Travel Industry

Elliott wrote a great summary of the Travel Innovation Summit and I wrote a summary of the rest of the PhoCusWright Conference. Here’s a lighter view of the best and worst  of the PhoCusWright 2009 Conference.

Best Sound bites – tied

• Robert Flynn from Frommers on why professional content is the best way to go, referring to why TripAdvisor is flawed said,  “We (Frommers and other professional publishers),  don’t need to put the word ‘trust’ in our tagline.”
• Tom “Mr. Walking Sound Bite” Romary, president of Yapta in response to Bob Offutt’s question “if you had a magazine title, what would it be”. Tom’s answer “Playboy: The naked truth (on prices)”

Best guerilla marketing

• The Yapta Cabana. Yes, by the pool. Yes, open to 3am (to the chagrin of the Omni security). And yes, stocked with Oban single malt scotch and ice. Bravo!

Oban Single Malt Scotch

Hardest comment to agree – or argue – with

Jeff Boyd,  “Online media in travel is slowing and it’s hard to break through against Kayak and TripAdvisor”.

• Yes, it’s hard to compete with those two 800 and the 8000 pound (Google) gorillas respectively. But they do $100M, $300M+ and $2B in annual online media revenue respectively and the online media sector in travel is north of $3B annually, so it’s likely worth trying. On the other hand, Priceline grew 47% YoY, they dominate European hotels, they have typically zigged when everyone else zagged, and their market cap is currently bigger then Expedia’s – so who’s going to argue with their strategy, execution or anything their CEO says?

Worst personal moments – tied

• Realizing there was no  coffee at 8:45am on Wednesday morning. Coming from the West Coast, that was cruelly early and unusually harsh.

No coffee was a low point

• Realizing it was 3:00 am and I was in the Yapta Cabana with a glass full of scotch

Best “I’m too cool to be flustered” routines – tied

• Jason Shulman from x+1 who had to do improv for 15 minutes while they tried to figure out why his presentation wasn’t working.
• Philip Wolfe and (most of the PhoCusWright team during the fire alarm. It was remarkable how they got the show back on schedule.

PhoCusWright execs were cool under pressure

Worst example of charismatic leadership (good leadership channeled in all the wrong ways)

• An unnamed OTA executive (almost) convincing conference attendees to go swimming at 3am (yes, this is related to the Yapta whiskey)

Best microcosm of the value of twitter and whether it’s connected to mainstream anything

• (Elliott, please don’t stone me) – Realizing there was no correlation between the twitter/blogger sentiment of who the top innovators were (e.g. excellent summary posts by Tim Hughes, Stephen Joyce, Kevin May, and Elliott Ng) and who the Conference attendees & Judges voted as the winners

Best teams no one is talking about

• Travis has done a remarkable job rebuilding the Travelport team. Scuttlebutt is they have hired bankers are going public in 2010
• Paolo has quietly built a very talented and hungry team at VFM Leonardo. Plus they have the corner on high quality photos and video.

VFM Leonardo corners the market on high quality photos and video

Worst team that people were talking about

• {Pat made me take this out}

Best stuff left for us to read between the lines & Best company to follow in 2010

• Bob Denier on why he and Dave Litman returned to launch Getaroom and how it’s similar to Hotels.com,  “We stick to our principles (that in a down market we can get hotels to give us huge discounts AND pay over 30% for us to sell rooms for them), stay disciplined to numbers and making money (we made over a billion dollars last time around, so we think we know a little bit about this), and move fast (amazing to Dave & I that 10 years later, Travelocity and Orbitz still don’t have hotels businesses.)”. Especially if you believe the Cornell and Jake Fuller data that the hotel sector is 3-4 years from recovery…

Worst post-conference moment

• Seeing poor Bruce Rosard wear a Yankees cap because he lost a bet when the Phillies lost the World Series.

Best Lazarus act

• Barney Harford, Mike Nelson, Frank Petito, Ramesh Bulusu and the rest of the Orbitz team. From death’s door with the fee cuts to surviving, thriving and now with a fresh $100M in cash.

Best persistence in continuing to flog the same product even though we aren’t buying (yet?)

• Rob Torres and video in a blog interview with Tim Hughes. Hard to feel sorry for anything or anyone at the 8000 pound gorilla called Google, but selling video and brand in this travel economy can’t be easy.

