I spend a lot of time in social media land, and the “hot” discussion last week among consumers last week hinged on who trusted the H1N1 flu shot, and how to avoid getting sick if you skip it. Many folks were suggesting canceling vacations, siting cruise ships in particular as inescapable traps of swine flu germs. 

That fear is the last thing the travel industry — and cruise ships in particular — need right now. 

Sure, the cruise lines have pushed the antibacterial wipes at every opportunity, parking sanitizer stations at the entrance to the buffet line and requiring folks to use it before eating. They have crew members outside the ship to spray down passengers’ hands before allowing them to reboard, and play videos on the ship’s channel explaining how to use a Kleenex and wash your hands properly. They screen passengers at embarkation for signs of illness and request medical exams if anyone appears to be under the weather.

Thermal imaging is red hot

But now MSC Cruises has taken flu safety yet another step by installing sophisticated thermal imaging cameras on every ship to monitor passengers as they embark. One of the principal indicators of influenza is body temperature, so these cameras produce infrared images or heat pictures of a person’s body and detects within seconds whether a body temperature exceeds a certain threshold temperature. Apparently, the secret lies in the eyes — the temperature around the tear ducts is consistent unless you’re fighting the flu

MSC Cruises calls the infrared camera a “very effective yet non-intrusive tool for detecting people infected with a viral disease even at a very early stage.”

It’s a measurement the US Center for Disease Control and the World Health Organization have used for years. Airports in China have used them since the SARS break-out in 2003.

The travel press is off and running with this news release, travelers began sending out Twitter messages, and even USA Today spread the news, which tells me the camera is doing its job. I personally think its effectiveness with that sliver of the population that lives in paranoia is nil. For instance, didn’t the infected person you caught in the lobby just expose the folks standing in line to also board the ship? They may not come down with the illness for days, if at all, but continue to spread the love long before their tear ducts rat them out.

But for the general population, news that the travel industry is actively working toward mitigating the situation is good enough to keep business flowing. The infrared camera may do for vacations today what the digital SLRs did at the turn of the millennium.

Photography: jurvetson

The NBTA, US  Travel Assoc.  and others are pushing the value and advantages of face-to-face meetings, and starting to pushback against teleconferencing.

Cisco Telepresence

On Sept 15, 2009, the USTA is going to announce the results of an Oxford Economics study which highlights the return on investment of all kinds of business travel. The study is funded by the Destination & Travel Foundation.

Also, during the recently concluded National Business Travel Association (NBTA) International Convention in San Diego (Aug 23-26), British Airways launched the second Phase of  its “Face-to-Face” Campaign.

As part of this campaign, BA and its partners – Regus Office Services, Courtyard by Marriott, Canon USA, Inc., and British Airways World Cargo – will award 100 small-to-medium size U.S. businesses free travel to anywhere in the world where British Airways flies plus valuable products and services to help support their businesses and maximize their travel experiences. More details here – www.ba.com/facetoface.

To help reinforce the idea that in-person meetings do really drive business, British Airways also commissioned a survey of Harvard Business Review readers. Results from the survey show that 95% believe that face-to-face meetings are key to success in building long-term relationships, and 89% agree face-to-face meetings are essential for “sealing the deal.”

At the same NBTA conference, President Bill Clinton, in his keynote address on Aug 26, stressed on the importance of in-person meetings. He said that although he used all the latest communications technology to confer with others, he never thought it didn’t matter if he or his representatives went places in-person.

But just a few months back in June, everyone was going ga-ga over the new telepresence systems being installed in 25 hotels by Marriott and in 10 hotels by Starwood. The novelty apparently has worn off, and more importantly – the shocking cutbacks in business travel budgets due to successful acceptance of the teleconferencing culture is sending shivers down the spines of travel service providers.

Those selling teleconferencing technology are demonstrating vividly how succesful it is. Cisco Systems Inc. – which has over 300 Corporate clients including Starwood Hotels & Resorts Worldwide for its Telepresence system – has slashed it’s annual travel budget from $750m to $240m.

 Hewlett-Packard Co – which hogs a big market share with Halo, with clients including AMD, Nokia and Marriott International - has reduced it’s own travel budget for 2007-08 by 30%, and expects to cutback even more in 2009 – mostly due to expanded use of video conferencing.

