Travel Industry

Celebrity Cruises has taken the ultimate step to close the gap between cruises and all-inclusive resorts: It is now selling unlimited alcohol packages. Cruisers can pay one price and start ordering without fear of that gut-wrenching bill on the final morning.

All-you-can-drink new cruise option

According to TravelMole, Celebrity’s unlimited beer package starts at $34.50 per night, the classic liquor package at $51.50 per night (serves middle-shelf liquors such as Johnnie Walker Red and Absolut Vodka, and the premium liquor package starts at  $76 per night for top-shelf spirits like Johnnie Walker Black Label and Grey Goose vodka. Finally, a frozen drink package — think piña coladas, daiquiris, and margaritas — starts from $22 per night.

Until Celebrity begins implementing this option at the end of December, it’s difficult to judge the effect an open bar option will have on passenger behaviors. After all, to this point, soda and wine packages have been the only unlimited drink packages on the table. However, one of the unintended consequences could be a drop in customer service.

When Carnival held the naming ceremony party for its Dream ship on November 11, the overnight gala for travel agents, investors and other VIPs involved an unlimited alcohol policy. No, we didn’t see gangs of drunken friends in the dance clubs or folks crawling to their rooms, most likely because they couldn’t get that much alcohol in the first place. For example, my guest and I took a seat in the theater more than 30 minutes before the show intending to relax and order a couple of Cokes before the curtain rose. The waitress took orders in the first row, disappeared for 15 minutes, and returned with her tray loaded down with daiquiris, margarities, whiskey sours, rum and Coke, etc. She tried to repeat the trip for row 2, and barely made it back before the show started.

Obviously, our Row 10 was toast.

So we headed to a bar area after, only to find a huge swarm of folks waiting to place their orders with the bartender (which explains why the cocktail waitress in the theater couldn’t return in a timely manner — she couldn’t get the tray filled with any speed). I personally wasn’t jonesing for caffeine that badly, but my friend decided to stick it out. After she made it to the front of the bar line, 20 minutes went by before someone finally grabbed the hose and squirted some Diet Coke in her glass.

And this after she lost her temper and asked, “Am I invisible here?” All told, it was nearly an hour’s investment for that “premium” drink.

Certainly Carnival was not slacking off on its service standards, but the sheer volume of passengers packed onto a cruise ship presents traffic and work flow challenges in an all-you-can-drink scenario. Let’s hope Celebrity’s pricing structure is high enough to prevent this newest offering from becoming a detriment to this vacation choice.

Photography: brosner (Flickr)

There’s a new player in town, and there’s no doubt many travel services will welcome it with open arms.

Taiwan hospitals the new Taj Mahal?

OK, medical tourism wasn’t born yesterday — insiders estimate there are thousands of companies doing this around the globe, many of them mom-and-pop operations — but pretty darn close. More importantly, it’s growing up quickly, with Formosa Medical Travel predicting a 14 percent growth in Asian markets alone from 2009 – 2012. In a year when any growth at all elicits applause, that’s a dazzling future. What’s more, Formosa says high-cost surgeries like orthopedic, cardiac, and cosmetic top the list of drivers for medical tourism.

So American-owned Formosa has quietly built a travel niche from this trend, signing agreements with leading hospitals in Taiwan, and recently earning the backing of the Taiwan External Trade Development Council. Taiwan’s health care system is currently considered  one of the most efficient in the world, with administrative costs below 2 percent.

“While the debate over health care reform in the United States continues, the costs of medical care in Taiwan remain among the lowest in the world,” said Don Gilliland, Formosa’s chief operating officer, in a November 30 press release.  For example, the price of total knee replacement surgery at a JCI-accredited hospital in Taiwan, including all surgical costs, VIP accommodations, concierge service, transportation, and round-trip airfare, is generally less than $15,000, while the price in the United States is often upwards of $60,000.

At the moment, Formosa specializes only in arrangements for knee and hip replacement surgeries. And, sticking to the traditional travel agency format, it does not charge a fee for its role in the planning.