Best after-conference events – tied

• AC/DC concert – unnamed OTA executives clever nuff to sneak off

The Little Duck at AC/DC

• Alligator night tour of the Everglades with the Travel Insights 100 and UpTake Blog Network bloggers

Travel Insights 100 and UpTake Blog Network tour of the Everglades

Best real data and substance

• Hands down – the Bill Carroll, Chris Anderson, Jake Fuller presentation on why the lodging industry will be in the tank until 2012.

Lodging Recovery Scenario

What were your favorite and worst moments? Let me know! (you are most welcome to make fun of my best/worst moments, but please submit yours too!)

Photos courtesy of:

• Oban Single Malt Whiskey
• Coffee cup by m4tik
• Fire Alarm by selva
• Alligator from AllAnimalWebGuide

According to a new survey from AirPlus International, a global provider of corporate travel payment solutions, more than 60 percent of the travel management professionals it surveyed are not aware of the U.S. Travel Promotion Act. There’s no good news to follow that: 29 percent of those who have heard of it are unsure of the details, 53 percent were unsure how the money collected would be used and another 73 percent believe other countries will be glad to reciprocate on fees for U.S. travelers.

Ouch.

The breakdown

For the record, the TPA will create a non-profit corporation and a new Office of Travel Promotion within the Department of Commerce. The funding comes from charging $10 per visa waiver and the private sector will match the money dollar for dollar (20 percent cash, 80 percent goods and services).

“This Act will certainly have an impact on the travel industry overall, not just business travel … Clearly, the results indicate that there is not enough awareness of the Act,” says Richard Crum, AirPlus’ president.

But don’t mistake ignorance for rejection. Acceptance among those who do know the score is running high:

• “I think it’s very much what everyone envisioned,” Joe McInerney, president of the American Hotel & Lodging Association told his trade press. “It’s a no-brainer. It’s a win-win situation; doesn’t cost the government anything. It attracts more people and creates more jobs.”

Graph of responses

• Oxford Economics estimates anywhere from $1.8 billion to $4 billion of new revenue will be brought to the U.S. These estimates are based on the revenue that was generated in comparable campaigns in other countries. Studies in the U.S. show that previous one-off travel campaigns have pulled in $117 for every $1 invested.

Perhaps the folks answering AirPlus’ survey have tapped into Europe’s reaction to the looming law. According to VIPs in the European Union, “The key is these procedures are irksome, and making them more irksome is generally risky. Travelers don’t care if it’s $10 or $20, the whole business is just an additional procedure.”

The bill is now in the Senate for approval.

Photography: AirPlus Community

Sen Charles Schumer

Where is the line between private business and government intervention?

According to Businessweek, Senator Charles Schumer (D- NY) is willing to jump in between consumers and airlines/credit card companies to ensure frequent fliers don’t get screwed on frequent flier points. He’s apparently read consumer complaints about their miles expiring without clear notice and the ever-changing value of miles  — no word if this includes American Express’ latest decision to attach miles to payment habits.

In a brilliant flash of business knowledge, he said that “he suspects consumers are actually paying for frequent flier programs through air fare and fees” and therefore fall under U.S. federal protection. He estimates 20 percent of the 10 trillion unused frequent-flier miles in circulation will never turn into a reward. Well boo frickin’ hoo.

OK, technically, he’s right. Loyalty programs do require money to function, and consumers are entitled to protection if a big, bad company is beating them up. However, Schumer apparently didn’t spend much time working for his dad’s exterminator business growing up because his lack of business knowledge 101 is showing on this one. While a few pennies of someone’s final price goes toward funding that program, that final price on a traveler’s ticket also covers the cost of printing direct mail pieces, holding educational sessions for partners, paying research firms to determine effective broadcast commercials, and other marketing moves. Mileage programs are not bought-and-paid-for amenities being  yanked away at the last second. They are lagniappe, as they say in New Orleans — a far cry from fodder for legislation.

That would only come into effect if there were a separate, higher, pricing structure for frequent fliers compared to those who don’t have a membership in the club. Or if travelers paid an annual fee for the right to earn points. Schumer’s current pet project could open a nasty can of worms for all retail and service businesses offering loyalty programs. For starters, coupons would never expire.

Do consumers have a reason to complain about the program structures? Probably. But it’s still an elective activity on their part that they don’t pay extra to join. So I say the solution is best worked out between the airlines and their customers rather than having Big Brother Uncle Sam dictating the negotiations.

What do you say?

Photography: zawezome (Flickr)

Avis now tries harder to get a commitment

Rental car company Avis Budget Group has found a way to make money off deadbeats in North America, South America, Australia and New Zealand.

he idea is to begin charging a fee when customers reserve a vehicle but fail to show up for the car keys. The concept is similar to hotels assessing one night’s room rate to the credit card on record should the guest not appear — but it’s a first for the car rental niche. “It’s a long overdue change,” officials are saying.