The recession forced businesses to cut back on travel and experiment with video conferencing. And the worst part is that once a company has instilled a virtual conference culture, it never will go back to spending as much as before on business travel. 

Face-to-face meetings may be essential as deal closers, but the wave of the future is teleconferencing. GM and Chrysler ended up in a ditch because they refused to acknowledge the green wave. If the travel industry refuses to do the same with  teleconferencing, then there’s going to be a day of reckoning soon.

Numbers show travel growing again

For some time now, we have all been awaiting stop signs for a travel industry in freefall.

Based on recent analysis we have seen from Piper Jaffray and Citibank, it can now be said that perhaps travel – and more specifically, leisure travel – may be bottoming out.

After the global economic meltdown, Silicon Valley investors had a tongue-in-cheek saying that “flat is the new up.” By that definition, and taking into consideration the trends and data discussed below, the good news is that U.S. Travel is growing again!

Yes, this is a bullish view on our sector, but even if it’s premature, who couldn’t use good news?

US Hotel Industry RevPAR

Source: Smith Travel Research

2009 is trending to be the worst year for travel since 2002, but there might be good news amidst the carnage.

The U.S. hotel industry’s occupancy and average daily rate (ADR) – and therefore revenue per available room (RevPAR) appears to have stabilized during the course of the summer, albeit at low levels.

US Hotel Industry - Key Operating Statistics

More evidence comes in the form of the steady weekend rates for leisure travel, which also points towards the existence of a stable revPAR.

US Hotel Industry - Weekend Operating Metrics

Across the Atlantic, the recovery is even more impressive, with European revPar showing signs of bouncing back already.

EU Hotel Industry - Operating Metrics

The situation with online travel remains fluid. According to Citibank and comScore data, online travel spending dropped 9% Y/Y in July, representing a deterioration compared to the 7% Y/Y decline seen in June.

This July decline can be attributed to a 15% Y/Y decline in hotel reservations, which represents 24% of the total online travel spend. Also contributing to the drop was a 16% Y/Y decline in Travel Packages (6% of spend).

The 16% drop in travel packages was partially offset by a 4% Y/Y bump in car rental spending (11% of spend). And the online spend on Air Travel declined only 8% Y/Y in July, a slight improvement compared to the 10% Y/Y decline reported in June by comScore.

These are notable changes for the month in individual categories within online travel, but we recommend a focus on the direction of aggregate spend.

From here on, the year-on-year comparisons for 2009 are going to look increasingly better every month, in part due to the weak performance in the last quarter of 2008, and in part because travel is finally on its way up.

Photo by rednuht

The Chelsea Hotel

Welcome to the new era of “we’re so desperate for money, let’s see if this works” from cities and states.

New York City, whose mayor just last summer said it wasn’t smart to raise taxes on tourists and kill the goose that lays the golden egg, just passed a new tax on travel agency service fees for hotel sales for hotels in the Big Apple.

Yep, starting September 1, the difference between amounts received for booking a hotel room and amounts paid to the hotel operator for the room are taxable, according to Travel Trade reports, which means “any service and/or booking fees that are a condition of occupancy.” Apparently, commissions are exempt (today) and no one knows how this applies to packages.

On the other hand, this tax applies to every channel and across the globe, so if you’re an online booking engine in Switzerland, you pay NYC by remitting the amount owed 20 days from the last day of February, May, August and November. Great. Still more deadlines to keep straight. Oh, and make sure you fill out the travel seller application form in the next two weeks as well.

The American Society of Travel Agents has spoken up against this idea, with the senior vice president for legal and industry affairs pointing out that this is double taxation, as the travel agents will also get hit for income taxes on this same amount. Such laws, he said, have been written by ”people who don’t know about the industry who just want more money.”

Well, their grasping while hotels are gasping could be city officials’ downfall. The procedure to file and track these pennies, nickels and dimes is so unwieldy, in the real world, the tax is an incentive to walk away from selling NYC hotel rooms. And since the tax encompasses the big boys like Expedia, Hotwire, Priceline, Travelocity and Orbitz (to name a few), that adds up to substantial cash flow coming into New York’s coffers.

The tax also sets up an adversarial relationship that travel agencies feel compelled to win, lest every city jump on the bandwagon and small businesses spend their days tracking who has their hand outstretched instead of actually selling travel products to consumers. My prediction: Look for a huge drop in room occupancy in NYC for the fourth quarter.

Photography credit: Jim Linwood