Meanwhile, the Medical Tourism Association is busy certifying members with similar services  — think Healthbase, Surgical Trip and WorldMed Assist — in an effort to shed light on the quality services such businesses can provide.

The real question for the travel industry is how to get in on this compatible profession before insurance agents seize the bigger slice of the economic pie. My suggestion: the larger travel agencies need to quickly open a division and recruit former medical employees to join as their staff. They already have the skills to book airlines, hotels and transportation. But it will take a different expertise to jump into choosing hospitals and surgeons.

Photography: Kazuaki.h (courtesy of Flickr)

Jane Seymour

How many godmothers does one ship need?

Before you answer, please recall that Royal Caribbean’s Oasis of the Seas is the world’s largest cruise ship. And thus just one person to break the bottle of champagne on its bow was never going to do.

So no less than seven celebrities were chosen to take part in the formal naming ceremony on November 30 (one for each neighborhood onboard) No official word on why RCCL chose these women, but assumptions are easy:

Gloria Estefan: She lives in the Miami area, where the ship will launch most of its cruises. Always a good idea to invite the home crowd.

Jane Seymour: Everyone wants their ship to convey the elegance and sophistication of a former Bond girl, and the resorcefulness of a Dr. Quinn.

Keisha Knight Pulliam

Michele Kwan: Known for her grace under pressure, Michele knows how to devote herself to the nitty-gritty details it takes to reach the big stage.

Keisha Knight Pulliam: Let’s face it. Everyone loved Rudy on The Cosby Show, and officials want that same loveableness to rub off on their new ship. And, so far, she hasn’t robbed a liquor store.

Daisy Fuentes: I’m stumped. Maybe they want to remind folks to drink a few glasses of milk during their cruise?

Dara Torres: Duh, she can stay afloat in water. It’s surprising all ships don’t recruit swimmers for their godmothers (or godfathers). Station her on the bow, boys.

Daisy Fuentes

The main idea, as anyone can piece together from this list, is to select folks who will draw a crowd to the ship. Make that a positive crowd, because Adam Lambert has proven he can create a buzz, but perhaps not the kind you want associated with your brand-spanking new ship.

But after someone sweeps up the broken glass and the crowd moves on to dinner, who remembers the hoopla even a year later? For instance, can you name these ships’ godmothers? (answers below)

1. Carnival Dream: Hint, she starred in Mystic River. Yah, that didn’t help me much, either.

2. Norwegian Dawn: She told the crowd “Don’t ever let anyone tell you that size doesn’t matter.” Most men over 40 still know her as Lassie.

3. RCCL Serenade: She made a big whoop out of the opportunity, as usual.

4. Crown Princess: Who’ve have thought a convicted felon would bounce back like this?

5. HAL Zaandam: The sisters sure appealed to the teenybopper crowd — but since they don’t have money or permission to go cruisin’, it was an odd choice.

6. Disney Wonder: They took the fairy part seriously.

1. Marcia Gay Harden, 2. Kim Cattrall, 3. Whoopi Goldberg, 4. Martha Stweart, 5. Mary Kate and Ashley Olsen, 6. Tinkerbell.

Photography: Alan Light, photocology, got milk? ads

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)

a few cracks are appearing in American Express

Talk about playing hardball.

The Associated Press is reporting that American Express will start stripping  the frequent mileage/frequent stay points any co-branded card users earned that month if they don’t pay the bill on time. The new rule will affect Delta, JetBlue, Hilton Hotels and Starwood Hotels accounts.

It is possible to get them back, of course — for a $29 reinstatement fee on top of your late fee and penalty interest rate.  That’s a steep price to pay for a mistake. (And what’s with the odd number? It looks like a retail psychology ploy to keep folks from getting pissed you charged them $30.)

“I think over the course of time, people miss a payment at least once because of unforeseen circumstances like something getting lost in the mail or a long vacation taking your focus off making your payments,” John Ulzheimer, president of educational services for Credit.com went on record saying.