Currently, the company is working to make sure its GDS partners are equipped to take credit cards in advance for that purpose. Amadeus, Sabre and Travelport spokespersons are saying they’ll have their end ready by mid December.

So far, the travel industry hasn’t raised an eyebrow, even though booking a rental car the traveler has no intention of claiming as part of a package to bring other element prices down is a fairly common strategy among agents and DIY online consumers. Perhaps that’s because Abrams Consulting Group is saying no-show rates for rental cars have reached 30 percent. “You’re planning your fleet around peak periods,” says Neil Abrams. “You run the risk of not renting all the cars you should have or you overbook and leave customers stranded at a cost to the company. It’s a tactical issue,” he told The Beat business newsletter.

Budget says no more to no shows

Add that to the fact Avis Budget Group saw a 14 percent decrease in third quarter revenue in 2009 compared to the same period a year ago. On the other hand, it’s third quarter EBITDA (that’s a faster way to say earnings before interest, taxes, depreciation and amortization) increased 17 percent. “We remained intensely focused on controlling expenses  throughout our operations and have increased our forecast of realized cost savings for 2009 to $350-400 million,” says Ronald L. Nelson, Avis Budget Group Chairman and CEO.

The real test, however, is how well travelers accept the new rules. The risk, of course, is that other rental car companies will fail to follow and customers will give those competitors their business instead, as they like the idea of a no-commitment reservation should they find a lower price elsewhere at the last second. (Enterprise Rent-A-Car  has already said this isn’t part of its business model going forward; Hertz and Dollar Thrifty haven’t committed.) Still, the rules are as friendly as possible under the circumstances: Renters can cancel the reservation up to 24 hours in advance without paying a penny. If a delayed flight is behind the failure to appear, the customer is good as long as he or she gave Avis Budget Group their flight number in advance.

Heck, according to early communications with the GDS firms, Avis and Budget may even choose not to slap a no-show fee at every location.

No word yet on whether the no-show fee will be a flat rate or the average daily rate including applicable taxes and surcharges.

Photography: Avis Budget Group

Thanksgiving travel to decrease

When it comes to going over the river and through the woods to grandmother’s house for Thanksgiving, roughly 19 percent of last year’s travelers are rethinking that journey this November 24.

But that’s not the bad news. According to American Express’ latest Spending & Saving Tracker, more than one in 10 young professionals intend to drive instead of fly, 8 percent intend to stay fewer days for Turkey Weekend, and 7 percent of this crowd will use reward points and miles to help pay for the trip.

Comparatively, 7 percent of the general population and 6 percent of affluent demographics say they will drive, 3 percent in both categories are taking the “Hi! Bye!” schedule, and only 4 percent of affluent and 3 percent of the general population will lean on deals.

In other words, we’re training the next generation of discretionary income earners to cut back on travel. And as many businesses know, old habits die hard. 

The short-term picture isn’t that bad. For instance, 78 percent of the affluent expect to spend more or the same over the next 30 days in restaurants, while the general public says it will spend less on groceries — another positive sign folks could be throwing caution to the wind to celebrate. Pamela Codispoti, the American Express senior vice president and general manager of Cardmember Services, agrees.

“These results show that consumers do plan to open their wallets this holiday season, starting with Thanksgiving travel, but many are re-prioritizing those expenses,” she cautions.” If Halloween is any indication of things to come, 36 percent of young professionals said at the end of September they plan to purchase less expensive costumes this year, compared to 16 percent of affluent and 15 percent of the general population that admitted the same thing. In fact, 26 percent are making their own customer or using hand-me-downs — while only 13 percent of the affluent and 11 percent of the general population plan to take that route.

Who needs travel?

Sigh. More of those frugal living traditions forming that could bode ill for the travel industry’s cash flow in the fourth quarter.

So what does the airline industry do in light of this payment skittishness? Just this week, American Airlines, Delta, Northwest and USAirways announced  a $10 per ticket surcharge — each way — for flights on Nov. 29, Jan. 2 and Jan. 3. This is in addition to luggage fees that increased in 2009, and additional charges for specific seats in the coach class. “Yes, it brings in a lot of sorely needed revenue to the airlines — but to the detriment of holiday travelers, who are already paying stiff fares for those high-traffic days,” FareCompare.com’s CEO Rick Seaney told bNet.

