on Chicago Tribune partner site ChicagoNow, I summed up the techniques I use to figure out what no-name hotels are being offered on Priceline or Hotwire. These techniques are for using when you hope to stay at a specific property but don’t want to pay the publicly available rate:

1) Check the site you’re shopping on and other booking sites to find out how many stars your desired property is listed at. Note whether there are other properties with the same number of stars listed in the city or neighborhood.

2) Check whether the site you’re shopping on offers your desired hotel as a named property. I don’t know if this is a hard and fast rule, but I’ve noticed that if Priceline is offering a property upfront, you’re likely to find the very same place on the “name your own price” section.

3) Check a forum such as BetterBidding or BidonTravel to find out what hotels others have gotten recently by bidding in the same area you’re looking in. Usually you will notice that in a certain star category, everyone has gotten the same property. If this ISN’T the property you want, don’t bid because this is the property you’re likely to end up in!

4) If others are indeed getting your desired property, go ahead and figure out what to bid. This is something you can also learn from BetterBidding; people post the amounts of their winning and losing bids, often revealing the lowest possible price that will “win” the room. If you’re not sure what the lowest possible price is, and you have enough time, bid lower than the lowest price you see others have paid and try bidding again when allowed 24 hours later.

5) If you don’t get winning bid information from other travelers, just try bidding 50-75% less than published rates. BidonTravel’s tip sheet suggests checking rates for the same day of the week you’ll be traveling on.

In the past, I have used these techniques to get into the same hotel as other family members for a wedding and to get in the preferred spot for an urban getaway.

However, the techniques are NOT foolproof. Take this weekend, when my family is heading to a wedding near Milwaukee, Wisconsin. I did my research, and felt pretty sure that the Hilton Garden, where the family was staying, was the only 2-1/2 star hotel in Oconomowoc, a small town west of the city. I went on Priceline and bid for 2-1/2 stars, only to be informed after bidding that I had been “upgraded” to a 3-star property across the freeway.

Oh well — maybe after a weekend of wedding activities, we’ll have had enough family togetherness by the time we hit the hotel anyway. And at least I paid less than half of what I would have paid through my desired hotel’s Web site or on the phone.

There was a warning that my scheme was not going to work out: Priceline had marked the 3-star category as the “best value” before I entered my bid. If you’re bidding and see such a mark on a higher star category, I would expect to be upgraded to the category Priceline is pushing, whether you like it or not.

Photo by Oakbrookterracehotels, used via Creative Commons license.

Alaskan cruise scenery

Carnival Cruise Lines’ CEO Micky Arison says earlier word that the company planned to file litigation relatively soon against Alaska’s $50 per passenger head tax was a misunderstanding.

That turns out to be especially unfortunate for our 49th state, because Arison amended his press conference comments on Tuesday to say that the cruise industry will challenge the tax. In other words, Alaskans have an even bigger fight on their hands to keep this particular revenue stream.

Sure, cruise lines have griped about this tax, approved by citizen referendum in 2006, all along. Arison is on record calling it “unconstitutional and, in fact, effectively illegal” in March. It goes hand in hand with his appearances at Alaskan legislative sessions pleading his case.

So far, the cruise industry has been limited to using capitalism to fight back: Carnival Corp., Royal Caribbean Cruises Ltd. and NCL Corp. have said they can’t absorb the dwindling profit margins from floating in this part of the world, and announced they’re pulling capacity here for 2010. All of them blamed this head tax.

But when the U.S. Supreme Court put the lid on Valdez, Alaska’s tax on large cargo ships back on June 15, citing the Constitution’s “tonnage clause,” the 7-2 ruling opened the door for legal fights on the tourist tax as well. Lobbyist John Binkley with the Alaska Cruise Association wouldn’t be surprised if the challenge ends up being passengers in a class action suit, either. Joe Geldhof, the lawyer who cowrote this tax legislation, told local newspapers he thinks the issue is apples and oranges: the Supreme Court struck down the idea of taxing physical ships, not people.

In 2008, the state coffers collected $46.8 million from the passenger head tax. There’s no estimate on the hit the tourism industry could see from a decrease in ships calling at their ports.

Meanwhile, other prevailing voices inside the travel industry say the entire issue is a smoke and mirrors deflection. The real problem, they contend, is that we simply put too many cabins in that market to start with, creating a supply glut that drives prices — and thus profits — down.

Whatever the answer, average Joes who thought they could never afford to see Alaska are getting that chance this summer, with prices discounted by as much as 80 percent. Certainly I’m the last person on earth to deny companies their need to make a buck, but let’s hope the outcome in this situation allows more Americans the economic means to view this state.

Photography: Noel Zia Lee

Visitor Review allows customers to post videos on company sites.

It’s no secret that travel promoters are trying to make use of social media. High profile examples are the headline-grabbing efforts of a California winery and the government of Queensland, Australia, which offered “dream jobs” for lucky hires who were to post videos, blogs and Tweets about their boss’s pleasant destinations.

As fun as those actions were, everyone who uses social media understands that the best-received social media messages come from other travelers, not employees. That’s why I’m a lot more likely to take the advice of a random stranger whose review is posted on UpTake’s Napa page about what to do in wine country than from whoever Murphy-Goode hires to be their “lifestyle correspondent.” (They’re announcing the winner of the $10,000-a-month “job” July 21.)

This is why I’m intrigued by Visitor Review, a platform created by British company’s Digital Visitor that is up for a travel industry award in its home country. Visitor Review gives companies the technology to post visitor videos on the company Web site, turning satisfied customers into spokespeople to whom customers in the social media age might really listen. Of course, since the Web sites belong to the travel provider or organization, Visitor Review does not replace an unbiased forum like UpTake. The site using Visitor Review is going to want to hand-pick only the most complimentary reviews.

Still, the platform seems like a really useful tool to allow companies to get the word out about their good points in a very compelling format. Customers include the SS Great Britain and VisitBritain.com.

Photo by Jeffisageek, used via Creative Commons license.

Do airlines really want to give bored, angry passengers more ways to express themselves?

Last time I posted about how the government has fretted about security concerns as more airlines prepare to give passengers wireless access in-flight.

As protestors Tweet and Facebook the Tehran unrest around attempted government information barricades, it occurs to me that what airlines really should be worried about is passengers live-Tweeting their in-plane experiences.

What happens the next time passengers are stuck on a tarmac for eight hours, short on fresh water and air, not to mention baby formula and pizza? Wireless access could help make such a situation more bearable by alleviating boredom and helping stuck passengers make arrangements for onward travel once they get off the plane. Even without wireless, passengers with high-end cell phones can already Tweet and Facebook their misery to the public. Add the ability for every laptop-holder on the plane to blog and Tweet it, and a small customer service problem turns into a national, real-time public relations disaster for an airline.

Stories of torture-by-airplane are damaging enough when they’re reported after the fact. CNN’s Anderson Cooper recently Tweeted about a terrible flight experience, complete with a flight attendant who lost her cool in a lightning storm.

Imagine how much more impassioned and attention-getting those Tweets would have been if they’d been live. I can imagine passenger photos and videos making their way onto the content-starved 24-hour news channels, fairly or unfairly making the crew in such situations look really bad. And what if passengers who tend to overreact to a little turbulence start Tweeting that their planes are going down or that the pilot “must be drunk”?

And once the wireless is on, can you imagine the reaction if the crew decides to turn it off in a delay or other unfortunate event to prevent such PR disasters? Tehran-watchers haven’t seen anything compared to the kind of revolt that would foment.

Photo by elisfanclub, used via Creative Commons license.