American Express’ spokesperson is calling this a way of incentivizing good behavior by essentially spanking you for bad habits. Other credit card companies are simply calling it harsh  — although they don’t dare say it that bluntly. Even as they look to solidify profits in front of the February 2010 federal rules prohibiting certain fees and interest rate, that’s not on their radars, they point out.

• Citi: Pay late one month and the associated points might not be available for redemption until the traveler and credit card company settle the bill. But so far, American Airlines and Hilton cobranded card holders are safe from reinstatement fees.

• JP Morgan Chase: Blow off paying the account on your cobranded United card and you won’t earn new points until you settle the balance.

Delta is on record as being OK with this, and early feedback from consumers at blogs is a shrug. Not paying your bills on time still lands in “socially unacceptable” category in general … except when it’s your payment that’s on the wrong side of the deadline, of course. But is it a bluff? Selling airline miles to partners creates a $5 billion a year profit flow for that industry — and like Ulzeheimer says, everyone misses a payment now and then. Taking away their points could eventually wash back to hurt the travel companies themselves.

It certainly isn’t taking anything off the table for American Express, unless card members decide to throw in their plastic and move to a different dealer.

Photography: pheezy (Flickr.com)

In the wake of falling prices and fewer fliers, airlines seem hellbent on irritating their customers as a fiscal strategy.

Apparently, the outcry against adding fees to flights on specific high-traffic days during the holidays wasn’t loud enough, because Delta, American and United announced yet more such because-we-can fees in 2010. Delta and United have carved out no less than 41 flying dates between January and May to slap an extra $30 onto the ticket as punishment for going on Spring Break when everyone else does. All three airlines announced $50 surcharges for select flights on February 8. Odd day? Not to those flying home from the Super Bowl in Miami.

Guess getting reamed $12 for a hot dog at Dolphin Stadium isn’t enough insult to loyal sports fans.

“This is becoming kind of a grab” for passengers’ cash, Robert W. Mann, president of consultant R.W. Mann & Co., told Bloomberg. “Nickel and diming in the form of $5 and $10 bills is really where it’s going.” But is it good business? Ask hotels, which are backing off from charging fees for every little service.

And it’s not as if they don’t have other revenue streams to explore. For starters, prices are steadying now, according to FareCompare. Similar travel-management companies are also predicting airfares will continue to rise in 2010, putting an end to the free fall drop in revenue.

American Airlines will dip its toe into retail sales on U.S. to London flights, peddling Heathrow Express train tickets. Its new inflight wi-fi service will promote online buying from SkyMall. After all, if you have the credit card reader on the back of the seat, they will buy. “We wouldn’t invest if we didn’t feel comfortable it would provide a fair rate of return,”  John Tiliacos, American Airlines’ managing director of onboard products, told a reporter from The New York Times. Reportedly, Broadway theaters and the Walt Disney Company want to elbow in on the action to sell their tickets on planes.

This direction fits right in with the snacks for sale, luggage charges and headset fees.

Then there are the behind-the-scenes moves, such as American Airlines and ARC’s partnership to develop an electronic tool that i.d.s duplicate bookings. The airline estimates these errors cost it “huge sums of money,” and considering the sums that pass through these companies in the first place, that figure must be large indeed to rate that kind of label from executives.

Yes, the recession is a bitch. Yes, the airlines weren’t in the black anyhow when the economy tanked. But at some point in your scramble to survive, you have to protect your future. At least these alternative ways of raising cash allow the customer a chance to decline and provide an extra service for their money. Tacking on fees for the heck of it is just tacky.

Photography: Mr. Usagi, jonathanb1989, psyberartist (Flickr.com)

I like it when a business doesn’t define itself too narrowly. So it’s a round of applause this morning for Starwood Hotels and Resorts and Marriott International as they get into the teleconferencing game.

Yes, you read that right. Hotels, which traditionally have made their money by luring executives to meet face to face in their conference rooms, and thus stay overnight in their rooms, are now saying it’s OK to stay home. Instead, the profit stream comes from renting a high-tech telepresence room to talk to colleagues around the world.