While pricing experts will hammer home that discounting services isn’t always the right answer, even in a recession, merging an attitude of gouging with a population losing interest in the product don’t bode well for a healthy profit in this industry down the road.

Photography: CarbonNYC (Flickr), Ali Edwards (Flickr)

Editor’s note: Gene McKenna is one of UpTake’s founders and he believes in the power of the Wiki. Gene sees Wikipedia as a solid information source for travelers’ seeking information about other countries, cities and towns they plan to visit. The problem is he fears wikibullies are going to take over and squash the grass roots, open sourced information which is the basis of Wikipedia and the source of its rich information. This essay is his quest to stop wikibullying. 

Wikipedia is now filled with bullies

I can hardly claim to be a Wikipedia Newbie – my first edit was Feb 18th, 2004 about Cesar Chavez. I’ve probably done a few hundred edits since then on maybe a dozen or two pages, and I have created several pages.

And that experience has taught me that Wikipedia has become a house of bullies.

Speedy Deletion

Back in 2004 Wikipedia was a very friendly place and contributions from just about anyone were welcome. In 2009, I challenge a newbie to create an article on Wikipedia and have that article exist for an entire week. Guaranteed, your article will be marked for “speedy deletion” within about two minutes of its creation.

I’ve had a page deleted for being ‘too commercial’ even when the page was describing a non-profit group of volunteers that have been operating a ski hill for over fifty years. When I put the page back up some Wiki-bully warned me that putting back a deleted page is “a sure way to piss people off around here”- as if I am I am not a person “around here” and as if I shouldn’t be upset that someone deleted my page!

Now that same page, having survived a month of its second life, is marked as “not notable” and may be deleted soon. Perhaps every elitist Wiki-bully learned to ski at Vail or Aspen, but where I am from, Kettlebowl is a pretty notable ski hill.

So I am learning to be a bully too! My photos were being deleted left and right. It didn’t matter if I checked the box that I totally, ultimately swear that this is my own work and I agree to share it with the world. If some Wiki-bully didn’t like it – poof! It was gone. So I have found that if I put it back with a terse comment in the description like “Don’t delete my photo again!!!!” it is more likely to be left undeleted. Now I’m a bully too!

‘Bot Bullies

A good way to tell how bad the bully situation is, is by counting the number of ‘bots’ that edit your page vs the number of humans. A ‘bot’ is a computer program that reads pages and makes changes automatically so a human bully doesn’t even have to bother with you. One bot exists solely to annoy me by changing statements like ‘4th of July’ to ‘4 July’. The name of this ‘bot’ even indicates that its creator sees himself as a bully – it’s called ‘Smackbot’. I imagine the creator of Smackbot was a kid that no one listened to in high school so now he is going to smack everyone around on Wikipedia. Way to go Smackbot-man!

Complex Rituals

Part of the problem, to be sure, is not that everyone on Wikipedia is a bully. I am sure that most of the heavy Wikipedia users are great people and they mean well. But they may forget that newbies aren’t born knowing the proper communication protocols of the wiki-community nor are they adept at wikipedia’s ridiculously crazy user interface and syntax.

For a newbie, it is not obvious, for example, that if you have a question about why some ’smackbot’ changed your page or why your article about the greatest raptor conservationist in America is considered Unambiguous advertising or promotion, that the proper thing to do is to go to that person’s (or robot’s?) talk page, look past all the wonderful awards he has won, and edit his talk page to leave a question. (Actually, I still don’t know if that is the right thing to do.)

And if you do edit someone’s talk page, don’t dare get that process wrong, because some Wikipedians have extensive instructions on their talk page about the correct way to write on their talk page and they will clearly be upset if you don’t write on their talk page correctly. At least one of them made a useful widget to help ensure you can write on his talk page correctly.

Of course, dear Newbie, you know that when you edit someone’s talk page you should sign your name by typing ~~~~ – that is obvious, isn’t it? And when you go to upload that photo (that will soon be deleted) and you first login to wikipedia, you will then be told that you should really be logged in to wiki-MEDIA instead. What’s more inviting than having two make two new online accounts in order to contribute?

Britannica

Between the learning curve of Wikipedia culture, the Wikipedia UI and the tolerance of some of its bullies for people not already steeped in that culture … who has time for this?

Wikipedia is dead – the Britannica staff has taken over.

Click here to read Gene’s proposal for how to make Wikipedia more inclusive and Newbie-friendly.