Telepresence: face-to-face while miles apart

Executives get a break twice: first in the obvious travel costs and second by sidestepping the need to purchase the telepresence equipment themselves. According to reports, it costs roughly $500 an hour to rent a technology room at these hotel chains, which is a far cry richer than the $259 per night with less labor. Of course, they’re missing the chance to grab an extra $12 for Internet connection and $30 on parking.

Starwood and Marriott are eyeing a shot at events like job interviews, legal depositions and smaller meetings. Starwood has targeted its properties in New York, Sydney (Australia), Toronto, Los Angeles and Chicago for the telepresence capabilities; Marriott, too, will launch the service in New York with 24 more to follow in San Francisco, Washington, Hong Kong, Shanghai, Frankfurt and London. They are both working with Cisco on the sophisticated conference rooms.

“As the 24/7 world economy becomes more interconnected, the need to hold small global meetings that cross continents and oceans will only grow,” says Arne Sorenson, president and COO, Marriott International. “We believe telepresence will create more business meetings because people can travel shorter distances and easily connect with colleagues and clients around the world. The addition of telepresence meeting suites in our hotels will give Marriott a leg up on its competition.”

Starwoods’ response: “Because of the decentralized nature of business today, without public room deployments, telepresence can never achieve the critical mass needed to realize the full potential of this exciting video technology.”

Meanwhile, according to the New York Times, American Express and Carlson Wagonlit Travel want to jump in by offering consulting services to help business clients decide when to rent a telepresence suite and when to take the old-fashioned “get a room” approach.

I guess thinking outside the box is contagious.

Photography: edans (Flickr)

Oh beautiful for spacious skies

Tracking organizations say the rate of decreases in international tourism is slowing  — or, put another way,  fewer folks are not globetrotting lately, which lends hope these numbers could climb out of the red and into the black in the near future.

According to the United Nations World Tourism Organization’s World Tourism Barometer report, the number of international tourists declined 7 percent in the first 8 months of 2009. But because the bleeding is beginning to taper off to the tune of only 3 percent in the hold during July and August, UNWTO is guessing the final decrease for this year will be 5 percent.

We’re still talking big numbers of course — 600 million visitors worldwide compared to the 643 international visitors countries usually welcome. And it’s understandable, given the poor economic conditions in previously strong countries and a  flu pandemic. It’s just not acceptable to countries that rely on these visitors’ dollars (which shrank 10 percent during those same 8 months, making it an even more dismal story than the head count)  to keep their own employment bases strong.

How hard were countries hit? Stats from the World Tourism Barometer:

In Europe (-8 percent), destinations in Central and Eastern Europe were the most affected, but results for all other subregions were close to the average.
o        Asia and the Pacific (-5 percent) shows the clearest signs of improvement with growth already positive in August driven by the encouraging results of North-East Asia.
o        In the Americas (-7 percent) there are still no clear signs of a reversal in the current decline trend. Growth continued to be fairly negative during the second quarter as well as in the months of July and August. South America has shown the best performance so far (-1 percent).
o        The Middle East (-8 percent), though still well down on the growth levels of previous years, already saw a shift to positive growth between June and September (data for the region is fairly volatile due to the influence of major religious events in tourism flows).
o        Africa’s growth (+4 percent) was very positive given the current difficult environment.

$10 to see

So, since its travel industry seems to be suffering the most on this list, what is the United States government doing to improve the situation? If you ask the European Parliment, that would be pissing off the foreign tourists it needs. EU lawmakers are requesting that Secretary of Homeland Security Janet Napolitano  lead the charge against a likely $10 visa waiver registration fee passed by Congress but not yet signed into law by President Obama. Oh, they’re upset with the online visa waiver, too, but slapping a $10 charge to the process has apparently rubbed salt in the wound.

According to MSNBC, Napolitano is willing to discuss this airline passenger paperwork thing, but, uh … we need that $10. “Unlike many of your countries, the United States does not have a separate agency to promote tourism and travel, and so the goal of this is to use that to actually fund and help tourists and travelers who wish to come to the United States,” Napolitano reportedly responded. “In that respect I think that it is not only reasonable but in these days of reduced government budgets, it’s the way to fund that.”

MSNBC says that EU lawmakers are angry because we American’s don’t have to pay these fees and jump through these hoops on their end. No, we just have to justify a  dollar sinking against the Euro with our personal budgets.

How sure is UNWTO that these numbers will improve?

Photography: Julie Sturgeon

Now that's a strike!

As far as strikes go, this one may be the most polite concept in history.

Flight attendants at American Airlines are planning a “nondisruptive, simulated strike” at undisclosed cities across the country on November 18. The idea is to keep working, but attach disks to their union pins that read “Got Guts” and “Got Union” to call attention to their negotiations to recover wages they lost in concessions back in 2003.

Any real strike — defined as employees walking off the job, we assume — wouldn’t happen before March 2010 as talks and cooling-off periods take place.

“This is only a symbolic demonstration to show management that flight attendants are willing and able to do whatever is necessary to get a fair contract,”  Laura Glading, president of the Association of Professional Flight Attendants, told the press. The point of these simulations? “”We think it’s going to very helpful for us. If we have a job action, it’s good to have a drill, a dress rehearsal.”

Color me confused, but how does wearing a pin prepare you to not show up for work next quarter? Nor do I grasp how flooding the counters and airline aisles with 18,000 union support pins will strike fear into the hearts of negotiators. They are well aware of how many folks are represented at American Airlines — and it’s doubtful they’re the ones strolling around the airports on November 16. Since it’s the week before Thanksgiving, when families start searching en mass for a place to stuff their luggage  in the overhead bins, the flight attendants are likely reaching an audience of Wednesday morning business travelers who rarely pay attention to anything beyond their iPhone screens. And a good portion of them aren’t necessarily sympathetic to union causes in principle.

Another common strike

Your comments and insight are definitely appreciated here, because in terms of strikes, this is an action the public could appreciate far more than hearing their flight was just canceled at the gate.

Photography: Betsy Schiffman, Jule Berlin

Richard Fain, chairman and CEO, Royal Caribbean Cruises Ltd. officially takes ownership of Oasis of the Seas .

The hype has been enormous — seminars touting the retractable roofs, interior balconies, ziplining, aqua theater, an elevator bar and a promenade that features real grass the employees have to mow. Heck, they’ve even signed Rihanna to provide entertainment in December. But despite the webinars, CLIA classes, brochures and emails telling the travel industry between the lines that Royal Caribbean’s Oasis of the Seas will invigorate profits, it’s now looking like … well, hype.

Even the world’s largest ship can’t overcome the plummet in discretionary income to persuade folks to book sooner than a few weeks out in this fourth quarter. Travel agents are telling Cruise Week that at the end of October, there’s still plenty of vacancy on Oasis for Christmas and New Years sailings, even though the $1.5 billion vessel is the most talked about new cruise ship to come along in years, the publication points out. This includes everything from the inside Category Q spaces to balcony categories, although the suites at the top of the pricing chain are sold out.

It’s the same story for the first quarter of 2010, too: suites sell, while agents paddle to get vacationers to commit to the rest of the ship. That 40 percent additional space to entertain as many as 6,360 passengers per sailing may turn into 40 percent more booking headaches as the recession continues.

And since Oasis also carries another accolade — world’s most expensive cruise ship — slow bookings can’t be too welcome within the accounting department at Royal Caribbean, particularly with sister ship Allure of the Seas hot on its heels in the shipyards.  Oasis is scheduled from December 2009 to April 2010 to offer 7-night trips from Ft. Lauderdale to St. Thomas, St. Maarten and the Bahamas. Beginning in May, the itinerary changes to Haiti, Jamaica and Mexico out of Port Everglades, one of the few large enough at the moment to allow Oasis to dock.

“It’s in the DNA of our company, about every 10 years, to take more or less a fresh sheet of paper and create the greatest cruise ship in the world,” CEO Adam Goldstein has said. He’d better hope he also reinvents American travel habits in the next 12 days as well.

Photography: Royal Caribbean Cruises Ltd.