Return to Gene’s Home Page

This post is part II of a series we’re doing on detecting travel trends and holiday weekend hotel booking patterns, based on an analysis of data collected by UpTake. In Part I, we saw the trends and patterns in the San Francisco market. In this post, we’ll be looking at the New York area data, which shows significant differences as compared to San Francisco.

W New York Union Square

The first data sample was taken on June 19, and the results of successive rate checks were noted down all the way through the 4th of July weekend and onwards to-date, leading up to Labor Day. The hotels included are all 3 or 4 star hotels in New York City, and spots ideal for drives out of New York City, like the Hudson Valley and Cape May, NJ.

Rates for the 4th of July weekend at hotels in New York City start creeping up surprisingly late. As of June 19, the 4th of July weekend rates at the W New York Union Square and The Benjamin Hotel were actually less than the weekend rates offered for bookings 4 weeks on. At the Sofitel New York, both the weekend rates and the 4th of July rates were exactly the same.

The same thing happened again, in the next sample taken on June 26. What does this mean? To make sense out of this, you have to look at the data for the rest of the New York region. In samples taken for both Cape May, NJ and hotels in the Hudson Valley, most units were completely sold out - as of June 19 – for 4th of July stays, which made the June 26 sample redundant.

In places perfect for getaways from the City – where bookings were still available as of June 19, such as the The Bell House in Hillsdale, rates were at a premium  -$175 for 4th of July bookings, as compared to $150 for weekend bookings 4 weeks on. 

This heavy demand in areas surrounding New York City, taken in conjunction with the lack of demand in New York City itself, suggests that during the 4th of July weekend, more people actually leave the City, than come in to visit. Mayor Bloomberg might want to dispute this notion, but numbers don’t lie.

Moving on to the Labor Day bookings, the trends are much brighter – and faster – for New York City. In the previous post, we saw that the cutoff date for Labor Day bookings in the San Francisco market is August 6 – beyond which the prices start going up beyond standard rates.

For New York, the cut-off date starts much earlier. In five successive rate checks conducted between June 19 and July 20, the Labor Day weekend rates for New York hotels held steady at rates less than advance booking rates for non-holiday weekends. But in the sample taken on July 26, the Labor Day rates for all sampled hotels in New York City shot up. 

The W New York Union Square offered $249 nightly weekend rates and $344/night for the Labor Day weekend. For the Sofitel New York, it was $225/$265.

Rates outside the City – in the Hudson Valley and in Cape May, NJ – did not go up for Labor Day. On the contrary, Labor Day rates at NYC getaway hotspots like the Albert Steven Inn in Cape May actually dropped to $165  in comparison to weekend rates of $210. Rates at the aforementioned Bell House in Hillsdale remained the same ($150) as weekend rates.

This means that less New Yorkers go out of the City for Labor Day, as compared to the 4th of July. The overall inference here is that New York City’s hotel booking patterns depend not only on incoming visitors to the City, but also heavily depend on the vacation patterns of NYC residents. Why this is so a matter we’ll discuss in a forthcoming post.

Photo courtesy Starwood Hotels & Resorts Worldwide

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

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

AAA may be known for its travel membership services, but it’s picking up some nice profits in the banking arena. The association announced this week that its partnership with Discover Bank (which most people recognize as the Discover credit card in their wallets) has raked in $1 billion across 25,000 accounts in the AAA Savings Program in a mere 18 months.The program exceeded $500 million from its launch in January 2008 to October.

Still profitable

Basically, 40 AAA clubs offer money market products, certificates of deposit and individual retirement account certificates of deposit at an additional 5 basis point interest rate over Discover’s competitive rates. The products are FDIC insured.

“The ongoing difficulties at some of the world’s largest financial institutions have clearly caused many consumers to re-assess their banking relationships,” said Doug Bower, AAA vice president of Travel and Financial Services. “AAA is a strong and trusted organization with a reputation for always putting its members’ interests first. The confidence consumers have in AAA, coupled with the outstanding rates of return we have been able to secure through our relationship with Discover Bank, are a winning combination in today’s unpredictable financial services environment.”

Which, of course, begs the question: Just how much clout will AAA’s 51 million members yield in the travel industry of the future if they can amass this much money from a splinter percentage? It already holds preferred relationships with 12 cruise lines, 17 tour companies and a deal with the almighty Disney amusements. AAA members spend $38 billion on 345 million U.S. room nights at hotels, which accounts for 39 percent of this country’s overnight business.

I’d say the message is that the travel industry has to ban together in similar consortiums and federations for survival — the independents Lone Rangers aren’t long for this world. And never be afraid to diversify, as you might just find an extra billion out of the deal.